What is a PFI?
A Private Finance Initiative project is one in which the private sector partner invest in assets and facilities from which it then provides services over the long term to the public sector. In the case of Allenby/Connaught the private sector will provide serviced accommodation and other support services. PFIs are widely used both within the MoD and across the wider public sector. MoD has PFIs for housing, simulators, vehicles, office accommodation and training establishments. Other sectors use PFI for roads, schools, hospitals, rail and office accommodation. A Private Finance Initiative is a mechanism where a contractor borrows money against a future income stream and uses the borrowings to fund the construction phase. The risk of delivering the new facilities and the services over the long term period passes to the contractor.
