[“Skills shortage in PFI (project Finance Initiative) contract in UK”]

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Acknowledgement

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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Abstract

PFI project demand would increase over the coming year, but there would not be adequate requirements to meet it. This report shows that there are still problems exist in PFI scheme as many authors have identified the challenging problems in PFI. The purpose of this study is to conduct a theoretical review of literature relating the challenging problems in pfi procurement route. It aimed to examine the observations of those working in the built environment on the current status of problems in the industry and it also looked at the key areas to overcome those problems. The research method is investigative throughout the objective of understanding the knowledge about related area. This result in to evaluate and analyse the data of the literature to investigate the problems in PFI.

Table of Contents

CHAPTER 1: INTRODUCTION1

Background1

Research Question5

Research Aims and Objective5

Poor Risk Management (PFI)8

Lack of Required Skills in the Public Sector (PFI)10

Lengthy Negotiations and Complex Contracts (PFI)11

Structure (PFI)13

Cost (PFI)14

Building Quality (PFI)16

CHAPTER 1: INTRODUCTION

Background

UK construction industry will continue to grow. The construction skills network report 'Blueprint for UK construction 2006' states that its output expected to rise to about 12.7 per cent by 2010, still there is an acute shortage of houses particularly in South East of England. It requires a big infrastructure and housing projects emphasising on brown-field sites and high-density houses.

The skills update report by skills network (2007) states that the future of the construction industry in the UK expected to show the characteristics such as independent output growth will exceed publicly funded construction program and the commercial sectors are also expected to grow due to the continued recovery for offices market also further increases in PPP/PFI education and health projects.

The Private Finance Initiative (PFI) announced in the 1992 Autumn Statement with the aim of achieving closer partnerships between the public and private sectors. Yule (2001) states in his report, in 1992 the Conservative Government of the UK initiated the Private Finance Initiative (PFI) as a method of providing buildings and services for the public sector such as schools, prisons, roads, hospitals- without connection of the public sector in funds outlay. It was one of a range of policies to increase the involvement of the private sector in the provision of public services. “One on the major arguments in favour of PFI is that it will provide value for money by bringing private-sector expertise in to manage public services” (ACCA 2002).

Amongst the key factors in the construction sector as PFI, Private Partnership (PPP) also has been widely adopted ...