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Gleeson bid costs hit £1.5m for pathfinder
11:01 05 Dec 2002
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Gleeson's bid costs for the £75m Plymouth Grove social housing
PFI scheme in Manchester have reached £1.5m - but the firm is
confident of closing the deal within the next two months.
The scheme was the first of the eight social housing pathfinder PFIs to reach preferred bidder stage in January. Gleeson is leading a consortium that also includes the Harvest Housing Group, Powerminster and Nationwide.
"It hasn't helped us that this is the first of the pathfinders, and there has been no legal model to work from," said Gleeson Regeneration managing director Noel Adams. "It's meant our costs have been higher than expected."
But he added that the firm was "very close" to reaching commercial close with the client, Manchester City Council. Adams, whose regeneration division will be responsible for progressing the scheme, is confident the deal will be completed "in December or January".
He added that the expenses incurred in the bid process had been built into Gleeson's overall cost model for the project, and that the Plymouth Grove experience should help Gleeson when it bids for future social housing PFIs.
"Once we have got the legal model finalised, we will be able to use that on other PFI bids," said Adams. "But we won't be bidding for another until Manchester is sorted out."
Gleeson has already started refurbishment works on site in Plymouth Grove, and other contracts will fall into place in the unlikely event of PFI terms not being agreed.
But the refurbishments carried out to date have highlighted what Adams believes is a real concern with social housing PFIs - the absence of PFI credits for new-build developments; at present, they are only available for refurbishments.
"PFI is all linked to output specifications, and it can be very difficult to build modern standards into an old building," he explained. "We feel there have been cases where we could have achieved a better end result by knocking the building down and starting again from scratch."
n See Noel Adams profile, pages 18 to 19.
The scheme was the first of the eight social housing pathfinder PFIs to reach preferred bidder stage in January. Gleeson is leading a consortium that also includes the Harvest Housing Group, Powerminster and Nationwide.
"It hasn't helped us that this is the first of the pathfinders, and there has been no legal model to work from," said Gleeson Regeneration managing director Noel Adams. "It's meant our costs have been higher than expected."
But he added that the firm was "very close" to reaching commercial close with the client, Manchester City Council. Adams, whose regeneration division will be responsible for progressing the scheme, is confident the deal will be completed "in December or January".
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He added that the expenses incurred in the bid process had been built into Gleeson's overall cost model for the project, and that the Plymouth Grove experience should help Gleeson when it bids for future social housing PFIs.
"Once we have got the legal model finalised, we will be able to use that on other PFI bids," said Adams. "But we won't be bidding for another until Manchester is sorted out."
Gleeson has already started refurbishment works on site in Plymouth Grove, and other contracts will fall into place in the unlikely event of PFI terms not being agreed.
But the refurbishments carried out to date have highlighted what Adams believes is a real concern with social housing PFIs - the absence of PFI credits for new-build developments; at present, they are only available for refurbishments.
"PFI is all linked to output specifications, and it can be very difficult to build modern standards into an old building," he explained. "We feel there have been cases where we could have achieved a better end result by knocking the building down and starting again from scratch."
n See Noel Adams profile, pages 18 to 19.
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