The NPD model is an alternative to the traditional private finance initiative (PFI) model in Scotland, and has been used in the education and health sectors. It is currently being rolled out in the transport sector. The NPD model has been fine-tuned since its introduction, and this explanatory note clarifies and summarizes the basic principles and benefits of the model. The NPD model has a structure that includes a private sector partner, a public sector partner, and a junior investment. The key features of the NPD model include a fixed term of up to 35 years, a clear risk-sharing arrangement, and a focus on delivering public benefits. The NPD model also has the potential to generate surpluses for reinvestment in the project or for other public sector uses.
