Draft reforms threaten greater PFI complexity

26 July 2000
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27 July 2000 | Cathy Hayward

The long-awaited draft reforms of the European public procurement rules will make private finance initiative (PFI) projects more complex, according to a legal expert.

"The changes make the system needlessly complex and this will impact on the supply industry," said Bill Bullivant, a PFI specialist at Birmingham law firm DLA.

"The European Commission has failed to take the opportunity to iron out a number of existing anomalies and has imposed yet further restrictions and controls instead," he added. "It seems that we are on the verge of misery for many buyers and suppliers."

The changes by the European Commission, which aimed to make the rules simpler, will force PFI projects to use new procedures.

Under the existing rules, PFI project managers can use the competitive form of the negotiated procedure if they cannot give detailed specifications in advance.

With the proposed amendments, complicated projects will be required to use competitive dialogue procedures, which require advance specifications, are less flexible and are subject to greater regulation.

Industry representatives called for greater flexibility, simplification and clarification after the EC issued a green paper on the subject in 1996.

But other aspects of the reforms have been welcomed. The draft legislation allows utilities to move outside the scope of European directives if they can argue they are in a truly competitive market. This will encourage greater competition, said Fred Harvey, chairman of the Europe in Public Procurement Group and a member of the CIPS European directives committee.

It has also addressed e-commerce. "We are pleased about this," said John Colling, head of procurement policy at the Office of Government Commerce. "It will make the whole procurement system more flexible."


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