Expiry date - The key considerations for managing transition

It could be easy to underestimate the time required to prepare for and deliver an orderly exit on terms that work for the recipients of the services i.e the students, patients doctors teachers and other key workers as well as PFI providers and contracting authorities. Our experience and track record inform us that preparation should start five to seven years from hand over date.

The process needs the mindset of a new project with proper planning, programme and deliverables. It requires a commercially and operationally intelligent and well prepared contracting authority to work with an equally prepared PFI provider through a complex process. Structuring the process, devising a programme of work, securing the right personnel and determining how to work jointly takes time.

One of the most time consuming aspects that should not be left to the last minute are around asset condition and compliance. Some PFI contracts envisage a surveying process to determine whether rectification works are required pre-expiry to address asset condition. In some this process is meant to start two years out.

In our experience this should start earlier given the time it takes to determine and agree the scope of the surveys agree the methodology to be used, conduct the surveys, analyse the outputs, agree the outputs and solutions and rectifications allowing time to negotiate a settlement. Similarly it can take a long time to agree what constitutes asset compliance. There are often differences between what is required under the project agreement, industry best practice and potentially even with the statute.

This can be a lengthy process but one that is essential to a successful handback.

Carry on reading this article here.