Hospital PFI case ‘a marker' for disputes

13 February 2017 Decision in favour of investor in Peterborough hospital PFI ‘will make authorities more cautious’; investors now pushing programme of redress across operational portfolio

Industry experts have said the decision in favour of investors in the case between Peterborough and Stamford Hospitals NHS Foundation Trust and its PFI partners “puts a marker down” for other PFI arrangements.

The Peterborough case had seen the trust making and/or claiming unavailability deductions for the period 17 November 2014 to 30 June 2015, as a result of issues relating to whether the buildings met fire standards.

However, the adjudication process completed in December and concluded that the unavailability events did not occur, meaning that private partner Multiplex could recover the deductions made by the trust.

“It has helped the public sector to realise that it can’t act without any redress for its actions,” said one investor, responding to the decision. “It puts a marker down; it is helpful to have caselaw out there.”

Jim Crossman at technical consultancy Currie & Brown, agreed. “Trusts are going to be a little bit more cautious about raising disproportionate claims based on non-availability,” he said.

Both suggested that much of the work to remedy such issues today is being undertaken by investors.

“We are increasingly seeing technical competency leading the investor team and taking a far more proactive role pushing SPV managers, who in turn are pushing the operations/FM contractors,” explained Crossman. “A strong investor technical participation is adding considerable value to some projects.”

This page was last updated on:
24 January 2018.

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