"Infrastructure and Projects Authority guidance suggests starting to prepare seven years from the expiry date"

The first thing that the public authority will have to do is to clarify the contractual provisions on handback. The provisions, if they exist, will be set out in schedules to the contract which are very likely to have been neglected since the contract was first agreed.

A clear and simple guidance document will need to be developed. The provisions and processes for handback should be considered carefully alongside a contract variation guide for when things are not clear. For example, does the asset automatically revert to the authority after expiry or are there contractual steps that must be followed?

It is important to recognise the leverage that the authority has in terms of negotiating with the PFI contractor. Authorities will be in a much stronger position when they still have recourse to the lenders. It is important to establish when the debt is likely to be repaid and the processes for contacting lenders directly which, in some cases, may be contractually restricted. This will be important if the authority wants to access lifecycle funds.

The authority should undertake and explore:

► preparation of bespoke contract guidance clarifying the expiry process and contractual rights

► preparation of a detailed timeline of actions up to expiry

► an understanding of lessons learned on similar projects

► activation of contractual rights to undertake asset condition surveys, and recommendations of suitable surveyors

► identification of contractual rights relating to any lifecycle and furniture, fixtures and equipment (FFE) accounts

► tracking and maintenance of account balances

► implementation of the expiry processes

► preparation of a handback protocol and deed of expiry

► preparation for staff transfers and whether TUPE4 applies

► identification of any pensions issues

► consideration of any intellectual property rights

In order to make a success of the preparation period and get ready for decisions around project expiry, the authority should:

► initiate a review of all of the project agreements

► undertake an analysis of all of the lease options associated with the asset

► establish whether there are any extension provisions and whether to include these in options' appraisals

► commission an analysis of the accuracy and sufficiency of operations and maintenance (O&M) manuals

► commission options' appraisals for future service requirements

► establish budgetary consequences for handback, acquisition or residual payments, and costs of maintaining and operating the asset

► undertake detailed condition surveys

► establish asset valuations

► establish a communication and governance channel for negotiation with the contractor

► identify resources with appropriate levels of experience and capability

► generate and maintain a clear project and action plan

► establish a register of risks and manage it

► govern and manage the handback process