The National Audit Office has recommended separating the financing of future PFI projects from the property elements.
The independent audit body said in a report published today that money could be saved by tendering the financing for the projects to financial institutions.
The recommendation follows the success of the Treasury’s 1996 PFI deal with Exchequer Partnership, made up of Bovis Lend Lease Holdings, Stanhope and Chesterton, to refurbish its Great George Street building, SW1. The financing for the scheme, worth £140m, was hived off as a separate competition.
In total the Treasury said it saved £13m, or 7% of the project cost, over its 35-year life by taking this approach.
The NAO said: “Additional value can be generated by procuring the project funding in this way.”
EGi News 09/11/01
