In May 2011 the London Borough of Tower Hamlets faced the risk of losing £60 million of government funding for the Building Schools for the Future programme. The Council needed to agree a variation to the contract with its existing PFI schools partner to enable it to directly manage substantial investment in its secondary school estate. Negotiations had ground to a halt and the then Secretary of State was keen to reclaim the funds if the deal could not be agreed by September 2011.
The Council appointed PMC Ltd to lead the negotiations managing the input of both it’s internal teams and external legal advisors to secure a successful contract variation. Peter Marsh led this assignment by understanding the key commercial drivers of the PFI partner and systematically working through each area of commercial and legal risk in a robust, open and commercially astute manner. The negotiations required not just the agreement of the PFI partner but also a number of their international funders who all had to be advised and understand that the contract variations did not alter the risk:reward balance established in the existing PFI contract.
After three months of extensive negotiations the existing PFI contract was varied with agreement of both the provider and the Council. The £60m BSF funding was safeguarded from being clawed back by the Government and the Council has now completed a major transformation of its secondary school estate.
Peter brought gravitas, astute commercial awareness and an unquestionable drive to succeed in these challenging negotiations. He quickly identified the key blockages to the negotiations by understanding the underlying commercial risks facing the PFI provider whilst effectively safeguarding the Council’s position. Without Peter’s tenacity and sophisticated communication skills the Council would have lost £60million BSF funding and the transformation of 6 schools would not have taken place.
Aman Dalvi, Corporate Director Regeneration, London Borough of Tower Hamlets
Please pass on my thanks to the LBTH project team who had to negotiate this variation whilst also delivering the wider BSF programme. I would like to note the amazing energy, drive, tenacity, lateral thinking and consistency of approach Peter Marsh brought to the team, I firmly believe Peter’s involvement was absolutely pivotal in achieving the end result both LBTH and THSL sought.
Michael Gregory, Amber Infrastructure Limited, Owners of Tower a Hamlets Schools Ltd PFI