Scrap private finance panel and bring in FM firms to cut costs says boss - PFIprocess needs shake-up

Facilities management contractors must be brought in at the briefing stage on Private Finance Initiative projects to minimise operational costs, warned a leading FM director this week.

Phil Russell, md of Turner and Townsend Facilities Management, called on PFI consortia to give more consideration to the long-term service needs of the project and involve FM contractors at the design stage.

At the PFI seminar Russell also called on the new Government to make a number of radical changes to the PFI process. Top of his wish list is the abolition of the PFI Panel which he accused of complicating the PFI process in order to justify its existence.

"It's the facilities management contractors who take the majority of risk in PFI schemes," said Russell.

"Service contracts of 25 to 30 years should therefore place the right emphasis on design specifications for long-term operation to minimise operational costs," he added.

Russell said there is still a short-term view being taken by many PFI consortia with the FM input bolted on at the end.

"FM contractors must be brought in at the front-end to advise on design and not just bolted on at the end, since it is the FM contractor that must run the scheme for 20 to 30 years and pick up all the costs," he said.

"We are already working with consortia that pay us an advance on our fee to get involved early on in the design process. But there are PFI consortia that do not yet recognise the importance of this."

Russell also called for a dedicated PFI Task Force at the Treasury. "It's clear the log jam is caused by the Treasury's past reluctance to give final approval, although this is often because the schemes were never viable from the outset.

"The Government should spend more time looking at business cases before wasting the private sector's time."