Contractors have written off the £1.8 billion framework to design, build and operate five large PFI prisons on behalf of the Ministry of Justice, Construction News understands.
Seven consortia were shortlisted a year ago for three places on the framework that still have not been awarded.
Four of the five prisons appeared to be abandoned earlier this year, while the final 1,500-place jail was deferred as part of the spending review.
One contractor said: “The scheme just seems to have petered out, it’s a shame. The government said the final prison has only been deferred but everybody seems to think the scheme is dead.”
Three established partnerships were on the shortlist for the work - Carillion with G4S; Interserve with Kalyx; and Skanska with Serco.
Balfour Beatty teamed up with US operating firm GEO Group, and Bouygues with Reliance Security Group. Laing O’Rourke was
shortlisted with Mitie, and Wates with MTC.
Justice capital spending will be cut by 50 per cent in real terms from £600 million in 2010/11 to £400m in 2011/12, then £300m in each of the next three years.
A Ministry of Justice spokesperson said it would re-evaluate its long-term strategy for prison capacity after consultation on offender management.