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Articles PFI handback 25th Nov 2020

PFI Handback: Protecting your investment

Start planning early to mitigate cost implications

Over the coming years the implications of the expiry of PFI contracts will become an area of increasing focus.  A number of early PFI projects have already expired and as this decade advances, there will be in a surge in the number of schemes being handed back to the public sector.

The recent NAO report indicated that many authorities started preparation for handback of PFI assets at 8 years or more before the expiry date.    The attached timeline illustrates that planning at least 8 years in advance of expiry should give enough time to plan and prepare properly for handback, including time to allow for potential extensions, soft market testing and early joint surveys if appropriate.

These are unchartered waters and present a number of challenges for both the public and private sector.  However, it is apparent that procuring authorities, equity investors and FM contractors should start planning at the earliest opportunity to navigate their way through the process, to mitigate risk and, most importantly, to minimise the risk of disputes. Our PFI handback timeline which you can find here provides an overview of the tasks that need to be undertaken.

How can we help you?

Early preparation will be key in ensuring successful handback.  Working with you and your advisers, we can help you achieve that by:

  • Identifying your options and obligations on expiry
  • Advising on the procurement law implications of any rights to extend
  • Mapping out the handback process and key milestones
  • Detailing any relevant controls under the senior finance documents and how these interface with the process under the project documents
  • Establishing the assets which are subject to handback and the required handback condition
  • Unravelling the impact of variations on handback obligations
  • Developing a handback plan for the management of the process
  • Proactively managing disputes
  • Advising the public sector on its options for the continued management of the facilities, including any reprocurement of services
  • Ensuring that any HR issues are addressed, such as pension issues.

National expertise, local to you

Our dedicated PFI handback team brings together expert lawyers who have achieved national recognition across the key skill sets required to manage handback:

  • Construction/FM disputes
  • Dilapidations claims
  • Employment and pensions

We recognise PFI handback is one of the key milestones in the lifetime of a PFI project and, ultimately, a fundamental test of its success and value for money.

This requires careful management to reduce your potential exposure. We adopt a proactive and collaborative approach, working with you and your other advisers to control the handback process and to reduce the risk of claims.

With 13 offices across the country, one of our experts will always be close to you.

Contact us for a free consultation around your project, to see how we can help.

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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