Industry warns proposed rule changes may deter contractors from PFI and inflate costs

Contractors may turn away from bidding for PFI work as a result of proposed rule changes that could force them to release commercially sensitive information to the public, industry leaders have warned.

Proposals put forward yesterday by government watchdog the Public Accounts Committee recommended making contractors answerable to freedom of information requests on PFI schemes. Industry figures have warned that the proposals, which could force companies to disclose the profit they make on schemes, could push up costs and lead to fewer companies willing to bid for PFI projects.

Margaret Hodge, chair of the Public Accounts Committee, said: “We have seen information that strongly suggests that investors are making excessive profits from selling on shares in PFI projects. However, the government lacks sufficient information on the returns made by investors, who have been able to hide behind commercial confidentiality.

You won’t give up sensitive data, if only a minority of your work is for the public sector

Alasdair Reisner, CECA

“The government should extend freedom of information to private companies providing public services and should introduce arrangements for sharing equity gains.”

However, Alasdair Reisner, director of external affairs at the Civil Engineering Contractors Association, said: “There are things that must remain commercially restricted. You’re not going to give up sensitive information, if only a minority of your work is for the public sector.

“If companies lose their competitive advantage by working on PFI projects, they are going to be reluctant to bid for those projects in the first place.”

One chief executive of a major contractor said: “What will happen in practice is that if it’s a real administrative burden and extra cost, then it’ll just go on the cost of the project.”

Jonathan Hook, global engineering and construction leader at PwC, defended private industry’s right to profit from well-run projects.

“It sounds like there is an assumption that if someone makes money off a PFI investment, then they’ve benefited at the tax payers’ expense, which isn’t the case. They’ve taken on a risk and delivered a project. Why shouldn’t the private sector deliver those skills for a return on their investment?”