The private finance initiative made the news for all the wrong reasons in January, following publication of the National Audit Office report Making Changes in Operational PFI Projects.

The NAO estimates £180m was paid out by public authorities to PFI contractors for changes in 2006.

Journalists were quick to highlight findings such as the difference in costs of minor repairs, claiming the public sector was being ripped off. For example, the NAO found that the cost to supply and fit an electrical socket ranged from £30.81 to £302.30.

But around 90% of contract managers from the public sector said they were satisfied or very satisfied with the quality of work done when changes were requested. And although the timescales for small jobs were longer than conventionally outsourced work, those for larger works compared well.

Following the release of the NAO report, news emerged that a Balfour Beatty-HSBC consortium had repaid £17,000 of maintenance fees on the Blackburn Hospital PFI after overcharging. The payment is thought to be the first of its kind.

A spokesman for the Construction Confederation said: ‘PFI is a relatively new mechanism ... As the market matures, prices will become more acceptable.’

Source

Construction Manager