Precept set for Scots £75m not-for-profit PPP project

Project management specialist Precept has surfaced as provisional preferred bidder for Argyll and Bute Council's radical £75m not-for-profit schools PPP deal.
But because of the mould-breaking nature of the scheme, Dick Walsh, the council's education spokesman, warned: "This is not a done deal. This is a potentially huge decision and one which will not be taken lightly. Negotiations with Precept are still under way."
Argyll and Bute's pathfinder scheme operates by using subordinated debt rather than equity to fund the contract.
Profits above the debt interest payment are returned to the public sector. The council's private sector partners are guaranteed a level of profit on construction and FM, as long as performance targets are met.
Argyll and Bute claims that as several other councils are now showing interest in adopting a similar alternative approach to PPP after it managed to persuade the Scottish Executive to cough up an extra £171m for the 30-year project.
Precept's proposals cover up to 28 schools. There are plans for a stand-alone secondary school, six joint campuses with one secondary school and one or more primary schools on a single site, a primary campus with two schools on one site, plus a number of stand-alone schools.
Precept plans to use "at least" three contractors on the scheme: Laing O'Rourke; Barr; and John Dickie; with Mitie PFI handling the FM side.
The Schools for the Community group, headed up by Miller, was the only other group left in the hunt for the Argyll and Bute deal.
A third bidder, Babcock & Brown/Balfour Beatty, pulled out of the chase after the council initially insisted that all bidders must work up full designs for all the schools covered by the project.