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Back to stop-start state investment

AGENDA - COMMENT

IT STARTED to become clear a few weeks ago that the new regime of stringent financial checks at the Department of Health had walloped the PFI hospital programme.

So it is no surprise to learn that many contractors are now privately taking a very hard look at their exposure to healthcare PFI. Many will think twice about bidding on future hospital projects.

This week things took at turn for the worse in the road building sector when the eight regional transport boards unveiled their proposed fiveyear spending plans.

As contractors feared all along, many trunk road schemes got the red light, while small-scale local improvements and school bus schemes were waved through.

This is desperate news for those who geared up for a peak in road spending only to find precious little in the pot to justify their investment plans. Like firms involved with hospital PFI, the time has come to look elsewhere for work.

Against this background, who would take bets on which Highways Agency alternative to the £510 million Stonehenge tunnel project will be approved? Will it be the cut-and-cover tunnel or the overground re-routing of the A303?

This is sorry affair by any reckoning. But contractors remain sanguine, thanking their lucky stars that some sort of road scheme will be built to benefit the world heritage site.

It seems that for the time being civils firms must be content with water and rail work, while big builders keep their fingers crossed that commercial building shows the predicted upturn this year.

It is a return to stop-start investment programmes. But not all is doom and gloom.

Last Monday the Government opened the energy review with the clearest signal yet that a new age of nuclear power station building is dawning. Alongside the massive nuclear decommissioning programme, there is a real promise of long-term orders for those focused on this specialist area.

And on Tuesday, culture secretary Tessa Jowell fired the starting gun on the 2012 Olympic Games with the unveiling of details of the investment plan.

The time has come for a new direction.

And this time the Government must to stick to the plan.