Scottish firms cash in on PFI projects boom

Scottish law firms such as McGrigor Donald are profiting from a Scottish private finance initiative (PFI) boom.

Last week McGrigors worked on three PFI deals worth u133m. It advised Stirling Water Seafield on its u100m bid in the UK's first water and sewerage PFI to be financed by bond issue on the capital markets. It also advised Kinoull House, a joint venture between Morrison Construction and The Royal Bank of Scotland, on its u20m local authority office project – another first in Scotland.

And last week it advised Highland Hospitals on a u13m community mental health care hospital. The initiative included the design, construction, financing and operation of the hospital in Inverness.

Donald Stevenson, McGrigor Donald's head of banking and projects, says: “The fact that three deals have concluded almost simultaneously signifies the recent shift of pace in PFI activity, with a greater number of lengthy deals now reaching completion.”

New public/private partnerships are being planned in a range of sectors, including education, housing, infrastructure, healthcare and information technology.

Vincent Connor, a partner at Masons, says: “What we're seeing is the culmination of a number of projects which have been in the pipeline for some time. I think what has broken the logjam is the Treasury taskforce and the Labour government's commitment to PFI.

“We're not looking at a short-term boom but a long-term increase, with business pushing to get projects moving. As more parties move to dip their toes in the water in Scotland, there is a growing willingness for firms to get involved in PFI deals.”