An order has been made allowing the government to exempt PFIs from a certain payment rule
The government has opened the door to exempting PFI schemes from one of the payment rules in the Construction Act.
A commencement order made on 23 June allows the government to exempt PFI schemes from the Act’s ban on “pay when certified” clauses in future. But the government has not yet made the change.
The clauses allow an organisation to delay payment to a sub contractor until the organisation is paid by the client. The clauses are relevant to PFI schemes because the subcontractor is hired by a project vehicle, which cannot pay subcontractors until it is given money by the public authority that controls it.
However Rudi Klein, chief executive of the Specialist Engineering Contractors Group, strongly objected to possibility of an exemption for PFI schemes. He added that PFI schemes should be required to have a project bank account.