Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

PFI SAVINGS OVERESTIMATED - PARLIAMENTARY REPORT ON ROADS

  • Comment
A report published by the commons public accounts committee says two of the first four road schemes built under the...
A report published by the commons public accounts committee says two of the first four road schemes built under the private finance initiative should have been built by traditional procurement methods and at£15m less.

Contract Journal (p2) reports that the PAC report confirmed National Audit Office findings published in January, that the Highways Agency had overestimated the savings PFI could give by nearly£70m - or about 40% of the original estimated savings of£169m.

It claims that questions over the choice of discount rate to assess the Net Present Value of schemes are at the root of value-for-money questions.

David Davis, chairman of the PAC, criticised the PFI work and the report says that the Highways Agency 'confused risk creation with risk transfer' by using the shadow toll payment system instead, paying only for road availability.

The PAC also claims the agency was 'on dangerous ground' by running pre-qualification rounds then ignoring some of the bidders. Davis said: 'We remain puzzled at the rationale for the choice of bidders for each scheme.'
  • Comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.