Talk:Private finance initiative

message: All - after consideration, we believe that we need to do a bit of a revisit of this article. PFI is a definite curate's egg, and I think that we can all go round in circles.
May I therefore suggest the following (and I apologise up front for the acronyms):
:rohita (talk) 12:08, 9 May 2011 (UTC)
replies: text: rohita (talk) 11:11, 9 May 2011 (UTC)

text: rohita (talk) 11:11, 9 May 2011 (UTC)

text: rohita (talk) 11:11, 9 May 2011 (UTC)

text: rohita (talk) 11:11, 9 May 2011 (UTC)

text: rohita (talk) 11:11, 9 May 2011 (UTC)

text: rohita (talk) 11:11, 9 May 2011 (UTC)
thread_title: Overview

message: Does anyone know why there is such a focus on Hospitals in this article? Many of the “cons” are exampled from the healthcare sector. Is this representative (i.e. are hospital PFIs relatively “worse” than others)? If so, is this an issue that should be mentioned in the article?
:Please feel free to add material from other sectors rohita (talk) 15:32, 23 June 2009 (UTC)
replies: text: I think Professor James' remarks are relevant. His statement is that both hospitals were "preoccupied with finance and both were trying to reconfigure services and build a private finance initiative (PFI) hospital.". The contention therefore is that the inevitably complex process of building a hospital is made even more complicated by PFI. Lack of infection control causes death, and The Healthcare Commission said that focus on complex finance had been "at the price" of infection control. rohita (talk) 15:32, 23 June 2009 (UTC)
thread_title: Top

message: At the end of the contract - either full-term or prematurely due to poor performance - who owns the land?  For instance, if the PFI is for a hospital and the contract runs for say 30 years, in the 31st year is there still a hospital or can the PFI company pull it down and build apartment blocks instead?  I seem to recall that Private Eye questioned if the government got value for money when selling the land which would suggest that the PFI company has the freehold. (12:08, 21 April 2006)
Government owns the land throughout the contract -- and it really owns the facility too. The private counterparty's postion is more like a lease.
There are really two other questions you are asking, one regarding handback and the other termination.  This distinction exists because under most PFI the private sector is making an investment to build or renovate a facility.  That investment is comprised of debt and equity.  If the private sector manages the facility properly then it should earn revenue (such as a real toll or an availability payment from the government) which it can use to repay debt and provide an equity return.  The key point here is that it is the private sector that invests in building the facility, not the government.  So if the contract is terminated prematurely and the government takes control of the facility, some compensation must be given to the private.  The termination settlement terms are set forth in the contract and typically provide different formulas depending on who/what causes the early termination which may or may not allow the investors to recoup equity with an expected return. 
Handback is different.  That occurs at the intended end of the contract term, by which time the investors will have been able to earn their return, provided they delivered good service and built a quality facility with few capital or operating overruns (in a PFI the risk of overruns is held by the investors).  Typically handback provisions are set forth in the contract.  They usually establish a certain condition in which the facility must be turned over -- usually in very good working/renovated condition.  There typically is an inspection regime which begins 3-5 years before handback.  If the facility is not as it should be, then portions of the year 3-5 payments are escrowed to be used only for rennovations to comply wih the handback requirements. 
PFI or Private Finance Initiative is a UK version of what is generally termed a public private partnership.  The contract provisions for PFIs have been standardized with some provisions for flexibility depending on the actual nature of the given project.  You can read the standardized terms here: http://www.hm-treasury.gov.uk/documents/public_private_partnerships/key_documents/standardised_contracts/ppp_keydocsstand_index.cfm
(69.141.195.247 09:08, 19 January 2007 (UTC)
thread_title:  Contract Termination 

message: The financial section of this article is opaque, has typos, and is out of date (it asserts that bonds are cheaper than bank debt, but that is not currently necessarily the case).  I know that the Wikipedia culture is to contribute rewrites in such circumstances, but in the absence of time immediately to hand to do that, I provide this note as a warning not to rely on what is written there.  
As for the idea that PFI should be merged with PPP, the first is a kind of the second, but the two are not identical.  David Colver 19:30, 7 March 2007 (UTC)
thread_title:  Financial 

message: I tried to eliminate what seemed to be the most flagrant example of weasel words, replacing "some critics claimed... back-door privatisation" with a firm, verifiable example.
As such, should the (very visible)Weasel Words header still deserve to be there?
78.115.140.232 (talk) 11:41, 22 May 2008 (UTC)
thread_title:  Weasel Words? 

