Stephenson Harwood lands Caerphilly Council PFI work

Caerphilly County Borough Council has joined the public finance initiative (PFI) bandwagon and closed a £48m schools PFI project, the first in the area. After a two-year tender process, the contract to replace Lewis Boys Comprehensive School and Ysgol Gyfun Cwm Rhymni was awarded to Machrie.
Stephenson Harwood advised Machrie – a consortium comprising Ballast, the Royal Bank of Scotland (RBS), Wiltshier Facilities Management, and led by King Sturge – on its bid to design, build, finance and operate the two schools for a contracted period of 30 years.
Stephenson Harwood has an ongoing relationship with King Sturge, an independent partnership of chartered surveyors and property consultants, having worked with it on a number of projects in the past. Property partner David Cuckson said of working with the Machrie consortium: “Our client looked to us for our experience with PFI projects [and] we were more than able to fulfil all their business objectives.”
The scheme is one of 10 similar schools projects supported by the Welsh National Assembly. When the assembly first unveiled its PFI aims, it was inundated with interested responses, receiving 22 bids with a combined value of more than £370m. This more than doubled the initial three-year allocation of funds to PFI schemes. Peter Law, assembly local government secretary, said that those with the strongest initial business plans would be selected.
Lacking sufficient capital to fund new building work itself, the council seized the PFI opportunity presented by the assembly. Irene Dow in the council’s PFI department said that the schools were in desperate need of new accommodation and that the PFI scheme offered the only affordable way to build them.
Devonshires represented the council with a team led by head of PFI Mark Johnson. “We’re pleased to have assisted the council in developing such an innovative scheme to replace the existing accommodation,” he said.
RBS provided much of the finance for the deal and was advised by a Pinsent Curtis Biddle team, headed by partner Arthur Lovitt. He described the deal as a pleasure to work on. “It was a very nice deal to do for the people of Caerphilly, who will now get the schools they want,” he said.