FM Industry Standards & Legislation
Commercial & Contracts
Statutory Compliance & H&S
Estates Maintenance (Hard FM)
What does PFI stand for?
In facilities management, PFI stands for Private Finance Initiative. PFI is a method of procuring public sector infrastructure projects such as schools, hospitals, and other facilities, where private sector companies are responsible for designing, building, financing, and operating the facilities over a long-term period (usually 25-30 years).
Under a PFI contract, the private sector company (or consortium) raises the capital to fund the project. It is responsible for managing all aspects of the project, including the construction and ongoing maintenance of the facility. The public sector authority, such as a government department or local authority, makes regular payments to the private sector company over the contract's life to cover the capital costs and operating expenses.
The PFI/PPP contracts include a range of obligations and conditions for the private sector company to fulfil, such as maintaining and repairing the facilities, ensuring compliance with regulations, and delivering specific service levels. The contracts also include payment mechanisms, typically involving regular payments by the public sector authority to the private sector company.
PFI has been a controversial method of financing public infrastructure projects, with critics arguing that it can be more expensive in the long run compared to traditional public procurement methods, such as public sector borrowing.