The Government has caved in to demands for simpler procedures to ease negotiations which are holding up projects funded through the Private Finance Initiative.
In a long-awaited policy switch, which until now has treated each PFI project as ‘an individual scheme with its own special requirements’, the Government will issue standard contract terms next month to speed up the time spent negotiating deals.
The Confederation of British Industry called on Michael Jack, Financial Secretary to the Treasury, in July to cut the cost of bidding for PFI projects. Several large contractors and advisory firms, including construction company John Laing and advisers Chestertons, have complained that lengthy negotiations have dramatically increased the cost of bidding for PFI work.
The PFI panel, which oversees the scheme, is expected to issue a series of guidance papers by the end of the year. Their aim is to solve problems experienced particularly in the health and local authority sectors.