Formation of super-team to bid for PFI work creates concern over consolidation in market.

A LINK-UP between Bovis Lend Lease and French facilities management giant Sodexho could see a shake-up in the private finance initiative market.

The pair have been shortlisted for hospitals in Oxford, Romford and Roehampton and are actively targeting more work.

The move has led to predictions that the lack of other big FM firms will mean that rival contractors will have difficulty putting together equally credible teams.

A source at one contractor said: “These two have the potential to create very strong bids. There are other groups that can compete with them but there are fewer soft services providers out there for contractors to pair up with.”

Consolidation in the FM market has included the acquisition of Gardner Merchant by Sodexho, in 1995, and the takeover of UK firm RCO by Danish firm ISS in June.

A Bovis Lend Lease spokesperson said that, apart from the three hospitals they were already shortlisted for, the pair were interested in four other potential hospital schemes.

He added that the two firms would consider bidding for projects outside the healthcare sector. “This is not an exclusive arrangement yet with Sodexho. It’s just on hospitals now but it may extend to other PFI schemes – we are looking at opportunities that might be there.”

We hold Bovis Lend Lease in very high regard. It is the one we want to work with

Sodexho Spokesperson

One rival contractor predicted that the link-up would extend to other sectors. He said: “I think that they have an appetite for a wide number of schemes, beyond hospitals.”

A Sodexho spokesperson said the FM giant, which has a turnover of £5.4bn and operates in 66 countries, saw Bovis as its preferred partner. The spokesperson said: “We hold it in very high regard. It is the one we want to work with.”

Leslie Kent, a building analyst with stockbroker Seymour Pierce, said the link-up was a sign that the PFI market was maturing.

“It’s taken 10 years to drag it through the legal and accounting system. Now, the PFI is offering sensible long-term profit for contractors. The ad hoc nature of the business is falling away.”

Bovis Lend Lease, which has also won preferred bidder status for a £27m 100-bed hospital in Hexham, Northumbria, said earlier this year that it was targeting the PFI sector.

Chief executive Ross Taylor has previously said the company planned to increase the volume of PFI work compared with fee-based construction work.