There appears to be a lot of misunderstanding about PFI contracts in this thread.

Generally they are built to a set of design lives which are build into the contracts for example typically structure would be for 60 yrs, often they are required to meet the design lives given in the CIBSE maintenance guide (m&e) elements

Additionally throughout the contract they are required to maintain the buildings to a defined standard

At the end of the contract there are normally a set of handback criteria and would be subject to independent survey to determine that this will be achieved, this will include an apraisal of the remaining asset life and corrective measures that are required to attain it if necessary.

Generally the end of say 25yrs the condition will be in full working order with only minor cosmetic defects

the costs associated to the costs of fixing these schools, providing temporary accommodation etc will fall to the SPC and thence to the construction company and investors. Not to the authority

If this had been traditional procurement then it would fall to the council tax payers of Edinburgh, given the track record of public pricurement in Edinburgh they should be relived that they were procured via PPP

There appears to be a lot of misunderstanding (about PFI contracts) in this thread.

New here, are we?

the costs associated to the costs of fixing these schools, providing temporary accommodation etc will fall to the SPC and thence to the construction company and investors. Not to the authority

that is if the comapny probably formed to build them stays in buissness and doesnt go bust,

Which was it?

I actually thought that one of the benefits of PPP was that any costs required to maintain a building were the responsibility of the contractor and not the Local Authority. There is a ‘cost’ in the schools need to closed, but it is up to the contractor to make good defects.

I apologise now for not going off on some rant based on pure thin air – but this is probably the ONLY benefit of PPP. The contractor took the risk.

The partnership was between Amey, Miller Construction and the Bank of Scotland.

Miller construction built the schools, Amey maintain them and it would have been jointly financed with the bank.

Miller construction was later bought out by Galliford Try and Amey by Ferrovial. Both still going strong, Amey as a subsidy of Ferrovial still provide the FM for the schools (and most the PFI schools in Scotland).

These are multi £billion companies so hopefully they get their fingers out asap.

It seems that when it came to writing PFI contracts, they used the same person who drew up the players contracts at Leeds under Martin O Neill

Scotroutes the terms PFI PPP or P3 are interchangeable

Costs of this should fall on the contractor – risk transfer is a key part of the PFI concept.

I am simply sceptical as to whether the council have a robust enough contract in place to make sure that happens and happens quickly.

I bet there are a fair few hospitals around the UK like this too

bencooper – Member

Yes, so not only are the PFI schools incredibly expensive – far more expensive than just building the things directly – they’re also built on the cheap to maximise company profits.

But remember, that’s entirely the council’s fault, and the company are morally obliged to take advantage of explotable contracts and specs, cut costs to the bone and make as much money as they can for their shareholders.

This is indefensible though IMO, we’re not talking about simple scalping here, we’re talking about building unsafe schools. That’s a different business entirely from just making a bit of extra money or having the roof leaks.

Only an idiot would allow schools to be built and run by private profit making bodies and not expect short cuts profit maximising measure to be standard

All schools are built by the private sector (and hence for profit) as we don’t have any public sector construction companies, the difference is who is the “client” for the builder PFI’s fudge this hence some of the issues

The building warrant system in Scotland should have stopped unsafe designs, who did the inspections?

Well the PFI company is now in the news saying all the right things about taking the financial hit (and possibly penalties/consequential losses too).

So we seem to be in a situation where the missing wall ties could have been left out of publicly funded schools too as the issue was with the private builder (as big_n_daft says, HM govt doesn’t employ any brickies). The PFI contract seems to be doing what it should and shifting the financial risk off the taxpayer and onto the PFI company.

The SNP now want to terminate the contract that is doing its job and put the schools in public ownership (which would have no effect on the construction issue). But who will they get to build new facilities if private companies can’t be trusted? PFI is about financing and operation, not about construction.

Having seen a few of these go up, they basically build and snag a whole school in the summer holidays so it seems entirely possible that a few corners were cut (consciously or not) in order to meet a tight deadline. That there were latent defects as a consequence isn’t really that surprising.

But who will they get to build new facilities if private companies can’t be trusted?

Won’t the final appointment be made by the Local Authority? Nothing wrong with private companies, except those that underprice in order to win the tender and are unable to build to spec, but the Local Authorities already know this. It’s them who have the policy of accepting the lowest bid, and should take their share of the blame.

The local authority building control should have inspected the building at various stages of the project as should the architect if he was employed to do so but it is not possible for them to oversee everything that happens on site. A level of competence should be expected of contractors and they have a duty to employ and manage equally competent subcontractors. In my experience it is increasingly difficult to find people with expert knowledge and skills in the construction industry and that’s without adding the fact that they need to be ‘the right price’ too. We completed a job recently with a contractor whom our public body client ended up thinking were a complete disaster but I have no doubt that they’d employ them again in a heartbeat if they returned the lowest tender. 😥

The race to the bottom on price is driven by the buyer setting the rules that way, they need to base their criteria on quality issues as well.

Blaming the winner of a race when the rules are rules are set in a particular way is nonsensical

There are lots of reasons to not like PFI but this really isn’t one of them.

In this instance the rectification will be the responsibility of the operating company, and in all likelihood will have fairly stringent penalties applied on top of that due to unavailability of the sites.

The architect and design team should be given a damn good going over too. There are lots and lots of external people who get paid handsomely to look after the govt/LA’s interests, design, PM, sign the works off etc. They always seem to get away scot(!) free.

mrhoppy – Member

In this instance the rectification will be the responsibility of the operating company, and in all likelihood will have fairly stringent penalties applied on top of that due to unavailability of the sites.

Which is all fine but doesn’t change the fact that we have walls falling off schools. It could have been a baby robin’s face… As it is, it’s “just” massive disruption for school kids, many of whom start their exams in 2 weeks. Money doesn’t fix that.

I wonder how many folks here would defend a thief by saying “Yeah but the police should have stopped them and the owner should have had better locks”

I wonder how many folks here would defend a thief by saying “Yeah but the police should have stopped them and the owner should have had better locks”

Not really a useful analogy as I’d be very surprised if anyone set out to deliberately build a shoddy building. The whole thing needs a proper RCA done, I don’t think us folk on the internet can tell why the failure to design/build properly occurred and why it was signed off. Sounds possibly like a load of failures along the line. Key thing is now to learn from it and not make the same mistakes again.

Surely the authorities in Scotland should be looking at all buildings constructed by the builder + their subcontractors?
This size of project would have only been a small part of their order book.

It’s likely lots of people are walking past or working in buildings they’ve built.

Carlisle’s Cumberland infirmary was built as PFI and now has a catalogue of issues associated its fire separation and non compliance with building control. Two NHS trusts are refusing to take over the hospital