KPMG, Cyril Sweett and Clifford Chance draw up business case for 600-bed Shanghai scheme

A group of UK consultants are working for the Chinese government on a feasibility study for the country’s first PFI hospital scheme.

KPMG, Cyril Sweett and Clifford Chance are developing a business case for a 600-bed hospital in Shanghai. The study, to be published next month, could lead to UK companies winning contracts in the region.

China has some PFI road and infrastructure projects but other elements of the PFI market have yet to be developed.

Talks between the Chinese government and the consultants were set up by the DTI nine months ago, when representatives from Shanghai visited the UK on a trade mission. Since then the consultants have visited Shanghai to discuss the hospital project, a site for which has been identified.

The feasibility study will provide project costs and likely returns for the Shanghai hospital.

The aim is to prove that the PFI procurement route would provide value for money for the Chinese government.

Jimmi Bradbury, international director at Cyril Sweett, said the Chinese government was interested in the UK’s procurement process and was keen to learn about the legal and financial processes involved.

He said: “Like most countries outside the UK, PFI is just starting to develop in China. It is a natural progression to export UK PFI skills to new markets.”

China is a burgeoning economy and many UK companies are keen to capitalise on the expansion. It has been estimated that by 2015, the Chinese economy will be bigger than that of Japan, and that it will have outstripped the US by 2039. In 2003, China received $54bn (£29m) of foreign direct investment.

Bradbury said that trade delegations from other countries, including Japan and Mexico, had also travelled to the UK to learn about PFI projects.

He added that in Spain, Portugal, Ireland and France the PFI market had been under way for about two years.