White Fraiser Report key points

The report is principally concerned with contract management and relationships but noting the increasing trend to disputes, especially in the PFI health sector. The report authors are concerned with the potential spread of disputes from this sector into the wider PFI industry, which it describes as being at a ‘significant inflexion point’.

The report makes a number of recommendations on contract management practices and to reverse a seeming trend towards disputes. One key suggestion is the formation of a PFI disputes Council. The aim is to build up a body of “PFI/PPP common law”, (b) improve the quality of decisions, and (c) reduce disputes. The report’s other key recommendation is the creation of a “PFI reset” environment. This is a voluntary approach but would involve (among other measures):

• Project SPVs and their supply chain being incentivised to identify and declare every issue they know about, in order to benefit from an ‘amnesty’
• Survey commissioned to identify issues - joint appointment & jointly agreed scope, paid for by the private sector
• Period of relief provided – Public Authorities would agree to suspend payment mechanism deductions for the period of a timetabled action plan to allow the Project SPV to schedule and addresses issues
• Timetable to resolve issues, with fast track disputes for issues where the parties disagree and “liaison committees” to monitor the progress of issue resolution

The IPA has yet to approve the report or issue recommendations of its own.

The report is clearly relevant to those active in the PFI sector, but will also be valuable to those involved in the management and implementation of major projects, particularly in the PPP space and likely featuring long term contractual relationships.