Alternative models for procurement of major infrastructure projects in Scotland

In the last decade in Scotland, a significant number of infrastructure projects have been delivered through the PFI/PPP procurement model. Although procurement through this approach has evolved through time and substantially matured, there remain some concerns over private sector returns, procurement lead times and affordability issues for the public sector. In the last few years, a number of variants on the PFI/PPP delivery model have been introduced to make use of standardized legal documentation. These variants include the Hub, the Non-Profit Distribution (NPD) model, Hybrid structures, NHS Local Improvement Finance Trust (LIFT), Building Schools for the Future (BSF), etc. It is partly because of concerns about PFI/PPP and its variants that the Scottish Government launched the Scottish Futures Trust (SFT). The Scottish Futures Trust would involve government agencies such as Local authorities working together to raise finance from the private sector through issuing of municipal bonds. The Scottish government asserts that PFI/PPP procurement was a costly mistake that leaves the Scottish taxpayer with crippling costs of borrowing. This paper outlines key features of the Hub and the Non-Profit Distribution principles. The Scottish government’s proposals for procurement of major infrastructure projects through the SFT are evaluated. Preliminary results of data collected through structured interviews on the attitudes towards the SFT model are analysed. It is concluded that the SFT model requires significant development before it gains the potential to delivery major infrastructure projects and services.