Accountancy firms miss out on PFI opportunities
Accountancy firms are lagging behind rival professional advisers in the race for work on the Government’s private finance initiative with lawyers and merchant banks winning the lion’s share of business.
Currently, Ernst & Young, Price Waterhouse and Coopers & Lybrand are leading the pack of accounting firms advising public sector bodies negotiating PFI contracts.
But they are failing to win work with the private sector consortia bidding for PFI contracts because law firms and merchant banks are used in the exploratory phase of each project, according to the PFI Intelligence Bulletin.
Top law firms Linklaters & Paines, Herbert Smith and Denton Hall are heading the list of leading PFI advisers with merchant banks Lazard Brothers, Charterhouse bank and Hambros.
‘The accountancy profession has come in later because it is needed later in the process,’ said Adrian Ewers, group finance director at construction company John Laing. ‘There is no point bringing them into the process early because the goal posts move several times before we settle down to negotiate a contract.’
John Laing is involved in several bids for PFI projects, most notably the u170m scheme to build a new Norfolk & Norwich general hospital. Lawyers Herbert Smith and Hambros bank are the lead advisers, which, after two years wrangling, looks set to be the first NHS hospital deal to go ahead.
Richard Haycocks, a manager in E&Y’s PFI unit, conceded accounting firms had been slow to win business with the major contractors bidding for PFI work, but argued that they dominated the public sector, particularly in the health market. ‘The hospital projects have been led by accountants, and we are beginning to win business with the private sector now as well.’
