Rebate would enable smaller firms to bid for government contracts, says Institute.

The Royal Institute of Chartered Surveyors (RICS) says that the government should pay back the bidding costs for firms listed for PFI contracts. It says that by doing so it would enable smaller firms to compete against the industry heavyweights that dominate the PFI sector.

RICS says that the high costs of launching a bid, which can be as much as £10 million, inhibit potential contractors from tendering, which: “means the client and, indirectly, the public are not getting best value from the full market of ideas and talent.

PFI schemes accounted for 30% of total government investment in 2003/04. Despite criticism from some quarters, RICS says opposition is “anachronistic and pointless”.

RICS chief executive, Louis Armstrong, said: “It is quite clear that PFI is here to stay and is rapidly becoming the only show in town for large-scale investment in public services.”

The report, Quantifying Quality, also recommends that standard forms for PFI cost reports and Whole Life Cycle Cost be established.