Private Finance Initiatives
A PricewaterhouseCoopers case study

Page 1: Introduction

PricewaterhouseCoopers was created in 1998 by the merger of two firms - Price Waterhouse and Coopers & Lybrand - each with historical roots going back some 150 years and originating in London. PricewaterhouseCoopers, the world’s largest professional services organisation, helps its clients build value, manage risk and improve their performance. Drawing on the talents of more than 140,000...
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Page 2: Private Finance Initiative

Governments (the public sector) and the private sector (companies) are increasingly working together. PricewaterhouseCoopers is experienced in advising both private and public sectors. The privatisations and public/private sector partnerships are large and complex transactions, sometimes affecting entire industries. The Conservative Government launched the Private Finance Initiative (PFI) in...
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Page 3: Role of PricewaterhouseCoopers

Financial advisers such as PricewaterhouseCoopers undertake the management of this procurement process.  The procurement process is effectively a competition between the private sector bidders interested in bidding for that particular project. It is the role of the financial adviser to ensure that the procurement process is run on a fair and open basis to ensure that the bidder that brings...
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Page 4: The procurement process

PricewaterhouseCoopers was brought in to provide financial advice and assistance in managing the procurement process. In this instance, PricewaterhouseCoopers was acting on behalf of the local authority. The Hereford and Worcester waste management project is the first fully integrated waste management PFI and a number of factors needed to be considered. Waste management consists of: Refuse...
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Page 5: The contract and the risks

A PFI in waste management allowed Hereford and Worcester local authorities the opportunity to integrate the various waste management systems into one contract, and gain access to capital investment and PFI government credits. The cost of the services was negotiated according to the level of services gained (amount of waste disposed) and included environmental targets for recycling with financial...
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Page 6: Conclusion

The procurement process can be lengthy. More than two years elapsed between placing the advertisement in the recognised European trade journal, OJEC, and completing the negotiation process. Twenty applications were received, and at the end of the process, FOCSA Services Ltd was selected as the ‘preferred partner’.The arrangements for payment by Hereford and Worcester local...
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