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PFI/PPP is mainly applied by governments to projects which require regular, on hands maintenance. However, PFI/PPP may not be used for any kind of projects.

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Introduction

Like any concept introduced, it comes with both advantages and disadvantages. PFI/PPP being one of the most controversial issues of today. One of the most common features of PFI/PPP is that costs keeps increasing and therefore not feasible at times to continue with the project and therefore the big question stands as 'should time, effort and money really be invested in PFI/PPP?' PFI/PPP is mainly applied by governments to projects which require regular, on hands maintenance. However, PFI/PPP may not be used for any kind of projects. These projects are large scaled projects and that have a certain degree of complexity. The UK Government has embraced the idea of PFI/PPP for many different reasons. The first most popular reason being PFI/PPP helps to deliver high quality public services and ensure that public assets are delivered on time and to budget. PFI/PPP introduces competition between contractors, its goal here being to establish the market mechanism into the process of providing facilities. Secondly, the private sector is known for lacking efficiency, by bringing forward PFI/PPP, the private sector is able to provide taxpayers value for their money. ...read more.

Middle

As mentioned before, where there are pros, there are cons. Some say that the advantages and disadvantages of PFI/PPP cancel each other out. Others beg to differ. The first argument that shows how complex a PFI/PPP may be to operate is the very famous example of Health Trust. Many find is unwise for the Health Trust to enter itself into such a long-term contract. Changes in individuals demand and unforeseen events that will occur in the future, may result in severe restrictions in resources used and provided if health authorities are tied down to a PFI/PPP contract. The PFI system is globally criticized for the commercial confidentiality that is commanded by the private sector. This makes it difficult to compare publicly financed and privately financed schemes. As mentioned before as a positive point that PFI/PPP motivates individuals and promotes innovation, this is also a complex issue. It is extremely complicated for private sectors to be motivated and spontaneous with ideas as large contracts become complicated and nearly 100% of the time involve a head contractor. ...read more.

Conclusion

It is a common principal that private companies always try to minimise their tax bills and attempt to hide their identity in some way. The problem here is that government departments feel that as they are the ones paying for the project over a number of years, they should be involved in the idea making process behind these plans. The last issue is that of contract complexity. The times set in a contract can be very problematic. Take a famous example of hospitals; if the contract is over a period of 30 years, then the government is forced to pay a yearly amount over that long period. Say 20 years down the line, the hospital needs a refurbishment, then the government is still required to pay for the old hospital for an extra 10 years until it meets the 30 years originally agreed. So for the next 10 years, the government would just be throwing away money. To conclude, the PFI/PPP contract is debated about the fact that such large time gaps should not be put on the contract. Emma Booker DP1 B&M ...read more.

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