5.7 There is evidence to suggest that a number of contractors are not keen on refurbishment schemes for the reasons outlined earlier in terms of risk and return. The work is slow, generally (there is often a requirement to arrange decanting of facilities) and mixes operational facilities with construction areas. Any risk transfer agreed is likely to result in a premium to the tariff to cover the exposure - unknown records and material risks could prove costly and participants price risk accordingly.
5.8 Although PPP can work for refurbished accommodation, it is significantly more difficult to secure better value for money. This is partly due to the resistance of the private sector to take on risk for a building that they were not involved in designing or building. Also many public authorities do not keep detailed records of infrastructure drawings and material components. This makes it much more difficult for the contractor to ascertain the risks involved in the scheme or the changes they may need to bring the building up to normal condition i.e. condition B of the NHS Estates classification categories (sound, operationally safe and exhibits only minor deterioration). This is not only true in cases, for example involving asbestos but where there is considerable M&E work required such as a partial upgrading or a change in function for example outpatients to a ward area.
5.9 In addition, the refurbishment does provide PPP partners with less opportunity for design efficiencies in size, FM delivery or in supporting integration that would normally be possible for a new build development.