ºÃÉ«ÏÈÉúTV

Mowlem is set to complete a £35m PFI deal to improve seven Leeds schools next week after more than a year of delay.

Leeds council chiefs said in July last year that they would be working exclusively with Mowlem to iron out the deal that would "culminate in the signing of a legally binding contract this autumn [2000]".

Now, more than 14 months on, Leeds council has said the 29-year contract to maintain and improve the schools should be approved next week.

It also said that as negotiations on the contracts are so far advanced, work has already started on site at all the schools to ensure that the handover dates, beginning summer 2002, are met.

Last month Mowlem chief executive John Gains hit out at the rising cost of closing PFI deals after the group announced increased spending on the projects.

Gains said Mowlem had spent £8.2m on PFI projects for the six months ending 30 June, of which £2.5m was spent on bid costs. He also criticised the time it took to iron out the deals.

A Mowlem insider said the deals had taken a lot longer than was originally expected, and that it had become very frustrating.

Agreeing a 29-year contract is a mammoth undertaking

Brian Walker, Leeds council

There are growing concerns in the industry about the levels of bid costs for PFI projects and the time it takes to close the deals. Most contractors involved in PFI deals this year reported higher bid costs than last year and these are expected to climb further.

Leeds council's executive board gave the go-ahead for the schools' advance building work this week. Council leader Brian Walker said the end was in sight for what must be the biggest and most involved contract negotiation the council has ever conducted.

He said: "Agreeing a 29-year contract is a mammoth undertaking and I must confess it has taken longer than we had expected. However, the work is on schedule [despite the contract not being signed yet]."

The PFI scheme involves seven schools – five primary and two secondary – all of which will remain fully operational throughout the build programme.

The schools to be improved include Hill Top, New Morley, Oakwood Primary School, Spring Bank, Upper Wortley and Lawnswood. Roundhay School is the largest of the projects and will be rebuilt on the site of existing buildings.