Capital Economy, Business and Finance
Investors managing over £32 billion of UK infrastructure assets have called for a “reset” of private finance initiatives (PFI), as an increasing number of contracts end in recriminations and expensive legal disputes. Over 150 PFI projects, including schools, hospitals and defence services, are due to be handed back to the public sector in the next five years, according to the AIIP. For a Labour government that has pledged to use private cash to help fund vital infrastructure, the mishandling of these returns could have a chilling effect on investment. In one egregious example, an official working for the government went around a hospital counting up 900 scuff marks on floors and walls and used them as a basis to withhold payment to the contractor. Disputes that have reached the High Court include a row over defects at Tameside & Glossop NHS Foundation Trust; and another at North Kent Police Station. Lord Hutton, a Labour peer and chair of the AIIP, said continuing down this path could “kill off any realistic chance of a meaningful next phase of social infrastructure in the UK”.
