Contract management skills warning for PFI specialists

4 July 2001
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05 July 2001 | David Arminas

Public and private-sector contract managers, including purchasers, are entering uncharted waters as they get to grips with maintaining private finance initiative (PFI) contracts of up to 30 years.

Many of the first deals are entering the maintenance stage and contract management skills will be essential to deliver savings to councils, services to the public and profits for building companies, David Finlay, head of PFI at the National Audit Office (NAO), told delegates at a public-private partnerships conference in London.

"It will be a big challenge to develop effective and constructive ways of working together during the contract period, now very much the phase projects are moving into," he said.

Finlay's warning comes as the NAO prepares a major report, due out in the autumn, on the attitudes among private and public-sector participants in PFI projects. "It has canvassed a wide range of views in both public and private sectors, so we are getting both views of PFI," Finlay told SM.

Public-sector staff had developed their negotiating skills for PFI deals, but contract management training would be increasingly important, given the government's enthusiasm for public-private partnerships.

"PFI brings a lot of commercial and finance issues that civil servants have to get to grips with," said Finlay. "Refinancing is an example, because although it is not an unusual concept, it is not a topic civil servants are normally familiar with."

"Part of the challenge for purchasers will be to maintain a long-term, non-adversarial relationship, with no 'pistols at dawn' scenes," said David Pointon, procurement manager at Portsmouth City Council.

Staff with knowledge of the financial and legal aspects of PFI are likely to command premium pay, he added. Portsmouth has embarked on several schemes, including Miltoncross School, a 1,000-pupil secondary school and a 25-year road maintenance contract.

"I have improved the skills of my nine staff by having them shadow me, but the downside is it makes them more marketable," said Pointon.

SMjul2001

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