[ Questions answered: Project banks accounts ]
NEED TO KNOW?
With the economy showing distinct signs of growth, end users are starting to examine business continuity plans. PAUL REEVE takes a look at one of the key business developments to address late payment that all electrical contractors should be aware of
L
ate and non-payment is still a major problem in our industry. At best, late payment can put a serious brake on a contractor’s business plans. At worst, it can make a contractor insolvent – even if it
was healthy to start with. Serious problems need serious solutions, and one solution is the project bank account (PBA). The aims of a PBA are to ensure that payments to contractors and others in the supply chain are made on the contractually agreed dates, and to provide a good degree of payment security. Ten years ago, PBAs were generally regarded
52 ECA Today March 2014
PROJECT BANK ACCOUNTS (PBAs)
as an interesting – if contentious – idea. However, PBAs are now well and truly off the drawing board, and more than £4bn of central government construction will be procured using PBAs in 2014. They are now being either used or piloted in public procurement in Wales, Scotland and Northern Ireland. In England, local authorities are increasingly taking a good look at them, while some major projects –such as Crossrail – have also chosen to use PBAs. So what do you need to know about PBAs? The
questions and answers below outline what PBAs are, and what they are likely to mean for building services contractors…
Q: What is a project bank account (PBA)? A: A PBA is a ‘ring-fenced’ bank account from which payments are made directly – and simultaneously – to the lead contractor and named members of the supply chain. However, a PBA is not simply a place to put money; it is also a trust. A PBA is held in the names of the trustees
SHUTTERSTOCK / BINKSKI /SIGN SYMBOL PRODUCTION
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