What is Private Finance Initiative (PFI)?
In a nutshell it is a way of funding public infrastructure projects with private investment. For us it means that a private sector consortium (group of companies) would put up the money for the new hospital. They would design it using our carefully drawn up specification and then build and maintain it. Once the building was completed, we would make a monthly payment, like a mortgage, to the private sector consortium. After 30 years we would own the hospital building outright. During the 30 years when we make monthly payments, the maintenance and repair of the building is entirely the responsibility of the PFI consortium. This means that we do not have to pay for anything for routine repairs or maintenance for 30 years. Once the 30 years is up the private finance consortia has to hand the building back to us in a good condition, as specified jn the contract. Therefore, it is like a mortgage in which the bank also does repairs and maintenance.
