But John Gains, chief executive of Mowlem, said there was no evidence that the Railtrack fiasco had harmed PFI deals. He said: "The City is bruised; it is not happy, but I don't think we've got any signs yet that PFIs won't be funded. There will be more deals."
He added that it was wrong to connect PFI deals with Railtrack, as the two were funded differently.
0Kier chief executive Colin Busby agreed and said the government needed PFI deals to improve the infrastructure.
Gains and Busby made their comments after the companies posted healthy results this week. Mowlem's pre-tax profit jumped 20% from £24.5m to £29.5m for the year to December 2000. Group turnover rose £300m to £1.7bn.
Gains said 60% of the group's business was in support and construction services, with the other 40% in traditional contracting.
He said construction margins remained the same as the previous year, at 1.8%. The margin in the services sector was 3.8%.
Gains said: "There has been a significant strategy change. Now, we're a well-balanced business with services and construction.
Kier's pre-tax profit for the six months to 31 December 2001 was £2m higher than in 2000, at £9.4m, because of better margins.
Busby said construction margins had risen from 0.7% to 0.9%.
He added: "Both housing and construction are performing well. The increases in margins are healthy."
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