The risk of delays and cost overruns in public sector infrastructure contracts (compared to PFI/PPP projects) has been continuously exaggerated by UK governments. Claims of 73% of cost overruns and 70% construction delays on traditional public sector projects were trawled around the world to promote the PFI/PPP model. Research concluded, "…the Treasury's claims about the superiority of the PFI is based on time and cost overrun arguments for which there is no evidence" (Pollock et al, 2007). The PFI/PPP track record on cost overruns and delays deteriorated from 22% and 24% of projects respectively to 35% and 31% respectively 2003-2008 (NAO, 2009a). The 11% and 6% differential between PFI and Non-PFI project performance must be considered relative to the significantly higher overall cost of PFI projects and the other flaws. Furthermore, improvements in public sector project management and procurements could achieve significant improvements in performance and reverse the gap.
Table 5: Cost overruns and delays
Performance | PFI 2002 | PFI 2008 | Non-PFI projects 2008 |
Cost overruns | 22% | 35% | 46% |
Construction delayed | 24% | 31% | 37% |
Source: NAO, 2003 and 2009a