Contractors should be forced to disclose their profits on PFI schemes, an influential parliamentary committee has said.
But industry leaders warned the plans could push up costs and deter companies from bidding for PFI projects, Building reported.
A critical report from the Public Accounts Committee said that private investors are making excessive profits and using off-shore accounts to avoid tax. The report has called for HM Treasury to employ freedom of information powers to investigate, Construction News reported.
Margaret Hodge, chair of the Public Accounts Committee, said: “We have seen information that strongly suggests that investors are making excessive profits from selling on shares in PFI projects. However, the government lacks sufficient information on the returns made by investors, who have been able to hide behind commercial confidentiality.
“The government should extend freedom of information to private companies providing public services and should introduce arrangements for sharing equity gains.”
The industry responded that the disclosure of commercially sensitive information would deter companies for bidding for projects. Alasdair Reisner, director of external affairs at the Civil Engineering Contractors Association, said: “If companies lose their competitive advantage by working on PFI projects, they are going to be reluctant to bid for those projects in the first place.”
Jonathan Hook, global engineering and construction leader at PwC, defended private industry’s right to profit from well-run projects.
“It sounds like there is an assumption that if someone makes money off a PFI investment, then they’ve benefited at the tax payers’ expense, which isn’t the case. They’ve taken on a risk and delivered a project. Why shouldn’t the private sector deliver those skills for a return on their investment?”
The report says the government has treated PFI as the “only game in town”, but that it has been based on inadequate comparisons with conventional procurement which have not been sufficiently challenged. It comes just two weeks after the Treasury Select Committee criticised PFI as inefficient and poor value.
Hodge said: “While PFI has delivered many new public buildings and services that might not otherwise have been built, it is far from clear that it has provided value for money.”
