PFI is a people-oriented business. PFI experts have entered the sector from a range of industries, knowing that these would be long-term, stable positions which would allow them to work with thousands of different people from different backgrounds, both professionally and personally.
As ex-director at Apleona, Brian Jenkinson, notes: “A huge amount of the role in PFI is people-oriented. It’s massively about relationships. It’s an utterly different world to be managing something where you’re locked together for 25 or 30 years.”
This was always one of the tensions with PFI. Contracts would likely outlast the people creating them, leaving handback transitions to be managed by people who wouldn’t have the full context for the set-up of the project. But this longevity has also created a profession that people can work their full career in and even post handback, careers will certainly continue in a different form for the foreseeable future.
Due to public interest, the contracts require intense cooperation between several bodies, with differing ideas on how to achieve a positive outcome on the expiry of a project. This requires input from people with strong interpersonal skills. Teams must manage the technical aspects, and continually address the people management aspect, in terms of engaging with the different stakeholders on projects.
As several PFI contracts enter into the expiry and transition phase, there have been concerns raised within the industry about more aggressive tactics being employed in order to make short-term cost savings, thus creating an environment in which the partnership element is forgotten.
At the end of the day, contract management is about people management. Each contract needs someone from one of the counterparties to lead on it, get people around the table and drive the decision-making at the start of the handback process.
“Agreeing the strategy is important. It’s worth investing the time upfront to bring everyone together and set up that dialogue,” suggests Patrick Hamill, commercial director at Vercity. “Agree the principles, come to an understanding on the key outcomes and the big picture, and then there’s less room for disagreement or dispute when it’s being put into action.”
The problem of course, is that there tend to be a lot of stakeholders on these projects, beyond the authority, the SPV and the FM service provider. Communication is vital, so having one person or team who can liaise between all the relevant parties and keep them updated on both the larger changes and minutiae - as well as facilitating conversations and keeping track of queries - will be critical to the project running smoothly. Parties should also be advocating for full transparency between them.
“It should be a cross party discussion involving all parties,” asserts Jenkinson. “Be as open as possible. I don’t see any reason not to be. At the end of the day it’s a public project that is going to end up in the public, and for me you engage all parties to keep them involved in what’s going on.”
For SPVs coming onto an existing contract, he advises building rapport quickly with the existing stakeholders and counterparties. The existing parties on the contract should be trusted partners, able to assist in providing context on the PFI and sound advice on what you should be doing, as they are already in the procurement and delivery frame.
Communication is key on a PFI. Efficient, accurate reporting of what is going on and ensuring that information reaches the relevant key stakeholders, alongside a programme of meetings to ensure consensus on the direction and end point of delivery, is crucial.
Despite there being few practical examples of what successful handback looks like in the industry, more will come to light over the next 12-18 months and it is likely that the handback transitions we will look to as exemplars will be those that have ended without dispute due to strong, positive, communicative and people-centric relationships.