'PFI can be simpler and better value for money'

While admitting that much of the recent criticism lobbed at the UK's PFI programme has been politically motivated, Balfour Beatty's Anthony Rabin recognised the procurement framework can be improved.

Anthony Rabin, deputy chief executive of UK developer Balfour Beatty, said at the start of the second day of Infrastructure Investor Berlin 2012 that there is room to improve the UK's Private Finance Initiative (PFI), but found that most of the recent criticism aimed at the procurement framework has been politically motivated.

“PFI has been branded a national disgrace in the UK,” the Balfour Beatty boss said, referring to a barrage of negative attention that has plagued the procurement framework over the last year. PFI is the UK's standardised procurement process for public-private partnerships.

Rabin attributed most of the recent criticism directed at PFI to a new government “anxious to differentiate itself from its predecessor,” pointing out that the discussion around PFI's strengths and weaknesses has been superficial and lacked any comparative public sector data.

Still, Rabin recognised there is plenty of room for improvement, especially when it comes to PFI's complexity and procurement costs, its value for money and lack of flexibility.

Rabin said PFI procurement is overly time consuming and costly and suggested better preparation on the part of procurement authorities could help streamline the process. Risk transfer is another area in need of improvement, with the Balfour Beatty deputy chief executive arguing that transferring the wrong risks to the private sector can jeopardise a project's value for money.

But Rabin also urged the private sector to be more open when it comes to “flexibility of provision,” although he recognised “flexibility” would have to be introduced at the onset of procuring a project. “[The private sector] can't just be expected to tackle this once things are built,” he warned.