Spread the word on PFI

Pfi has handed the client greater control of the procurement process than ever before. But this is a mixed blessing, according to James R Knowles' research for CJ's report, Making the PFI Work (left).

JRKnowles interviewed senior representatives from clients in the road, rail and prisons sectors, and approximately a dozen organisations that act as advisers to Government. The report highlights the absence of procedures from the Treasury and problems arising from flexibility of the negotiated procurement procedure.

Clients' personnel need tuition in the PFI process so that unfamiliarity does not slow down negotiations. A best practice guide - one of the measures recommended in Making the PFI Work - would help client personnel significantly.

JR Knowles found that those clients with a track-record in PFI placed great emphasis on training their staff in PFI related skills. But few clients have accumulated such experience, due to lack of progress in implementing PFI contracts over the past few years.

The research found that clients are keen to see effective dissemination of knowledge: particularly the reasons why, and ways in which, consortia had won their contracts or achieved preferred bidder status.

All the clients surveyed accepted that industry could not look to the Private Finance Panel to do this job: reporting to the Treasury, it does not seem to have dissemination as one of its main objectives.

The Government has stated its intention to provide case precedents. This is a noble gesture, but is thought by many to be inadequate. Tenderers need faster and more detailed feedback.

Two main sector clients felt that industry should be involved, either through a DTI initiative, or through a joint Treasury /industry tribunal. A Government committee on its own might be too restrictive in its release of feedback.

Privately, 75% of clients doubt whether the Government's case studies, its encouragement to de-brief tenderers and the Civil Service College course, are anything like enough to spread existing knowledge.

The survey made it clear that many clients in the road, rail and prisons sectors believe contractors are being forced into PFI. Most clients were anxious to see more third party investors with their own sources of funding and long term plans. Once the construction phase is finished the contractor could then return to its core business of contracting.

In summary, clients felt it was inevitable that there would be "learning pains" from mastering a major new process like PFI. However, clients accepted that the pain, so far, has been too great. They agreed that something must be done to alleviate what has become a significant problem with the PFI process in general.n

Copies of the report are available from Jan Winfield at CJ on Fax: 0181 652 4804, price œ200 (ex VAT)