The context is that we have used the standardization approach to contracts in the UK over the last 7 years and we have found that it works well in general. It has led to a very significant improvement in the quality of contracts in all sectors. We have a standard guidance and design document that sets out general principles for each key element of the project agreement. The main objective of the guidelines and development is to attribute any risk to the party best placed to deal with this risk. It also contains some standard models for inclusion in chords. In some cases, this formulation is mandatory and funding (for the payment of long-term uniform payments) is not provided if it is not used. In other cases, it is recommended that the parties be given a strong indication of what would be appropriate. The guide is called „Standardization of PFI Contracts Version 4“ (reduced to SOPC4). On the issue of the critical size of the market, we think it depends on situations. By publishing our guidelines, we believe we can provide a forum for discussion and exchange of know-how. In Japan, majorities of PFI projects are implemented by local governments.
Our department, the PFI Promotion Office, does not have the authority to approve or subsidize PFI projects. Therefore, the know-how exchange vehicle is necessary and the size of the market does not matter. There are many relatively small and simple PFI projects in Japan. Some have argued that, in many PFI projects, project funding is not „real“ project funding (but funding for governments) and also argued that our current guidelines for PFI contracts are not sufficiently suited to project funding. We therefore need to discuss whether project funding is essential for PFI projects. In the future, our standard business principles will serve as the basis for the development of standard contractual clauses to reduce the cost and time of contract negotiations. In the meantime, we want to ensure that current social infrastructure projects use, as far as possible, a common basic contract. The flexibility of innovation is maintained by allowing a departure from the commercial principles of an individual project from standard business principles, if approved by the Ministry of Finance. It is also important to keep in mind that while the commercial aspects of contracts can be standardized to a point, the technical aspects will be largely project-specific. HM Treasury has instructed PUK to develop the guidelines and projects (SOPC) and to act as a regulatory authority for review and advice in the event of a deviation from the fundamentals and the necessary development in each project, before the funding is released and the contract is signed. You can access these documents (both SOPC4 and standard sector forms) in the guide section of our website (www.partnershipsuk.org.uk) and pUK offers four support services for PFI and PPP projects, ICT projects and marketing activities. For more information, visit our contact page.
Sharing information on the subcontracting conditions and costs of each market can be useful in allowing objective calculation of price changes based on changes in the production specification or objective calculation of compensation for partial or total termination of PFI contracts. However, there are disagreements about the extent and date of disclosure. We do not have enough projects in different sectors of the state to justify standard sector principles or contracts.