Magazine article Public Finance

MoD Plans to Cut Indicators for PFI Contracts

Magazine article Public Finance

MoD Plans to Cut Indicators for PFI Contracts

Article excerpt

The Ministry of Defence plans to reduce the number of performance indicators that determine payments made to Private Finance Initiative contractors, Public Finance has learnt.

Members of the MoDs private finance unit (PFU), set up this year to improve the department's use of PFI, said the development was a 'natural consequence' of the maturing defence market and would help to untangle complex arrangements that have hindered appropriate contractor payments.

Rajesh Haria, a PFU official, told PF that a continued reduction of key performance indicators, on projects where such a reduction is appropriate and manageable, in particular where it would help to clarify payment mechanisms,' was under way across the MoD.

But the PFU stressed that reducing such indicators would not make it easier for PFI firms to achieve contract conditions.

A report on MoD PFIs, published by the PFU on December 12, calls for improvements to contractor payment mechanisms. …

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