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DBFO test for private cash
00:00 18 Aug 1994
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The first four design, build, finance and operate (DBFO) road
schemes - soon to be let by the Department of Transport - have been
designed to provide essential feedback on the success of private
finance for different types of work.
In an exclusive briefing with Contract Journal, a Treasury official has revealed that a cross section of project types will make up the first schemes for tender. The pilot schemes - due to be announced in the autumn - include:
l a high cost project
l a scheme that is virtually all maintenance, with little new work
l the widening of an existing road
l building a new road on a greenfield site.
By awarding different types of contract, the DoT and the Treasury are confident that it will learn important information about how the private finance inititive can most benefit road work.
The Treasury is developing PFI in several areas now, with three sectors making the biggest progress - transport, prisons and the health sector.
The Treasury official said: 'The purpose of the PFI is to achieve more and better projects. They will be better because the private sector is involved right from the design stage. Government is withdrawing from the design phase because there are so many good ideas out there in the private sector.
'And because projects will probably be done more cheaply, there will be more of them.'
In all, Government departments have started around 130 major PFI schemes - each one costing over œ5 million.
But the problem area is proving to be schemes in the œ20-œ40 million band. Bigger projects get the go-ahead thanks to their political push, while smaller ones come to fruition as a result of their simplicity.
The gap is the middle ground. The Treasury official explained: 'These schemes are complex, but not big enough to carry any political clout. We will be giving this area a push. We want examples to serve as beacons.'
In early October, Government departments will publish lists of 'do-able' PFI projects - those that don't look like toeing the line will find the Treasury forcing their hand by publishing a list for them.
In an exclusive briefing with Contract Journal, a Treasury official has revealed that a cross section of project types will make up the first schemes for tender. The pilot schemes - due to be announced in the autumn - include:
l a high cost project
l a scheme that is virtually all maintenance, with little new work
l the widening of an existing road
l building a new road on a greenfield site.
By awarding different types of contract, the DoT and the Treasury are confident that it will learn important information about how the private finance inititive can most benefit road work.
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The Treasury is developing PFI in several areas now, with three sectors making the biggest progress - transport, prisons and the health sector.
The Treasury official said: 'The purpose of the PFI is to achieve more and better projects. They will be better because the private sector is involved right from the design stage. Government is withdrawing from the design phase because there are so many good ideas out there in the private sector.
'And because projects will probably be done more cheaply, there will be more of them.'
In all, Government departments have started around 130 major PFI schemes - each one costing over œ5 million.
But the problem area is proving to be schemes in the œ20-œ40 million band. Bigger projects get the go-ahead thanks to their political push, while smaller ones come to fruition as a result of their simplicity.
The gap is the middle ground. The Treasury official explained: 'These schemes are complex, but not big enough to carry any political clout. We will be giving this area a push. We want examples to serve as beacons.'
In early October, Government departments will publish lists of 'do-able' PFI projects - those that don't look like toeing the line will find the Treasury forcing their hand by publishing a list for them.
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