Most construction work under the Private Finance Initiative (PFI) is being delivered on time and at the cost expected by the public sector. Central government has generally obtained a much higher degree of price certainty and timely delivery of good quality built assets, compared to previous conventional government building projects, Sir John Bourn, Head of the National Audit Office, reported to Parliament today.
Data produced by the NAO, the first independent analysis of construction progress on central government PFI projects, showed that:
Only two of the PFI building projects, due to be completed by summer 2002, were unfinished at the time of the census, and the construction of one of those has since been completed. The National Physical Laboratory at Teddington is the only project which is still yet to be completed. Where PFI buildings have been delivered late, departments have been able to defer payments or seek financial damages.
The NAO also found that most public sector project managers surveyed were satisfied with the design and construction, and performance of their PFI buildings. However, it was difficult to get a view of user satisfaction as only four of the projects surveyed had conducted formal user surveys although where surveys had been carried out they were generally positive. The NAO recommend that the government should make greater use of user surveys in future.
The NAO also says that it is not possible to judge whether the generally favourable construction performance shown by the PFI projects it surveyed could have been achieved using other procurement methods. It recommends that departments should assess the extent to which the improved construction performance in PFI projects could be achieved in traditionally procured projects.