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Risk analysis and management of Private Finance Initiative projects

AKINTOLA AKINTOYE (Department of Building and Surveying, Glasgow Caledonian University, Glasgow G4 0BA, UK)
CRAIG TAYLOR (Department of Building and Surveying, Glasgow Caledonian University, Glasgow G4 0BA, UK)
EAMON FITZGERALD (Department of Building and Surveying, Glasgow Caledonian University, Glasgow G4 0BA, UK)

Engineering, Construction and Architectural Management

ISSN: 0969-9988

Article publication date: 1 January 1998

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1800

Abstract

The Private Finance Initiative (PFI) is a recent development in the UK in which private sector organisations, design, build, finance and operate assets to deliver a service to public sector clients. The initiative is expected to bring the private sector's finance, management skills and expertise into projects which would normally be undertaken by the public sector. Equivalents of this initiative, also found outside the UK, include DBFO (Design Build Finance Operate), BOO (Build Own Operate) and turnkey projects. Two important considerations for a project to receive an approval for the initiative are that it must represent value for money and there must be sufficient transfer of risk to the private sector. This paper, based on a questionnaire survey, provided the perceptions of clients, contractors and financial institutions on risk associated with PFI and how these determine their approach to PFI schemes. The analysis shows that design changes and the level of information on functional, performance and output requirements for PFI schemes are of major concern to the parties involved in this procurement route.

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Citation

AKINTOYE, A., TAYLOR, C. and FITZGERALD, E. (1998), "Risk analysis and management of Private Finance Initiative projects", Engineering, Construction and Architectural Management, Vol. 5 No. 1, pp. 9-21. https://doi.org/10.1108/eb021056

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MCB UP Ltd

Copyright © 1998, MCB UP Limited