Risk in Private Finance Initiative Projects::A Public Sector Perspective

The management of public sector risk is increasingly seen as a priority area of UK government policy. This has been highlighted recently by the Prime Minister Gordon Brown who stated that “the issue of public risk is one of the most challenging areas of policy-making for any government” (Strategic Risk, 2008). In response to these challenges, the UK Prime Minister has appointed a new body - the Risk and Regulation Advisory Council (RRAC) which is tasked with improving the way risk to the public is understood and managed. One area of particular concern with regard to the governance of public sector risks involves projects procured via the Private Finance Initiative (PFI). These projects involve long-term contracts, complex multi-party interactions and thus create various risks to public sector clients. Today, most PFI actors acknowledge the potentially adverse effects of these risks and make an effort to prevent or mitigate undesirable results. As a consequence, issues of risk allocation, risk transfer and risk management have become central to the PFI procurement process. This paper provides an overview of the risk categories and risk types which are relevant to the public sector in PFI projects. It analyses risk as a feature of uncertain future project-related events and examines potential pitfalls which can be associated with PFI risk management on the basis of a case study of a high-profile PFI hospital in Scotland. The paper concludes that, despite the trend towards diminished risk profiles during the operational phase, the public sector continues to be exposed to significant risks when engaging in PFI-based procurement.

From brown envelopes to community benefits: the co-option of planning gain agreements under deepening neoliberalism

The provision of physical and social infrastructure in the form of roads, green spaces and community facilities has traditionally been provided for by the state through the general taxation system. However, as the state has been transformed along more neoliberal lines, the private sector is increasingly relied upon to deliver public goods and services. Planning gain agreements have flourished within this context by offering another vehicle through which local facilities are privately funded. Whilst these agreements reflect the broader dynamics of neoliberalism, they are commonly viewed as a tool which can be employed to challenge these very dynamics by empowering local communities to secure more just planning outcomes. This paper counters such claims. Based on evidence gathered from 80 interviews with planners, councillors, developers and community groups in Ireland, the paper demonstrates how planning gain agreements have been strategically redeployed by the holders of political and economic power to serve their own ends. In seeking to understand why and how this has occurred, specific consideration is given to the changing power dynamics between the state and private capital under neoliberalism. The paper highlights how institutional arrangements have enabled developers to infiltrate the political sphere in more subtle and implicit ways than ever before. We conclude by arguing that planning gain must be understood as a mechanism which has been manipulated in ways which essentially work to preserve and enhance, rather than redress, existing power imbalances in the planning system by facilitating large scale transfers of wealth upwards in society.

Sustainable solutions for the construction sector: integration of secondary raw materials in the production cycle of concrete

The construction industry is one of the largest consumers of raw materials and energy and one of the highest contributor to green-houses gases emissions. In order to become more sustainable it needs to reduce the use of both raw materials and energy, thus lim-iting its environmental impact. Developing novel technologies to integrate secondary raw materials (i.e. lightweight recycled aggre-gates and alkali activated “cementless” binders - geopolymers) in the production cycle of concrete is an all-inclusive solution to im-prove both sustainability and cost-efficiency of construction industry. SUS-CON “SUStainable, Innovative and Energy-Efficiency CONcrete, based on the integration of all-waste materials” is an European project (duration 2012-2015), which aim was the inte-gration of secondary raw materials in the production cycle of concrete, thus resulting in innovative, sustainable and cost-effective building solutions. This paper presents the main outcomes related to the successful scaling-up of SUS-CON concrete solutions in traditional production plants. Two European industrial concrete producers have been involved, to design and produce both pre-cast components (blocks and panels) and ready-mixed concrete. Recycled polyurethane foams and mixed plastics were used as aggre-gates, PFA (Pulverized Fuel Ash, a by-product of coal fuelled power plants) and GGBS (Ground Granulated Blast furnace Slag, a by-product of iron and steel industries) as binders. Eventually, the installation of SUS-CON concrete solutions on real buildings has been demonstrated, with the construction of three mock-ups located in Europe (Spain, Turkey and Romania)