In hand, in terms of mean value of the

In March 2012 the largest amount of PFI projects was being adopted in
Great Britain by the Department of Education (118). The second place, in
regards to the number of PFI projects, belonged to the Department of Health. On
the other hand, in terms of mean value of the contract, the biggest procurer of
PFI was British Government Communications Headquarters (GCHQ). However, due to
the fact that they only had one project financed in the discussed form, it
should not be considered in this analysis. In this context, the biggest mean
value belongs to projects carried out by the Department of Work and Pensions
(with mean value of the projects being £217 mln). Whilst the smallest projects
were submitted by the Department for Culture, Media and Sport. In Great Britain
in 2012 mean value of PFI financed projects was £86 mln. The biggest amount of
projects, looking at their total value, was adopted by the Department of
Health.

 

Process of a project submission

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What does the process of the contracting for the public project with PFI
financing form looks like in the UK? First step to submit a project for a
discussed financing model is to publicly announce the information about planned
undertaking. This is the moment when the entity that is announcing the project
is sharing the general information about the created investment plan. The
process of a formal submission for the project starts with presenting the tendering
documents in the Official Journal of the European Union. Next step for the
company interested in bidding is to fill in the initial qualification form that
allows the client to establish a short list of potential tenderers. Then the
client sends the official invitation to tendering to the chosen companies. The
invitation is a document which formally specifies client`s requirements,
expected business conditions of the cooperation and criteria for evaluation of
private company`s offer. After receiving documents sent in response to the
offer, the public entity makes an assessment of the received offers paying
special attention to compatibility with criteria specified in previous stages. Next,
the client chooses the most suitable tenderer and announces the winner of
tendering expressing a will to sign a contract with a chosen company. The last
step is to sign a contract which is followed by carrying out of the project.

 

Does PFI system fulfils everyone`s expectations?

In 2012 it was noticed that the most often used form of PPP
in the UK, that is PFI, in many cases turned out to be not enough adjusted to
the needs of the public. The main faults of PFI identified in 2012 by HM
Treasury were:

·        
Too slow and expensive
process of signing the contracts with PFI form for both public and private
sector. This resulted in decrease of value for money possible to achieve (from
the taxpayer point of view) in certain projects,

·        
Not enough flexibility in
carrying out the projects in operational phase, connected with difficulties in
introducing changes in the contract which would allow to adjust the project`s
specifications to meet the current needs of a public sector,

·        
Lack of necessary clarity
in the nature of obligations generated by the PFI contracts from the taxpayers
point of view and the profits gained by the private party,

·        
Tendency to incorrect and
unjustifiable transfer of risks existing in a certain project, under the
agreement, onto a private sector, that results in increase of burdens borne by
the public sector instead of leading to effective implementation of the project
with this cooperation,

·        
Concerns about unjustifiable
scale of profit gained by financial institutions from implementation of the PFI
projects which resulted in doubts about the actual level of value for money in
certain projects.

The cases of the use of Project Finance Initiative in
implementation of projects where that model was not suitable has been noticed
more and more often. For instance, the projects were carried out in which the recognition
of the future needs of the public sector was missed out in the scope of public
services and infrastructure in the contract.