The treatment of risk in construction contracts under PFI/PPP

In the U.K. the Private Finance Initiative (PFI) has not only had a fundamental effect on the way many construction projects are procured, but also upon the terms of contract under which the building works are let. There are some examples new standard forms appearing, for example those produced by the National Health Service and the Treasury. Comparison of two of these contracts - issued by the Private Finance Unit of NHS Estates and the Treasury Task Force Guidance- with the more 'traditional' contracts for design and construction (such as those produced by JCT and ICE) reveal considerable differences in the way certain issues are dealt with. Most important amongst these are design risks and liability for site conditions; the treatment of variations, delays, and claims; and the approach to Practical or Substantial Completion, and defects liability.