High return on hospital projects - The Times 2nd September 2007

COMPANIES that run Private Finance Initiative (PFI) hospitals are pocketing margins 20 times higher than in other construction projects. That’s according to research by Jean Shaoul, an academic at Manchester University, which showed returns on investment of 58 per cent, says Public Private Finance (Sept). The Treasury says margins on PFI work should be 8 to 15 per cent. Shaoul studied 12 of the first-wave PFI hospitals and found that trusts’ payments to contractors were on average 20 per cent higher than expected. The Department of Health questioned her sums, saying she had not used conventional methods for the calculations.

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