UK will need to look to European firms to meet PFI demand in the health sector
UK companies will not be able to cover the demand for PFI hospitals, and European companies will be needed to meet the shortfall, according to a leading economist.

'Only about six companies in the UK' are looking at hospital PFI deals, Jacquie Cannon, director at Construction Forecasting and Research, told delegates to the 'Blair's Billions' PFI conference. With companies likely to limit their involvement to a couple of projects each, the NHS would need to look elsewhere, she said.

The trend towards European company involvement has seen two of the latest deals going to European firms — one to a French company, the other to a German firm.

In August this year the Bouygues Consortium, comprising Bouygues UK (the construction subsidiary of the Groupe Bouygues), Ecovert and Charterhouse won the £50m PFI contract for West Middlesex University Hospital NHS Trust. At the end of last year, German firm Bilfinger + Berger won the £30m PFI deal to provide maternity and acute facilities at the Royal Hull Infirmary for Hull and East Yorkshire Hospitals NHS Trust.

About 100 new hospitals are planned by 2010. Nine will be built this year at a cost of £1.36bn, and another nine will be constructed in 2002 at £1.6bn.

Cannon believes that the PFI process could lengthen the time it takes to get a new hospital fully operational, as the deals are more complex than those in more traditional construction deals.

In 2000, about eight per cent of public spending was in the health sector. Cannon believes this figure is unlikely to increase over the next two years, despite reports that more than £11bn of investment is to be channelled into hospital PFI schemes over the next three years.