The number of bidders for PFI schemes will drop because of falls in the share price of contractors and the introduction of tougher accounting standards for bid costs, according to a report published this week.
Just under 90% of respondents to the International Project Finance Association's PFI survey said there was less interest in PFI work.

Industry fears centre on the fact that PFI firms must account for bid costs earlier than before and will be less able to obtain credit because of declines in their share prices.

IPFA director Richard Kenton said the survey results showed that the government ought to act. Kenton said: "The private sector believes that more needs to be done to lower bidding costs, which continue to be a burning issue for the market, especially when design costs are added."

The survey, which canvassed views from 223 PFI funders, contractors and advisers, also found that respondents were worried about union opposition to PFI 鈥� 65% said that unions would continue to be an issue for PFI next year. More than four out of five thought the role of government PFI adviser Partnerships UK was ill defined. In addition, the survey found that 97% had been asked to pay larger insurance premiums.

Concern over bid costs was underlined by the lack of market interest in a 拢254m hospital scheme in Staffordshire. Only three bidders 鈥� Sir Robert McAlpine, Carillion and Laing 鈥� expressed interest in building the teaching hospital in Stoke. It is now understood that Carillion has withdrawn.

More needs to be done, as bidding cost continues to be a burning issue

IPFA director Richard Kenton

n Ken Livingstone is expected to decide next week whether to launch a fresh legal challenge to the 拢16bn Tube public鈥損rivate partnership deal.

The London mayor received the European Commission's written judgment backing the scheme last Friday. A spokesman at the mayor's office said: "We are now considering whether to take action. We are taking legal advice. I expect a decision on this within days."

A source at London Underground said Livingstone would be taking a considerable risk if he pressed ahead with action.