Two of the government’s largest estates are undergoing radical shake ups, which is delaying the awarding of contracts. The Ministry of Defence’s move to bring on board a private sector partner to manage its estate is the “key reason” for placing the procurement of up to £5bn worth of construction contracts on hold, Building reported.
The MoD’s property arm, the Defence Infrastructure Organisation (DIO), has placed its entire New Generation Estate Contract (NGEC) procurement “under review”, meaning no contracts will be let this year. A source told the magazine said the delay had been prompted by the organisation’s decision to bring a private sector partner in to manage the defence estate, worth nearly £20bn and including about 4,000 sites. Firms in the frame to run the estate include big names such as Serco, Capita Symonds, Babcock and Sodexo.
The Department of Health meanwhile is planning to set up a new property company to manage the NHS primary care trust estate, reported Construction News. This will take over buildings such as community hospitals and offices once the Primary Care Trusts are shut down. They are due to be abolished in 2013.
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