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Spanish slam slow British PFI tendering

British tender processes for privately financed infrastructure take too long, a leading Spanish contractor claimed last week.

British public sector clients fail to define projects in enough detail when putting them out to tender.

This means that negotiations with preferred bidders take much longer than they do in Spain.

The criticisms were made by Ferrovial Infraestructuras corporate development director Enrique Fuentes at a private finance conference in Madrid last week.

Typical British private finance deals can take a year or more to negotiate, but those in Spain can be wrapped up in four months, claimed Fuentes.

They are also more expensive for bidders, as the costs of supporting bids are higher.

He said that bidders in Spain had four months to formulate tenders, followed by four months for preferred bidders to negotiate deals.

Spain does not require projects to have full financing in place when contracts are signed.

This compares with Britain where all aspects of a project, including finance, have to be agreed before contracts are signed, he said.

The Highways Agency is looking at adopting this approach as it attempts to cut the costs of design build finance operate deals ahead of letting the M25 widening project.

One British consultant said that Spain had much longer experience of negotiating private finance deals, having started in the 1960s.

Britain only began its private finance initiative in the 1990s.

Fuentes also said that bidders for Spanish projects had to put up bid bonds equivalent to 4% of the project value, as an incentive to complete deals.

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