The PFI industry was given a potential boost by a last-minute Commons amendment (No.4) added to the Local Democracy, Economic Development and Construction Bill as it completed its report and third reading stages in the House of Commons on 13 October 2009. The Bill has now been passed to the House of Lords for consideration of amendments.

The amendment does offer the Secretary for State and Scottish and Welsh Ministers the flexibility to disapply provisions in Part 2 of the 1996 Construction Act, which allowed subcontractors to take a PFI company to adjudication, despite the fact disputes between the PFI firm and public authorities had to go through lengthier and more costly court proceedings. The industry had argued this increased the investment risk and discouraged banks from lending money for PFI projects.

For more information, please contact John Conder, Partner in our Commercial team.