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.
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