The Government's Private Finance Initiative received a boost this week when Greenwich University opened the first PFI-funded building in the higher education sector.
The Pounds 12 million student village at Greenwich's Avery Hill campus is a collection of redbrick flats and maisonettes built around courtyards and catering for 660 students. Financed by Varsity Funding, the education specialists headed by the Welsh Funding Council's chairman Sir Idris Pearce, the Greenwich village will be owned and operated by the constructors Wimpey/Tarmac for the next 30 years.
The university's only obligation is to ensure that all the rooms are filled, guaranteeing a steady income for Wimpey/Tarmac. It felt that, given the expanding student market, this was a risk worth taking.
Gillian Shephard, Secretary of State for Education and Employment, opened the village and trumpeted the enterprise as "an example to everyone in higher education of what can be done using the Government's Private Finance Initiative". John McWilliam, the university's deputy vice chancellor responsible for the project, countering the reservations of the Committee of Vice Chancellors and Principals published earlier this year, said: "This shows that PFI can work for universities."
The university would be seeking a second PFI deal for a new teaching block. "People, including the CVCP, say that PFI isn't suitable for academic accommodation, but that's nonsense," he said.
The lessons of Greenwich's PFI deal are to be packaged as a blueprint for other universities. But Mr McWilliam acknowledged that the Greenwich venture is far from typical.
Its origins go back beyond last year when the Government launched PFI in the higher education sector, and Mr McWilliam revealed that he stumbled over a PFI-type solution only after several months searching for an appropriate borrowing mechanism. It was only last year, when the deal was ready to be sealed, that the Government formally pronounced the build-own-operate-transfer (BOOT) project as PFI.
The Government expects other PFI projects to follow the success at Greenwich.
The Private Finance Panel confirmed that some of the 12 Government-backed "pathfinder" PFI projects, which range in size from Pounds 3 million to Pounds 24 million, are nearing completion.