14

Data used in regressions and possible influences

Variable

Definition

Expected influence on tendering time and costs

Tendering time

months from advertisement of project in the Official Journal of the EU to financial close

Tendering costs

Total cost (£ million) of tendering to the procuring authority (consisting largely of adviser fees)

Project size

£ million capital value

Possible increase in tendering time and cost with higher project size, which may be a measure of complexity as well as scale

Net Present value

£ million discounted at 3.5 per cent to date of financial close

Possible increase in tendering times and cost with higher net present value

Sector

1/0 dummy variables covering 19 'Hospital' PFI projects and seven 'other' projects. All results presented are relative to schools (20 projects). See Appendix 2 for further details of projects.

Time expected to increase with the complexity and heterogeneity of sector though no a priori ranking

Authority experience

The number of previous PFI deals done by the Authority, with three 1/0 dummy variables: one to two deals with the Senior Responsible Officer (SRO) not having done any previous PFI deals, one to two deals with the SRO having done at least one previous PFI deal, three or more deals. All results presented are relative to Authorities with no experience of PFI deals.

Times and costs likely to reduce with public sector experience

Project preparation time

Number of months taken from the decision to begin the substantive work towards Outline Business Case and the date of OJEU notice

Times and costs likely to reduce with greater preparation time

Number of bidders

The number of bidders at invitation to tender (ITN) stage, when authorities ask for the development of viable bids

Might increase tendering time and cost as number of bidders increases. Or small number of bids may reflect difficulties with the project that would lead to increased tendering times and costs

Source: National Audit Office