Perceptions of risk in the private finance initiative

Gallimore, Paul, Williams, Will and Woodward, David (1997) Perceptions of risk in the private finance initiative. Journal of Property Finance, 8 (2), 164-176.

Abstract

The UK Government’s Private Finance Initiative introduces new arrangements for the provision of buildings from which public services are delivered. These arrangements require the private sector to take on new forms of risk. Discusses the progress of the Initiative and focuses on a study to determine whether differences exist in the weighting given by different “players” to these risks. Argues that the existence of such differences would present an additional barrier to the PFI’s implementation. The findings reveal that one form of risk, namely that associated with revenue from occupancy under PFI, is viewed as both of greater importance and more uncertain than other risks. Generally, however, finds that perceptions of risk are not significantly different between the four groups examined in the study (surveyors, financiers, contractors and purchasers).

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