Industry warns proposed rule changes may deter contractors from PFI and inflate costs

Contractors may turn away from bidding for PFI work as a result of proposed rule changes that could force them to release commercially sensitive information to the public, industry leaders have warned.

Proposals put forward yesterday by government watchdog the Public Accounts Committee recommended making contractors answerable to freedom of information requests on PFI schemes. Industry figures have warned that the proposals, which could force companies to disclose the profit they make on schemes, could push up costs and lead to fewer companies willing to bid for PFI projects.

Margaret Hodge, chair of the Public Accounts Committee, said: 鈥淲e have seen information that strongly suggests that investors are making excessive profits from selling on shares in PFI projects. However, the government lacks sufficient information on the returns made by investors, who have been able to hide behind commercial confidentiality.

锘縔ou won鈥檛 give up sensitive data, if only a minority of your work is for the public sector

Alasdair Reisner, CECA

鈥淭he government should extend freedom of information to private companies providing public services and should introduce arrangements for sharing equity gains.鈥�

However, Alasdair Reisner, director of external affairs at the Civil Engineering Contractors Association, said: 鈥淭here are things that must remain commercially restricted. You鈥檙e not going to give up sensitive information, if only a minority of your work is for the public sector.

鈥淚f companies lose their competitive advantage by working on PFI projects, they are going to be reluctant to bid for those projects in the first place.鈥�

One chief executive of a major contractor said: 鈥淲hat will happen in practice is that if it鈥檚 a real administrative burden and extra cost, then it鈥檒l just go on the cost of the project.鈥�

Jonathan Hook, global engineering and construction leader at PwC, defended private industry鈥檚 right to profit from well-run projects.

鈥淚t sounds like there is an assumption that if someone makes money off a PFI investment, then they鈥檝e benefited at the tax payers鈥� expense, which isn鈥檛 the case. They鈥檝e taken on a risk and delivered a project. Why shouldn鈥檛 the private sector deliver those skills for a return on their investment?鈥�

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