Contractor's decision to pull out of £30m Camden pathfinder scheme leaves only one bidder in race.
The government's plans to extend the PFI principle to social housing suffered another setback after Bovis Lend Lease decided to pull out of the two-horse race for a refurbishment scheme in Camden, north London.

A spokesperson for the contractor said it had told Camden council that it would be pulling out of the £30m scheme to refurbish five tower blocks containing 600 flats on the Chalcots estate two weeks ago.

He said: "It was a commercial decision based on the amount of resources and time we could afford to spend on the scheme. It is a very complex deal, and we had to give commitment to other projects and deals that we are working on."

Bovis' withdrawal leaves only the Partners for Improvement consortium in the running. The move, which is the latest addition to the catalogue of delays and funding disputes that have hit PFI housing, casts doubt on the feasibility of the scheme in its present form.

An insider at the Partners for Improvement consortium said it was now uncertain what would happen to the scheme. He said: "All that's clear is that there is now no competition on the scheme, which means the whole thing could be repackaged before tender prices are even submitted. We are worried because we have spent money to get to this stage of the tender and now we may lose a great chance to win it."

It was a commercial decision based on the amount of resources and time we could afford to spend

Bovis Lend Lease spokesperson

Carillion Housing, which is owned by Morgan Sindall, dropped out of the running for the contract in December last year. Camden council refused to comment on Bovis' withdrawal.

n Partnerships UK, the Treasury's PFI advisory body, is planning to become a co-sponsor of some of the second wave of pathfinder housing schemes.

The body, which is partly owned by the private sector, is looking at signing development partnership agreements with local authorities, as well as standardising the procurement of the next wave of eight projects.