Abstract:
The Private Finance Initiative (PFI) as a sub-set of broader procurement approach of Public Private
Partnerships (PPP), uses private sector capacity and public resources in order to deliver public sector
infrastructure and/or services. In 2012, the UK Government publicly launched the new model, called
“Private Finance 2 (PF2)” with some significant reforms to the PFI model, which are particularly aimed
at tackling inefficiency, increasing transparency, shortening procurement periods and attracting new
sources of finance. PF2 can be used as an instrument for producing new and more effective ways of bringing
public services. While other countries are moving from PFI model to PF2 and other variants of PFI model,
in Sri Lanka, there is a dearth of PFI type projects. However, there is a considerable number of researches
on PFI model in Sri Lanka, but there is no evidence for researches on PF2 model. Accordingly, this is an
initial study aimed to determine the prospect of implementing PF2 model in Sri Lanka. Applicability of PF2
model in the Sri Lankan context was defined using the collected through expert interviews and suitable
sectors to implement PF2 model were ranked based on Relative Importance Index (RII) value. Construction
industry advisors of the government and construction organizations who are either familiar and
knowledgeable with the model were selected for data collection. Results show that the PF2 model is
generally applicable in Sri Lanka compared to PFI features. Transportation, provision of electricity and
water, and health care were recognized as the most suitable sectors to apply PF2 model in Sri Lanka. On
the other hand, real estate and educational sectors have been recognized as sectors which are not suitable
to carry out under the PF2 model.
