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Al-Sharif, F and Kaka, A (2005) Private finance intiative project's financial modelling. In: Khosrowshahi, F (Ed.), Proceedings 21st Annual ARCOM Conference, 7-9 September 2005, London, UK. Association of Researchers in Construction Management, Vol. 1, 287–94.
- Type: Conference Proceedings
- Keywords: private finance initiative; financial management; modelling
- ISBN/ISSN: 0 902896 93 8
- URL: http://www.arcom.ac.uk/-docs/proceedings/ar2005-0287-0294_Al-Sharif_and_Kaka.pdf
The number of deals signed with the Private Finance Initiative (PFI) type of arrangement is growing, where private firms become long-term providers of services rather than up-front asset builders. The financial aspects are mostly driving the decision of biding, where time, risk, cost of construction and operational process could be interlinked with the cash flow. In the biding stage, Financial models help to ensure whether the projects can provide an adequate return to the investment or not. This paper reports part of the findings of an ongoing PhD research on PFI financial modelling. The data is based on series of semi-structured interviews with executives in the PFI business. The paper concludes by reviewing the current financial models used in practice and describes the concept of a proposed model that is being developed to assist the project teams to forecast and assess the cash flow of PFI projects at the biding stage.