Project management and the private finance initiative

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Office of Government Commerce (OGC) An independent Office of HM Treasury, formed in 1999, that reports to the Chief Secretary of the Treasury. Its principal concern is improving the efficiency of central civil government procurement, including PFI. Official Journal of the European Union (OJEU) The publication in which PFI projects are advertised, previously known as the Office Journal of the European Communities (OJEC). Projects are also displayed on TED (Tenders Electronic Daily – http://ted.publications.eu.int). Outline business cases (OBC) A business case prepared by the awarding authority that details the need and scope of the project. If accepted this will lead into the tendering process. Output specification The specification on which tenders are invited to bid. It sets out the awarding authority’s requirements in non-prescriptive terms, leaving the tenderers to determine how to meet those requirements. Partnerships UK Organisation formed from the Projects Group of the Treasury Taskforce in 1999 that works with government to develop PPP policy and acts as an evaluator of PPP schemes. Private Finance Initiative (PFI) The financing of long-term infrastructure and public services based upon a non-recourse or limited recourse financial structure where project debt and equity used to finance the project are paid back from the cashflow generated by the project (IPFA definition). ProCure21 An NHS programme, launched in July 2000, to improve the performance of public sector clients in capital procurement. Emerged after the Egan Report, ‘Rethinking Construction’. Project company The company set up by the preferred tenderer to be the contracting vehicle for a project. Public Private Partnership (PPP) A generic term for projects involving public and private sectors. PFI is one type of PPP. Public Sector Comparator (PSC) A benchmark used during the procurement process by the awarding authority to assess the value for money of tenders received. Ryrie Rules Rules established in 1981 that prescribed the limits of private sector involvement in the financing of government projects. The rules were withdrawn in 1989. Special purpose vehicle (SPV) The project company established by the sponsors whose only purpose is to deliver the project. Sub-contractor A contractor that undertakes part or parts of a contract that is the overall responsibility of the main contractor. Tenderers Those organisations (consortia) tendering for PFI contract. Tenderers are also referred to a ‘bidders’. Treasury Taskforce A unit of HM Treasury that was established following the Bates Review to co-ordinate PFI policy across government. In 1999 its functions were spilt between the Office for Government Commerce and Partnerships UK. Unitary payment The payment made by the awarding authority to the project company for the provision of the facility and related services. 37 chapter seven Appendices Project management and the private finance initiative
Appendix B: Useful websites • 4Ps (www.4ps.co.uk) Body providing PFI guidance and advice to local government. • Movement for innovation (www.m4i.org.uk) Body formed following the 1998 Egan report Rethinking Construction. Includes case histories from PFI projects. • National Audit Office (NAO) (www.nao.gov.uk) The NAO has been undertaking analysis of many major PFI projects. Their website includes a PFI guidance database with links to all NAO and House of Commons Select Committee reports on PFI. • Office of Government Commerce (OGC) (www.pfi.ogc.gov.uk) Government agency that overseas PFI. • Operis (www.operis.com/pfi.htm) Provides specialist PFI Financial Advice & tender information from the Official Journal of the European Union (OJEU). • Partnerships UK (www.partnershipsuk.org.uk) Body formed by the government to drive the implementation of PFI within the public sector. • PFI Units in Central Government Below are links to PFI/PPP pages for key government departments. • Department for Education and Skills www.dfes.gov.uk/ppppfi • Department for Transport www.dft.gov.uk/about • Department of Health www.doh.gov.uk/pfi • Ministry of Defence www.mod.uk/business/ppp • PPP Forum (www.pppforum.com) Good gateway site into PFI related information. Includes details of completed projects. • Scottish Executive Financial Partnerships Unit (www.scotland.gov.uk/pfi) Information on PFI projects in Scotland, including detailed factsheets on major projects. • Tenders Electronic Daily (TED) (ted.publications.eu.int) Online database of tender notices that appear in the Official Journal of the European Union. • Welsh Assembly Government (www.pfu.wales.gov.uk) Details about PFI schemes that have taken place in Wales. Project management and the private finance initiative chapter seven Appendices 38
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