PricewaterhouseCoopers has advised the UK Ministry of Defence on its appointment of Defence Training Services Ltd to design, build and operate the new Army Foundation College under the Private Finance Initiative (PFI). The deal, which reached financial close on 8 February is one of the first deals to take forward the new 'market value' compensation provisions which now form part of the Treasury Taskforce Standard Terms and Conditions for PFI contracts.

The new Army Foundation College in Harrogate aims to recruit young men and women to help met the target of an additional 3,300 personnel set under the Manning The Army initiative.

Defence Training Services Ltd, a joint venture between Jarvis Projects Ltd and Halifax plc, will provide a range of services over a 30 year concession period, including facilities management, library services, catering and vocational education. The project has a development cost of £82.6m and a lifetime cost of £444m.

Nigel Middleton, Head of PFI at PricewaterhouseCoopers, said: "This is our first PFI completion of the year, and represents a natural successor to our advice to the MoD on the Joint Services Staff College PFI scheme in 1998. This deal posed a number of funding challenges, particularly involving the development of temporary facilities."

Richard Byatt