Description

PFI is a procurement method where the private sector finances, builds and operates infrastructure and provides long term facilities management through long term concession agreements. It is a sub-set of a broader procurement approach Public Private Partnerships (PPP). A standard feature of PPPs is provision by the private sector of finance for the project. Variable features include financial or shareholder participation by the public sector, short or long term concessions, toll-funded operations and derivative forms of sale and leaseback.   

Benefits
PFI was introduced in an attempt to improve historically adversarial relationships and low levels of trust that existed between the two sectors (public and private). The benefits of PFI include improved project timescale and budget delivery, in addition to giving the private sector the necessary incentives to effectively manage risk.