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£800m goes begging for private finance projects

Investment house Dawnay Day searches for contractors to develop PFI partnerships

AN INVESTMENT house with £800 million to spend on Private Finance Initiative schemes is on the lookout for contractors and developers.

Massimo Marcovecchio, chief executive of Dawnay Day Structured Finance, said he wanted to find partners to help channel cash into PFI projects.

Mr Marcovecchio said: 'We rely heavily on contractors and developers bringing us opportunities. Everyone is talking about cash constraints from banks but we feel there is a lack of projects.'

Dawnay Day is a property and financial services group, which owns more than 700,000 sq m of land across the UK. The group's structured finance division was set up a year ago to invest specifically in the PFI and public-private partnership schemes.

The firm hopes to use a significant part of the land it owns to provide sites for PFI projects and is already working on two schemes in Bournemouth.

Mowlem approached Dawnay to provide finance for a £60 million retail and leisure development in the run-down area of the town surrounding the pier. Bournemouth Borough Council was looking for private partners to regenerate the area and the Dawnay Day/ Mowlem joint venture saw off strong competition from Quintain Estates for the site.

Dawnay Day has also bagged a pathfinder PFI library in the town at its Parkway Plaza site, which Longley will build (see Page 7).

Mr Marcovecchio said: 'If people say 'we have a demand', we will review the project. But the investment decision is a careful one.'

The firm is also keen to build up partnering relationships with contractors to cut down on costs and improve efficiency by sharing profit.

Mr Marcovecchio said: 'You have to incentivise a contractor. It is naive to think that, if you knock £50 off up-front to win a deal, you won't get bitter later.'

And he warned: 'We will not work with organisations that have a reputation for being claims-orientated.'