Ministers published the strategic business case for the Scottish Futures Trust initiative to be supported by a new company established in the public sector.
The new company will aim to release up to £150m each year for increased investment in infrastructure through greater partnership, improved preparation and handling of projects, and better value finance - including the non-profit distribution model.
The uniting of expertise will enable a Scotland-wide municipal bond to fund future infrastructure projects.
The trust should provide opportunities for increased investment in Scotland's vital public service infrastructure - including schools, hospitals and transport projects.
The government aim to learn the lessons from previous PFI contracts to reduce the cost of funding and deliver more effective investment planning, procurement and delivery.
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At the Infrastructure Investment in Scotland conference at Heriot-Watt University, First Minister Alex Salmond said: "Scotland has a proud record of delivering new and innovative approaches to public investment. The development of the Scottish Futures Trust is the way forward, offering both better value finance and secure investment.
"It is right for Scotland, right for our public services, and right for our times. By releasing up to £150 million each year for increased investment, we can ensure more resources for our public infrastructure compared to wasteful PFI."
Finance Secretary John Swinney said: "We will establish a new company in the public sector to provide the schools, hospitals and transport infrastructure that Scotland needs, in a far more cost effective way.
"By putting non-profit distributing principles (NPD) at the core of partnership delivery and funding, we have already removed the element of PFI that delivered the most extreme profits, and a Scotland-wide municipal bond opens up the prospect of further benefits."
He said the Scottish Futures Trust company will support public bodies in delivering more cost effective infrastructure for taxpayers: "It means we will get more for our money - more bang for the people's bucks."
Professor John Kay, a Fellow of St John's College, Oxford, Visiting Professor of Economics at the London School of Economics, and a member of the Council of Economic Advisers, said: "PFI is well past its sell by date. The Scottish Futures Trust can achieve its three objectives of cheaper finance, better project management and the operation of infrastructure projects for the benefit of the people of Scotland."
SFT will be formed this summer and work with the public sector and market.
(GK/NS)
