Skye probe prompts bidding row

The National Audit Office has called for more competitive bidding and better inspection of advisors' costs in Private Finance Initiative schemes, after months of investigation into the controversial Skye Bridge.

The NAO report on the bridge was published last week. It recognised that a crossing to the Isle of Skye was needed to solve problems of traffic congestion and delays to the old ferry service. The NAO said the project met the goal of improving traffic flow, but criticised the Scottish Office for not investigating alternative options, such as upgrading the existing ferry service.

Skye Bridge opened in October 1995 as the first PFI deal, and it has been surrounded by controversy. Local people oppose the level of toll charges and claim that the bridge operator has an unfair monopoly. The ferry service was stopped as part of the PFI deal. Both the Labour Party and Highland Council want to find alternatives to the tolls (CJ 5 February).

Toll charges to users are, in real terms, no higher than the former ferry fares, says the report. However, it says that they are higher than the much longer Severn and Dartford bridges.

The NAO believes that the bridge may have cost too much because the contract was negotiated rather than competitively bid, resulting in extra financing costs. Two bids were received for the scheme. The Scottish Office named Miller-Dywidag as preferred bidder in April 1991 and gave itself no safety net should negotiation stall.

Based on the findings, the NAO recommends that PFI bids should be subject to competitive pressure on all project and financing costs. It wants to see financial comparisons between private and publicly funded options.