Summary

1  The Private Finance Initiative (PFI) is being used to procure many projects involving construction of assets which are needed to deliver public services. Up to December 2002 PFI contracts had been let for 25 major hospital schemes, seven prisons, nine roads and a number of other projects such as departmental office accommodation and training facilities. The Office of Government Commerce (OGC) has central responsibility for promoting good practice in public sector construction projects. It is also responsible for the central development of PFI policy. These two areas overlap in those projects where a service procured under the PFI requires the construction of an asset, such as a road or building.

2  This report examines the construction performance achieved in PFI projects so far. It focuses on three key areas of construction: price certainty for departments; timing of construction delivery; and the quality of design and construction. To gather evidence on experience to date we carried out a census of all English PFI construction projects let by central government,1 which were due to have been completed by Summer 2002. The methodology we adopted for this study is set out in Appendix 1. In summary:

■  we tested the hypothesis that PFI will deliver price certainty for departments and timely delivery of good quality assets;

■  our census of projects generally supported the hypothesis, though it is not possible to judge whether these projects could have achieved these results using a different procurement route.

___________________________________________________________________________________

1  This includes all completed NHS hospitals for which contracts are let locally by NHS Trusts, but not schools contracts, which are let through local authorities.