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HA road plan on hold

Highways Agency abandons plans for private finance managing agent contractor deal

THE HIGHWAYS Agency is shelving ambitious plans to introduce PFI-style contracts for network maintenance after being warned major loopholes in the process could allow contractors to make a killing.

Earlier this year the agency consulted with the industry over the possible introduction of a new-style private finance managing agent contractor deal.

Under the plan a contractor would pick up a long-term maintenance deal combining the flexibility of the existing managing agent contractor contract with whole-life costing associated with PFI.

The first PFMAC deal was expected to cover the south-west, currently agency areas 1 and 2, and was due to be advertised in November with work starting in January 2005.

But following consultation the agency has ripped up these plans and the PFMAC model has been put on hold.

One contractor involved in the consultation said the agency had been sent running scared by contractors' responses.

He said: 'The agency should be thanking the industry. The model presented to us by them wasn't anywhere near developed enough to get off the ground and had huge loopholes in terms of asset management. It would have been open to widespread abuse.'

A report on the consultation process said: 'To be sure of fully maximising potential PFMAC benefits, the HA has decided to extend the timetable to full operational implementation.

'While PFMAC development work continues, a new enhanced MAC will be considered. This will capture and take forward many of the major achievable benefits already evident from the PFMAC including whole life costing attributes, performance specifications and partnership based risk-sharing.'

A 'superMAC' alternative is now being proposed for areas 1 and 2. It is thought this deal may last up to 10 years and raise the maximum value of individual projects done under the deal from £500,000 to £2 million.