Modus, the consortium running the deal, comprises Amey, Laing and PFI funder Innisfree, with a Skanska-led team handling construction.
The audit office recommendations come a week after Building revealed the government’s efforts to speed up PFI deals. These include guidance from the Department of Health intended to cut the minimum number of consortiums shortlisted for hospitals and the subsidisation of contractors’ bidding costs.
Report says senior officials must be committed to success
The report concludes that although the cost of the MoD’s PFI deal would have been similar if other procurement routes had been used, other factors tipped the balance in favour of PFI. These included a fixed price and incentives for Modus to complete the project on time. The report states: “A benefit of the PFI as a form of procurement is an appropriate division of risk between itself and its private sector contractor.”