message: I have reorganised the sections in order to improve clarity and readability. I have tried to separate 'neutral' sections which are largely descriptive in nature from POV sections, which I have now grouped under Support for and Criticism of PFI sections. 'Examples' is intended to be a neutral section under which PFI projects can be listed. Comment on pros and cons can then be made in the appropriate section rohita (talk) 09:12, 25 October 2008 (UTC)
thread_title: Restructuring Sections

message: Some explanation here of what the specific problems are that motivated its addition would be helpful. Thanks. Rd232 talk 19:12, 3 March 2009 (UTC)
replies: text: Re. NPOV - the remark in the History section "the government is in the "ludicrous" position of having to fund the so-called 'private' finance initiative itself!" is unnecessarily anti-PFI (even without the exclamation mark), particularly as the argument is given word for word in the following quotes. Luckyaxolotl (talk) 10:27, 18 August 2009 (UTC)
replies: text:  criticism noted. "ludicrous" removed. Are you willing to remove NPOV objection?rohita (talk) 20:45, 19 August 2009 (UTC)
replies: text:  I didn't make the NPOV objection, I just noticed that one example and thought I'd throw my two cents in. Luckyaxolotl (talk) 16:30, 24 August 2009 (UTC)

text: sorry, the removal of NPOV tag was incorrectly marked as a minor edit - my apologies rohita (talk) 08:18, 30 August 2009 (UTC)
thread_title: NPOV tag March 2009

message: I have reverted Millstream3's recent edit, which I don't think should have been classified as minor. I don't disagree with the use of lower case in the headings, or the deletion of the word PFI from the headings, but I didn't like the re-ordering of the article text. I think it is useful to have the History section at the beginning of the article, as it provides a simple entry-point for the reader. I certainly don't find it useful to have the section 'PFI combines borrowing and operating costs' at the beginning, as like many of the later sections of the article, it is technical. rohita (talk) 17:13, 7 March 2009 (UTC)
replies: text: With regards to the lower case headings, this is as per the manual of style.  With regards to structure, you shouldn't have an explanation of what PFI actually is buried at the bottom.  Typically, history is less important than a description of what something is.  The article needs a quite a severed editing as it is too long (unencyclopaedic) and technical; and these two points would be a good start.  Re minor vs major, I don't think improving the structure without affecting the content is major. Grateful if you'd explain what your objection is. It's quite poor courtesy to revert good faith changes without any sort of explanation. Millstream3 (talk) 17:46, 7 March 2009 (UTC)
thread_title: Article structure

message: I just skimmed through the entire article looking to find out what PFI actually is and how it works, and it doesn't seem like this info exists in the article. I believe that above all else, the article should clearly outline how PFI works and how it's different from other systems like BOT (should they be compared?). Many thanks to anyone who has knowledge on the subject and is willing to fulfill my request. -- Ynhockey (Talk) 00:26, 17 March 2009 (UTC)
replies: text: IMO PFI = BOT + dodgy accounting ... would need some decent sources to put that in the article though! So yes, more of the sort of detail you mention would be good. Rd232 talk 01:29, 17 March 2009 (UTC)
thread_title:  What is PFI? 

message: 'In May 2010, George Osborne announced that the role of the new, "supposedly independent"' - I don't see how the "supposedly independent" quip provides anything toward the article except make it bias in one direction. You could, if you wanted to, find many other quotes that fall on the other side of the fence. Unless I see any good reason for it stay, I reckon it should go. Kavanagh21 (talk) 00:30, 3 November 2010 (UTC)
thread_title:  Opinionated? 

message: The most recent Treasury select committee hearing into the viability of PFI has not been as supportive of it's value for money as the government (and previous governments) may have hoped particularly in areas of value for money.
http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/1146.pdf
http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/1146vw.pdf
There's a fair bit of text and I have not the time nor balls to summarise in a nice wiki friendly paragraph.--Lead holder (talk) 14:14, 3 September 2011 (UTC)
replies: text: Current issue of Private Eye (1296) also has mention of this report.--Lead holder (talk) 17:14, 3 September 2011 (UTC)
thread_title:  Treasury committee report into PFI funding. 

message: Should a reference be made to PFI based road schemes, together with a link to the Shadow tolls article which covers the subject in more detail? PeterEastern (talk) 21:09, 8 April 2012 (UTC)
thread_title:  Shadow tolls 

