£16bn wasted in tendering for projects
publication date: Oct 2, 2005
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author/source: R Taylor
Research from the Major Contractors Group (MCG) has highlighted the huge cost of bidding for PPP/PFI projects. The MCG estimate the average cost is £4m per project, and by multiplying this by the 4000+ PPP/PFI projects currently in development adds up to £16b, almost 38% of the £42.5b being invested!
Possibly the only positive thing in the report was that the average cost for bidding for school projects has fallen from £3.2m in 2003 to £2.4m in 2005 (down 22%). In theory, the Building Schools for the Future programme will not be plagued by similar problems because its Local Educational Partnership (LEP) model can include up to 100 schools rather than just one, as is the case with many PPP/PFI projects.