Headlines: April 19th, 2005

Companies that are short-listed for PFI contacts should have their costs repaid by the Government according to a major new report on the Private Finance Initiative published by the Royal Institution of Chartered Surveyors. RICS says the high costs involved in bidding for the deals are a barrier to many firms.The report, “Quantifying Quality”, says small businesses in particular are being put off by the expense of bidding for PFI deals. That, it says, means the client and, indirectly, the public are not getting best value from the full market of ideas and talent. RICS believes repayment of costs would act as an incentive to more companies to put themselves forward.

In spite of the call for rebates to companies, the Institution says opposition to PFI is anachronistic and pointless. According to the report, critics call PFI a glorified hire purchase scheme where the Government can ‘buy now and pay more later’. But RICS chief executive, Louis Armstrong, said, ” It is quite clear that PFI is here to stay and is rapidly becoming the only show in town for large-scale investment in public services.”

Mr Armstrong also pointed out that with interest in PFI growing in other European countries, the UK had a chance to position itself as a global leader in developing productive partnerships between the public and private sectors. The market for PFI skills was increasingly global and both business and governments are keen to learn more.

The report adds, though, that PFI must be improved, reviewed and constantly monitored as it was fundamental to future delivery of everything from transport infrastructure and health services to social housing and defence.

As well as calling for the reimbursement of costs for short listed tenders, the report recommends the establishment of a standard form of PFI cost report and a standard form of Whole Life Cycle Cost. It wants the UK to lead in developing a recognised or chartered PFI qualification and steps to ensure that only companies with the adequate and appropriate expertise enter PFI contracts.