Covering all the bases in fire station PFI scheme

We acted for the lenders in the financing of a local authority PFI scheme for the design and construction of four new build fire stations and five refurbished fire stations in Suffolk.

As part of the bank's security for the financing, we carried out a detailed review of the draft project agreement, construction contract and facilities management agreement as well as the other draft project documents in order to advise on the terms of direct agreements and collateral warranties to be provided by the contractor, FM provider and each of the design consultants.

We ensured that the project company had adequately stepped down to the contractor all the construction risks arising under the project agreement and advised the bank to insist on changes to the project documents so that the borrower's risks were adequately covered. Our team advised on and negotiated the terms of the performance bond (with adjudication provisions) which was to be assigned by the project company to the lenders.

Subsequently, we advised on a variation to the scheme to substitute a new build fire station (on a brown field site) for a refurbished fire station. This resulted in the need for significant amendments to the documentation, the drafting of which we negotiated and agreed with the other parties.

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