Equivalent project relief in PFI/PF2
Equivalent project relief in PFI/PF2

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • Equivalent project relief in PFI/PF2
  • What is equivalent project relief?
  • Equivalent project relief and the HGCRA 1996
  • Case law on equivalent project relief clauses
  • Anatomy of an equivalent project relief clause

This Practice Note examines equivalent project relief (EPR) in PFI and PF2 projects. It considers the purpose of such clauses, the anatomy of an EPR clause and looks at related case law.

EPR clauses generally state that a sub-contractor is only entitled to claim for compensation, an extension of time (EOT) or relief from termination under the sub-contract, to the extent that the Project Co has been able to claim for the equivalent remedy under the Project Agreement—in other words, the Project Co has no greater liability to the sub-contractor than the Authority has to Project Co.

Note that in the 2018 Budget (delivered on 29 October 2018), it was announced that the government will no longer use PFI or PF2 on new projects (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). However, existing PFI and PF2 projects will continue to run.

What is equivalent project relief?

To understand what equivalent project relief is, it is necessary to understand the background that gave rise to these provisions.

As set out in Practice Note: Introduction to PFI and PF2 the structure of a typical PFI or PF2 project is that an Authority enters into a Project Agreement in relation to the project to be procured under which Project Co usually agrees to design, build, finance and operate the project over its life. Project Co is an SPV, usually formed specifically