This second term Labour government's penchant for PFI contracts, which have been running since before 1997, is now strengthening. Under the Conservatives, only 50 deals were signed over five years — the Conservatives having devised PFIs as a way of clearing public spending from the UK balance sheet.
Labour has so far clinched 300 deals worth £9.5bn and is now back in office promising an extra 100 hospitals and 3,000 surgeries by 2010. There are abundant opportunities to build, invest in and manage hospitals.
These opportunities are open to players such as AMEC and Serco, who are active in the PFI healthcare sector. The sector offers a steady earnings stream in contrast to the volatile nature of one-off projects.
Hospital contracts offer a lucrative future. Tilbury Douglas, now called Interserve, has won a £530m contract over four decades to build and manage hospitals in the Midlands.
Last December Interserve bought facilities management group Building & Property for £77m so it could take advantage of PFIs. In March the company had secured 10 PFI contracts among its £3bn worth of orders.
First PFI hospital opens in Scotland
Kier Group is involved in four hospital contracts and the first, in East Kilbride, has just opened as Scotland's first PFI hospital.
Source
The Facilities Business
Postscript
Malcolm Craig is editor of Stockmarket Confidential