PFI firms eye stalled colleges
09:10 01 Jul 2009
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PFI players are in discussions with the Treasury and the Learning and Skills Council (LSC) to deliver “a proportion” of the delayed college schemes that failed to get a funding kickstart.
Last week, the LSC said just 13 projects would get funding but even these would be asked to make “significant but manageable” cost cuts.
Meanwhile, the remainder will stay on hold and will not receive any further investment until 2011/12.
A source close to the LSC told CJ it had had approaches from three contractors, developers and fund managers who were “very interested” in pursuing a PPP model for the rest.
The concept could see several schemes bundled into packages, or larger schemes stripped out to make them attractive to PPP players.
PricewaterhouseCoopers is understood to be producing a feasability study on the idea shortly, before it is put out for further discussion with colleges and interested players.
The plan offers a glimmer of good news after an announcement that is set to put a multi-million pound dent in contractors’ orderbooks and put thousands of workers’ jobs at risk.
A source at a contractor which had seen its job stay on hold said: “There are going to be job losses, not just with main contractors but with the rest of the supply chain. Some firms are really exposed to this. We’ve already seen the problems the delay to the £100m St Albans College job caused Verry. We’re waiting to see now if this thing claims any more scalps.”
Dave Smith, chief operating officer for Wates Construction, which saw its Leyton college project make the list, said: “This is a missed opportunity to make a huge impact as the UK construction industry can do an awful lot in these difficult times. Directing money into the right places would provide a massive boost for the UK economy.”
One subcontractor said: “This is a costly mess. On average each one of these projects would have employed 200 people for two years.”
The lucky 13 college schemes
- Barnsley College - Miller Construction (£55m)
- Bournville College - St Modwen (£74m)
- Furness College - shortlist of Eric Wright and Norwest Holst (£46m)
- Hartlepool College of Further Education - Miller Construction (£61m)
- Kirklees College - Allenbuild (£90m)
- Leyton Sixth Form College - Wates (£46m)
- Manchester College, Wythenshawe - ISG Regions (£28m)
- North West Kent College - BAM Construct (£84m)
- St Helens College - BAM Construct (£50m)
- Sandwell College - Interserve (£77m)
- South Thames College - BAM Construct (£29m)
- Tresham Institute of Further and Higher Education - BAM Construct vs. Miller (£39m)
- West Cheshire College - BAM Construct (£73m)