Anderson slams PFI 'rule'

European Union rules on competitive tendering allow for selective negotiations in privately financed schemes, said David Anderson, md Wimpey Construction in London last week. He criticised the Treasury for insisting on full tendering competition and said Government departments should be encouraged to adopt a more flexible process to facilitate faster progress with the Private Finance Initiative.

Anderson said: 'The competitive bidding process creates waste, more Government departments should be encouraged to selectively negotiate schemes.'

Within the Treasury, the main stumbling block is seen to be the Private Finance Unit - the Central Unit of Procurement, its sister department, already being in line with Anderson's thinking.

Government must find a means of reducing the enormous waste incurred by those bidding for PFI projects, he insisted, as the current process is extremely expensive. Anderson called for unsuccessful PFI consortia to be reimbursed for their bidding costs.

Anderson knew risk must be transferred, but the risk contained in the conditions of the concession agreements Government is trying to impose in road and prison schemes is unacceptable. 'Government and Treasury need to come to terms with this,' he said.

Wimpey has set up a separate company, Wimpey Construction Investments, to manage a future tradeable investment portfolio. It sees PFI as an opportunity to get into a market which spins off construction work on reasonable terms.

Anderson's misgivings stem from reports that in the health sector only a small portion of the œ1.5 billion flagged up as potential construction work is likely to go down the PFI route.

PFI has always been legally controversial. Only last week CJ carried a warning by London solicitor Wilde Sapte that litigation could arise in some projects through alleged breaches of the tendering process, as aggrieved tenderers, having spent large sums on their bids, seek either an injunction to stop the tender process or the award of damages.