A Facilities Manager working in the Public Sector
A Facilities or Contract Manager working for an outsourced FM provider
A Business Development professional working for an outsourced FM provider
Imagine you needed a custom built Aston Martin with rocket boosters, cloaking shield and a child ejector seat. The price would be phenomenal, so you are left with two choices.
To avoid settling for an unsatisfactory compromise (see image), you could pay a monthly fee over a 30 year period to a consortium called AMSHAM.
AMSHAM would design and build the car for you, then provide fuel and servicing for the duration of the 30 year period. PFI and PPP follow a similar principle, only with specialist buildings instead of cars.
An SPV is essentially a consortium of private companies, each with their set of specialisms to bring to the table (Design, Construction, Facilities Management etc).
This is commonly used for schools, hospitals and other large-scale, special-purpose public sector buildings. Depending on the terms of the PFI, the public sector may or may not take ownership of the facility at the end of the contract.
A PPP (Public Private Partnership) is a similar arrangement, although there are differences in terms of the balance of risk between the public sector organisation and the SPV.
Allows the public sector to finance and manage large construction projectsPrevents the need to increase public borrowingSpecialists to carry out each phase (Design, Build, FM etc), rather than generalistsAll benefits of Total FM delivery models are also realised (economies of scale etc)Public sector organisations locked into long-term contracts (25 years or more)Potential conflicts of interest between Public Sector Organisations and Private SPVsProblems can arise when members of the SPV consortium sell their stake in the PFI
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