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EU directive could lead to collapse of PFI

NEWS

THE PRIVATE Finance Initiative will collapse this year unless a proposed European Commission procurement directive can be stopped, major UK contractors warned this week.

Under legislation to stamp out construction sector corruption, which is expected in November, public sector clients will be banned from holding detailed discussions with a single preferred bidder. All bidders will be required to go through detailed design to final selection stages and award of contract.

Bidding costs are expected to increase two to threefold. The financial risk of bidding and losing would be too great for companies to bear, warned Mowlem development director Arthur Moore.

'The PFI would become financially impossible. Government would have to reinvent its entire private finance policy, ' he said.

Growing interest in public private partnerships in Germany, France, Ireland and Holland will support lobbying of the Commission by UK government, trade bodies and individual firms, said Construction Confederation Europe director John Bromley.

To stop the directive it must be opposed by a majority of EU members when voting on whether to implement the directive takes place.

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