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DELOITTE PUSHES JOINT VENTURE BENEFITS

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Councils should enter into joint venture contracts with private financiers, according to Deloitte & Touche. ...
Councils should enter into joint venture contracts with private financiers, according to Deloitte & Touche.

In A review of public and private partnerships, the firm claims a number of advantages for the private finance joint venture model. Under this model, the council forms a joint venture with a funding provider. Once approved, it would be able to let contracts for the necessary services using a traditional invitation to tender.

According to the report, a major advantage is that this significantly simplifies the procurement procedure. While under the normal system each successive PFI contract is subject to a protracted negotiation process, on the joint venture model subsequent PFI contracts form an extension of terms fixed in an initial generic contract.

'While the private finance joint [venture model] presents yet more challenges for beleaguered local authorities and PFI contractors alike, the benefits arising from such a solution will be considerable for all parties,' the report says.

Exclusivity provides an incentive for the funder to invest in the long-term client relationship, rather than merely seeking to maximise returns on a deal by deal basis.

A review of public and private partnerships is available from Deloitte & Touche, tel: 0161 455 6826.

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