Refund PFI costs, says RICS

The government should pay back bidding costs incurred by firms shortlisted for PFI contracts, says a report published by RICS.

The study, Quantifying Quality, says the high cost of bidding for PFI schemes prevents many firms, particularly those at the smaller end of the scale, from entering the market. This means the client and, indirectly, the public are not getting best value from the full market of ideas and talent.

The report states: “There should be payments for a proportion of unsuccessful or abortive tendering costs for shortlisted bidders on Office of Government Commerce, Partnerships UK or other government approved projects.”

RICS chief executive Louis Armstrong said this action was necessary if Britain was to continue to lead the global PFI market. He 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. As interest in PFI mounts across other European countries, the UK has the opportunity to position itself as a global leader in developing productive partnerships between the public and private sectors.”

Other recommendations made by the report include: developing a recognised/chartered PFI qualification; establishing a standard form of PFI cost report; requiring a standard form of whole-life cost; and ensuring that only companies with adequate and appropriate expertise enter PFI contracts.

Since 1996, an average of 12-15% of the UK’s public sector capital investment has been through PFI each year.