7. This was one of the earliest PFI projects on this scale in Northern Ireland. Consequently, the project team established in 1997 by DVTA to oversee its procurement did not have the benefit of the extensive good practice guidance developed more recently. In addition, the project was innovative and complex in nature, primarily because the preferred bidder's vehicle testing process and methodologies had not been proven, or tested, in a live environment (paragraphs 2.1 and 2.2).
8. Although the contractors completed the phased installation of all test centres by September 2003, this required two centres to be closed at any one time, with testing capacity reduced accordingly. A number of factors external to the project also impinged upon performance in delivering vehicle testing services, including initiatives aimed at addressing road safety and motor tax evasion. These caused an increase of 20,300 vehicle test applications (10.5 per cent) in the five-month period between May and September 2003, compared with increases of 8,000 applications (4 percent) for the corresponding period in previous years. Furthermore, the participation of DVTA staff in a Civil Service-wide strike during 2004 resulted in the cancellation of almost 100,000 test appointments (paragraphs 2.3 and 2.4).
9. DVTA has consistently been unable to achieve the key performance indicators specified in the contract, and average vehicle test times have been 23 minutes, five minutes above the 18-minute PFI target, despite the fact that full testing of all items was not introduced until March 2006. Average waiting times for customers rose from 20 calendar days in 2002-03 to 55 calendar days in 2004-05 (paragraphs 2.5 to 2.7).
10. DVTA introduced remedial measures between 2002-03 and 2004-05. These succeeded in minimising waiting times and helped DVTA achieve its formal business target in this regard in 2002-03. However, they were less successful in 2003-04 and 2004-05, and a decision to use 'flexible' examiners solely on vehicle tests resulted in an increase in driving test waiting times to 32 calendar days, against a key performance target of 23 days (paragraphs 2.8 and 2.9).
11. As DVTA's bonus scheme pre-dates MOT2, there are no arrangements for applying deductions to bonus when the contract test times are not achieved. In our view, it is essential that a more broadly based bonus scheme currently being developed by DVTA provides a more direct incentive for staff to optimise productivity (paragraphs 2.12 to 2.15).
12. Because DVTA had to respond to increased waiting times by introducing measures including additional overtime, it incurred extra costs, partly as a result of its problems with the MOT2 contract. Actual overtime costs from 2002-03 to 2004-05 exceeded DVTA's business plan forecasts by a total of £1.8 million. However, we estimate that the full overtime costs arising from the inability to achieve the 18 minute-test between 2002-03 and 2004-05, could be in the region of £2 million. In addition, extended-day working costs between 2002-03 and 2004-05 were £269,000 greater than business plan forecasts (paragraphs 2.16 to 2.18).
13. In its full business case for the PFI project, DVTA estimated that fees would increase to £23 for a car/light goods vehicle test and £35.63 for an HGV test. However, customers have been paying between an additional £0.70 and £2.50 for a car/ light goods vehicle test since the introduction of the new equipment, and the total additional cost to DVTA customers between 2002-03 and 2004-05 amounts to over £3.2 million. Nevertheless, vehicle test fees in Northern Ireland compare favourably with the current fees charged in Great Britain (paragraphs 2.19 to 2.22).
14. DVTA's decision to procure new test equipment was influenced by EU requirements, and bidders for the PFI contract were required to demonstrate that their testing solutions met all these standards. Although installation of the new equipment was completed in September 2003, DVTA did not commence full testing to EU standards until March 2006 (paragraphs 2.23 and 2.24).
15. The lengthy waiting times for vehicle tests which resulted from the industrial action had a major impact on DVTA's customers, with many motorists unable to use their vehicles legally, in the absence of a valid MOT certificate. To address this situation, in August 2004, DVTA introduced certificates of temporary exemption. DVTA issued some 520,000 of these certificates by December 2005, and envisages that their use is likely to continue until March 2006 (paragraphs 2.29 and 2.30).