CISR15180 | The Scheme: payments: payments under a private finance initiative (PFI) arrangement

The Private Finance Initiative (PFI) is a form of Public Private Partnership, aimed at enabling the public and private sectors to work more closely together by making use of private capital and expertise in the provision of public sector infrastructure and services. PFI contracts are often for long periods, typically 20-30 years. Common types of PFI include

• services sold to the public sector – the private sector provides the capital assets and the public purchaser pays only on delivery of the specified services

• financially free-standing projects – the private sector designs, builds, finances and operates an asset, recovering the costs through direct charges on the private users of the asset

• joint ventures – the costs of a project are not met entirely by the charges on end users but are subsidised from public funds.

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