The following terms are used in this paper:
Authority : the Scottish health board, local authority, college or other public body that entered into the relevant Project Agreement ;
end of contract : the natural or initial expiry date of the relevant Project Agreement;
Facility : the buildings comprising the hospital, school, college or other facility that were constructed or refurbished under the Project Agreement ;
Handback : the process whereby the Facility will be handed back to the relevant Authority or, where the Authority decides that it no longer requires the Facility, the arrangements for vacation of the Facility and its disposal or other future use;
Lease Structure : a property struture put in place at the same time as the Project Agreement was concluded whereby the Authority as owner of the land on which the Facility is to be built grants a long ground lease to ProjectCo that then grants a shorter sublease to the Authority: at the end of contract, the sub lease automatically ends and the (usually significantly) longer ground lease continues until terminated and any relevant security documents discharged;
Project Agreement : the PFI or PPP contract entered into by the Authority and the ProjectCo at the outset of the project;
ProjectCo : the special purpose company or other private sector entity that entered into the Project Agreement; and
Residual Value : a payment due by an Authority at the end of contract to acquire property rights in the Facility so that it can hold ownership of it unencumbered by any leases or other rights held by ProjectCo.