Private Finance Initiative (PFI)
A method of providing funds for major capital investments where private firms are contracted to complete and manage the projects. These contracts are typically given to construction firms and last a long time, sometimes up to 30 years. The public services are leased to the public and the government authority makes annual payments to the private company. Investopedia Says:
Private finance initiatives were originally started as part of the British government’s strategy for providing high quality services. A PFI is used when it meets certain requirements and presents a clear value for money and does not surrender any terms or conditions of the workforce.
Road building is an example of a type of project that is frequently used in PFI. Related Terms:
Capital
Fiscal Policy
Government Purchases
Private Company
Public Company |