Private sector project management and other issues

32  We followed up with project teams responding to the survey on reasons for delays to gain a more detailed clarification of why they had arisen. Figure 5 sets out, for all delayed projects, including those incomplete at the time of the survey, the most important reason project teams highlighted for their delays. Many projects did, however, report a range of reasons for the overall delays.

33  Private sector project management issues were the most often stated reason for delays by public sector PFI project managers. Issues relating to project management which were at the private sector's risk accounted for 42 per cent of delayed projects. This includes issues such as contractors under-resourcing, poor management of subcontractors, lengthy negotiations with third parties and general poor performance. In some cases, project managers could not tell us exactly what the issue had been, but said there had been problems with project management which was a private sector risk.

34  Private sector project management failure is not unique to PFI, as a project manager from a non-PFI project we interviewed described: "We were fairly sure that it was going to overrun, but the information we were getting from the contractors was 'no, no we'll pull time back, we'll pull time back'. And it didn't and then it became a big rush at the end for them to complete things and they weren't completed to a standard that we were prepared to accept".

35  Other causes of delay arose from risks retained by the private sector, and risks retained by the public sector. The contract sets out which party manages each risk and pays for the subsequent delay of such a risk arising. The private sector retained risks causing delays included bad weather conditions, subcontractor financial failure and fire. Risks retained by the public sector that caused delays included problems with the purchase of land and discovery of asbestos.

36  Less commonly stated reasons for delay were issues in obtaining planning permission, public sector initiated changes, and disputes which held up completion dates. These disputes were about interpretation of the contract.

37  Detailed clarification was sought from the 17 completed projects experiencing more than six months of delay. As well as the delays caused by Jarvis's difficulties, private sector project management was again stated as the most common cause of major delay in these cases (Figure 6). Other reasons were in line with the reasons for delays in the sample as a whole.

38  In addition to the 17 projects more than six months late, two waste projects remained incomplete at the time of the survey completion, both of which had been held up by issues in obtaining planning permission. Service delivery was reported to be continuing at existing facilities, though the expected benefits of the new facilities, such as the ability to recycle a greater range of waste, had yet to be realised. Planning permission can often be a problem for waste projects, and this is not PFI specific.