Akintoye, A; Beck, M; Hardcastle, C; Chinyio, E A and Asenova, D (2001) The financial structure of private finance initiative projects. In: Akintoye, A (ed.) Proceedings of 17th Annual ARCOM Conference, 5-7 September 2001, Salford, UK.
Abstract
Over the past years PFI has become a key approach to public -private partnership in the UK. Unlike other forms of co-operation between the public and the private sector, PFI involves the investment of private capital in projects, which provide services to the public. This paper focuses on the financial structure of the PFI schemes and explores the financing options available to PFI participants. Based on 48 elite interviews with senior representatives from leading UK international companies, we identify the currently predominant form of finance through senior and subordinated debt, which we contrast with the use of bond finance and some rarely used financing methods like lease finance and Mezzanine finance. We note that the convergence of PFI financial practices allows for the use of financial models, which lend themselves to standardization. Our paper concludes with the proposition that a greater standardization of the planning practices associated with PFI, could help counter criticisms of PFI which view this type of procurement as inefficient and costly.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | equity; financial institution; private finance initiative; project finance; special purpose vehicle |
| Index terms: | special purpose vehicle, lease, standardization, private finance initiative, private sector, partnership, financing, project finance, interview, option |
| Subjects: | data collection methods, economic analysis, financial management, partnership management, industry analysis, financial and cost management, land economics, decision analysis, performance measurement, contractual arrangements |
| Topics: | Business Strategy, Procurement, Research Practice, Risk Management, Quality Management, Cost Management, Urban Studies, Stakeholder Management |
| Descriptive scope: | 3 PCE |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here