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CONTENTS 19.02.09
NewCivilEngineer
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ww.nce.co.uk1 19.02.09 NEWCIVILENGINEER
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05
NEWS
PFI bailout stalls Treasury holds out on cash injections to reseue PFI projects like the M25.
20
COVER STORY Rob Holden
Rob Holden tells NCEwhat ' working on HSl has taught him about major project delivery.
22
GREATEST ADVANCE The finalists
The 10 finalists in the quest to uncover the greatest advance in construction are revealed.
Aisein thisissue
06 News
Latest job culs at Hyder and Atkins
07 News
Crossrailstaff shakeup on cards
08 News
obama's stimulus plan agreed
14 Analvsis
Construction is the Gulf is starting to feel the pinch
16 Letters
Transport, structures, energy, business
AntonyOliver
1 PPAEditorof the Year25 ICENews
NewICEpanel investigates aviation needs
Comment "Potential new PFIschemes still face an uphill struggle to reach financial close"
Don't write off the private finance initiative just ,et
For all the talk about Treasury bail-ours and government intervention to save the private finance initiative (PFI), we should resist the temptation to follow the popular press in condemning it as a proeurement too1.
Without doubt, as Gordon Brown admitted Ibis week, potential new PFI schemes such as the M25 widening and the Manchester waste project still face an uphill struggle to reach fin ancial close.
And as he also admitted, the myriad of existing national and local authority PFI projects do also face previously unforeseen problems associated with cash supply.
But these problems, critical though they are to the success of the PFI deals, do not condemn it as a broken procurement route.
Fundamentally the problems faced by PFI consortia are not different from those of just about every other part of the economy. They revolve firmly around the supply of cash and the willingness ofbanks ta lend.
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But don't forger, the PFI is intended as much more than just a money raising process. Underpinning the successful growth ofPFI over the last decade or so as a vehicle for delivering infrastructure services and projects is risk transfer.
Primarily the PFI is designed to relieve the public sector of risk, and transfer it to those best able to manage il. ln aIl but a few high profile cases we have seen that by doing this the cost of funding the work falls and the greater incentive to boost efficiency delivers ahead of programme and below budget.
Certainly the current financial crisis has introduced some very big challenges to over- corne when it cornes to project finance. But that is not limited to PFI projects.
After aIl, as Crossrail demonstrates, raising the money to gel any major public infrastruc- ture off the ground is no easy task. Il may have Royal Assent, compulsory purchase orders in and contracts let, but the reality is
that legislation is required for a supplemen- tary business tax to bridge the funding gap.
And equally, let's not pretend that this is the first lime we've seen a PFI funding crisis.
Remember the hugely successful privately funded High Speed 1 project? This was almost derailed before it started by overly optimistic traffic projections, and only put back on track by the government agreeing to underwrite a vital bond issue.
Silice then the credit crunch bas changed the project finance game, in that banks are less prepared to lend. So when Brown talks about the Treasury stepping in to help securè PFI infrastructure projects, it is not failure.
On the contrary, just as the government has stepped in to save the car industry, intervention should be seen as recognition that PFI - with ils foeus on risk transfer and
