07 May 2004
All Private Finance Initiative projects that have not been closed by May 14 must adhere to new standard contract terms that come into force on that date, the Treasury has said.
The revised Standardisation of PFI Contracts will apply to all deals currently being negotiated, even those that are nearing completion, meaning that those not complying will have to be redrafted.
Any public sector organisation that wishes to deviate from the new SPC, the third version to be published, will have to get the express permission of the Treasury.
This stipulation extends for the first time to government departments, which previously had some flexibility to negotiate non-standard terms.
The Treasury has been concerned at the patchy use of the previous SPC, introduced in 2002, and is determined that public sector organisations and private sector bidders will use its templates.
SPC3 is the result of lengthy consultations with both public and private sectors: it is intended to cut contract negotiation and bidding costs and increase transparency.
Geoffrey Spence, the Treasury's head of PFI policy, said the ministry wanted to ensure 'more rigorous enforcement' of the standardised contract.
PFmay2004
