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PFI introduced private sector expertise and finance into the design, building and maintenance of major public-sector infrastructure projects and the operation of some public services.

Under a PFI scheme the private sector assume much of the risk in:

• building and managing property, e.g. a hospital, and/or
• providing support services,

thereby enabling the public sector to concentrate resources on delivering their core activities, e.g. the provision of quality healthcare.

»Ê¹ÚÌåÓýapp public sector ‘purchaserâ€� has to demonstrate that the PFI contract offers value for money to the Exchequer, in effect that there has been a transfer of risk to the private sector ‘operatorâ€�. »Ê¹ÚÌåÓýapp intended result is an improvement in both the quality of public services and the nation’s infrastructure, at an affordable cost.

In a typical PFI transaction an operator contracts to provide services to the purchaser for a period, in return for an annual service payment (the ‘unitary chargeâ€�). »Ê¹ÚÌåÓýapp unitary charge may be linked to performance, availability and usage criteria.

Many PFI projects involve the operator in the design and construction of a PFI property, e.g. a school, road or an information technology system, as well as the provision of ancillary support services, e.g. maintenance of the property, to agreed standards. »Ê¹ÚÌåÓýapp contracts are often for quite lengthy periods, typically 25 - 30 years.