Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

PFI definition

What does PFI mean? PFI (private finance initiative) describes, in practice, a long‑term public–private partnership under which a private sector special purpose vehicle (SPV) finances and operates, and usually designs and constructs, public sector assets or services. The public authority pays a performance‑linked unitary charge over the term. PFI is not a statutory definition but a policy and market label; the legal framework is found in the project agreement and related documents, HM Treasury guidance (including SoPC4), and public procurement law. Key features include limited‑recourse project finance, transfer of design, construction, lifecycle and maintenance risk to the private sector, availability‑based payment and deductions,...

Drafting and enforcing equivalent project relief in PFI/PF2: HGCRA 1996 constraints on pay when paid and key case law

Published by a LexisNexis Construction expert

Practice notes

This Practice Note explores equivalent project relief (EPR) in PFI and PF2 schemes, outlining the purpose of these provisions, the composition of an EPR clause and key cases.

EPR clauses usually provide that a sub-contractor may claim compensation, an Extension of time (EOT) or relief from termination under the sub-contract only to the extent that Project Co has secured the equivalent Remedy under the Project Agreement; in short, Project Co bears no greater liability to the sub-contractor than the Authority bears to Project Co.

Note that in the 2018 Budget (delivered on 29 October 2018), the government announced it would stop using PFI or PF2 for new projects (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). However, existing PFI and PF2 projects continue to run.

What is equivalent project relief?

To understand what equivalent project relief means, it is necessary to consider the background that prompted these clauses. As explained in Practice Note: Introduction to PFI and PF2, the structure of a typical PFI or PF2 project is that an Authority enters into a Project Agreement in relation to the project...

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Web page updated on 21/05/2026

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