message: The economist article referred to in the lead actually says "The data to back up the value-for-money claim are sparse. A 2003 survey from the National Audit Office concluded that, broadly speaking, PFI contracts did offer good value for money". Hardly glowing praise.
And... do we know which report they are referring to? The PFI related Audit Office report I found from 2003 'PFI: Construction Performance' states "We did not set out to examine the value for money of the deals. This has been covered by many of our previous PFI reports. Nor did we try to judge how well the construction element would have been performed had the contracts been let using other procurement methods. The positive results of our census do, however, generally compare favourably with the results of other studies which have considered the historical experience of other public sector construction projects.".
I notice that a 2011 report by the National Audit Office seems to imply that there had not been a good 'value for money' review done previously. It states: "There has not been a systematic value for money evaluation of operational PFI projects by departments. There is, therefore, insufficient data to demonstrate whether the use of private finance has led to better or worse value for money than other forms of procurement. The NAO calls on the Treasury and departments to identify alternative methods for delivering infrastructure and related facilities services, building on the lessons learnt from PFI, to maximise value for money for government."
A Treasury Select Committee did also report in 2011 saying: "Private Finance Initiative (PFI) funding for new infrastructure, such as schools and hospitals, does not provide taxpayers with good value for money and stricter criteria should be introduced to govern its use"
Also.. In 2010 the National Audit office concluded that "The Highways Agency’s PFI contract to widen the M25 could have been better value for money. The slowness with which it was taken forward resulted in higher financing costs, and the Agency was slow to investigate a potentially cheaper alternative to widening."
As such, should the 'value for money' quote in the lead could be reconsidered?
--PeterEastern (talk) 21:39, 8 April 2012 (UTC)
thread_title:  Value for money 

message: I am sure the writer knew when he/she wrote "A recent example where this has taken place is the Manchester Waste PFI.", but I don't. I feel sure we should avoid such expressions as 'recent' as they quickly age and become indeterminate.  — Preceding unsigned comment added by Dawright12 (talk • contribs) 15:30, 17 July 2012 (UTC)
thread_title: Method of Payment

message: I'm going to tag this with a NPOV warning. The first statement in the article -- that PFIs are driven "by an increased need for accountability and efficiency for public spending" is supported by citing an article that says no such thing. In 2003 the NAO found that PFI provided good value for money -- as the article states. However, the NAO in 2011 was much more critical, finding that the use of PFI "has the effect of increasing the cost of finance for public investments relative to what would be available to the government if it borrowed on its own account.", and "The price of finance is significantly higher with a PFI." (All at http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114608.htm). These strongly supportive statements are inappropriate in the introductory paragraph of a wikipedia article where such controversy exists. The Impact section starts with the phrasing "PFI deals are very much more likely to be delivered on time and on budget" and "Many PFI projects have delivered clear benefits.". Yet this isn't true: the language misleads the statistics. A 2009 report by the National Audit Office (NAO) found that 69 per cent of PFI construction projects between 2003 and 2008 were delivered on time and 65 per cent were delivered at the contracted price. (http://www.nao.org.uk/publications/0809/private_finance_projects.aspx). Words such as "Very much more likely" do not, to me, correlate with such a low level of improvement; were these conclusions submitted as part of a peer-reviewed paper I was editing, I'd throw them out of hand as over-optimistic. 
Additionally, the whole article seems to be written in the following structure: the (presumably original) positive PFI report, followed by counterexamples that directly contradict what we've been told as being generally true. It is schizoid: the original, widely-pro PFI statements are followed immediately by subsequent writers trying to impose balance. This isn't the way objective reporting is supposed to work: the article should be structured with a dispassionate overview of the idea, followed by clear arguments for and against the concept, with the reader left to draw their own conclusions from neutral evidence that should then follow. There are many examples of PFI deals in Britain -- both successful and otherwise. A comprehensive analysis of these should then follow, with general conclusions left to the very end. 
163.1.246.64 (talk) 13:57, 25 July 2012 (UTC)
replies: text: There are some good points here. I have followed these suggestions and put the information above from the NAO reports into the article. I have also restructured as suggested so the mechanics come first and the analysis later. Where editors have good suggestions like this it is best to improve the article rather than just tagging it. Dormskirk (talk) 17:51, 30 September 2012 (UTC)
thread_title:  Objectivity 

message: There is no mention at all in the article of the M25 contract. The Campaign for Better Transport was quite outspoken about this project and referred to the award of £5bn M25 PFI contract as showing "appalling judgment" (see article). Given that I have failed "to justify a quote" from this article (see section above) I will leave it to others to see if they can do a better job of it than me. Dormskirk (talk) 21:08, 31 October 2017 (UTC)
thread_title: M25

message: Suddenly in the article there is a section "PF2" which mentions a review of PFI in 2012 and proposed changes. Then it goes on on state the government would no longer use PF2 after 2018. it doesn't make it clear, is PF2 an updated version of PFI, was this used from 2012-2018, is there anything else which differentiates it from PFI? There is no other mention of PF2 in the article. Capturts (talk) 06:05, 20 January 2023 (UTC)
thread_title:  PF2 

message: Is there a purpose to the The Skye Bridge photo in this article? Was it funded in some way by PFI? The article doesn't seem to mention this bridge at any point. Capturts (talk) 07:03, 20 January 2023 (UTC)
thread_title:  The Skye Bridge picture