07 February 2003
The NAO examined 37 PFI building projects, including hospitals, prisons, office accommodation and roads and found 22% experienced cost overruns and 24% were finished late.
The report did not examine if the PFI represented value for money or whether better results could have been achieved by conventional procurement.
However, the NAO says the figures represent a 'dramatic improvement' on the pre-PFI experience. A government benchmarking survey in 1999 found that 73% of government building projects overshot cost cost expectations and 70% were late.
NAO head Sir John Bourn said: 'The theory is that the PFI should incentivise the private sector to deliver good-quality buildings on time and to the price agreed with the public sector. The results show that this is being achieved in central government.'
In the 29 projects that experienced a price increase after the contract was agreed, the NAO found this resulted from the department changing specifications.
However, construction cost increases were borne by the consortiums involved. 'This is evidence of risk transfer working,' the report found.
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