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Unitary Charge meaning

What does Unitary Charge mean?
In PFI/PPP projects, the unitary charge is the periodic payment the authority (the contracting authority) makes to the private-sector project company (Project Co/SPV) for making the facility (newly constructed or refurbished) available and for delivering the contracted services. It is a contractual concept rather than a term defined by statute or case law, though its structure is reflected in HM Treasury SoPC/PF2 guidance, Scottish standard forms and Irish PPP guidance. Often described as an availability-based service payment. Key features include: commencement on service availability (often by sections), monthly payment, indexation (commonly to RPI or CPI), and deductions for unavailability or performance failures under the payment mechanism. The charge typically comprises elements for capital repayment and financing costs, operations and maintenance, lifecycle replacement, insurance and margins, with possible pass-throughs for utilities and change-in-law adjustments. Across England & Wales, Scotland, Northern Ireland and Ireland, usage and mechanics are broadly consistent, with local forms (e.g. Scottish NPD/hub and Irish PPP project agreements) employing equivalent availability- and performance-based regimes. Practically, the unitary charge funds O&M and lifecycle obligations and services lenders’ debt, making it central to pricing, risk allocation, abatement remedies and step-in rights under the project agreement.
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View the related Practice Notes about Unitary Charge

PRACTICE NOTES
On-Street Parking under the Road Traffic Regulation Act 1984: Local Authority Powers to Designate, Control and Charge (including meters, devices and accounts)

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PRACTICE NOTES
UK PFI and PF2: project structure, standardisation (SoPC4/SoPFC2), funding and unitary charge, PF2 equity participation, post-2018 position, and key contractual and dispute issues

This Practice Note offers a high-level overview of the Private Finance Initiative (PFI), outlining what PFI entails, how a standard PFI project is put together, and its core features. It also covers PFI’s successor, ‘PF2’. In the 2018 Budget, delivered on 29 October 2018, the government stated that PF2 will not be used for new projects. Even so, existing PFI and PF2 schemes will continue, and, given the usual lifespan of these arrangements, they are likely to run for many years. What is PFI? PFI is a way to procure the design, construction and operation of public services and public sector infrastructure such as hospitals, schools, leisure facilities, social housing, waste management, emergency services, defence, roads and highways, social care and prisons. Introduced in 1992 by the Conservative government and later keenly adopted by their Labour successors, it was regarded as a mechanism for moving public projects off the national balance sheet while partnering with the private sector to deliver schemes with substantial up-front capital costs that, under...

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PRACTICE NOTES
UK PFI, PF2 and PPP glossary: contracts, changes, payment mechanisms, FM services, risk allocation, adjudication and handback

Abandon Describes a situation where the contractor halts performing the works for an extended, uninterrupted span of days (eg 20 business days) or for a greater aggregate of non-consecutive days (eg 60 business days) across the project’s duration or within a stated timeframe (eg 12 months), doing so wilfully and without justification at any stage of delivery or execution. Abandonment is ordinarily treated as a contractor default, enabling the Authority to terminate the Project Agreement and/or permitting Project Co to end the construction contract immediately for cause. Acceptance Tests Tests carried out to confirm whether the facility (or another project asset) achieves the standards required for the Authority to deem facility complete and accept it. Access Protocol The protocol that Project Co must follow in order to obtain access to the buildings forming part of the project at any time during the term. For instance, on a social housing scheme or a school, prerequisites would have to be satisfied by Project Co before...

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