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Difficult road of a pathfinder project

The contract has been signed to build and run a state school using private money. Biddy Passmore reports.

When you have builders in, they say you should always be prepared for the job to take twice as long as originally intended.

The same seems to apply - with knobs on - to school building projects under the Private Finance Initiative. Except that these projects appear to take twice as long as anyone would have thought possible before the building has even started.

Now, however, in one such case in Dorset, the contract has been signed and the first sod cut for a pathfinder project to build and run a state school using private-sector finance.

The Colfox School, an 11-18 comprehensive in Bridport, Dorset, will be completely rebuilt by the summer of 1999. Jarvis Colfox Ltd will build and maintain the school, and then, in return for regular fees, run services such as catering, ground maintenance and cleaning, for a minimum of 30 years. The capital value of the new building will be around Pounds 12 million.

Just how long it has taken to reach the deal signed last month between Dorset County Council and the construction and facilities management company Jarvis was revealed at a PFI conference in London last week by Paul Kent, the council's head of financial services.

In 1994, the council had looked at the option of "making do and mending" the existing school, the first comprehensives built in the South-west. Long bedevilled by construction and maintenance problems. The 1956 school was now also much too small for its 900 pupils, having been designed for 650. The county decided the only sensible solution was to rebuild and felt that private finance would permit quicker replacement of the school and reduce running costs. As the only secondary in Bridport, next to a new industrial site, Colfox would be able to earn money for the developer by providing training and sports facilities for the town.

But it was not until the middle of May 1996, when the then Conservative government published new draft regulations on capital finance, that the PFI option began to look really worthwhile.

The county got moving: a design competition, a briefing day for contractors in July, the drawing up of a short-list of potential bidders in August and September, the preparation of bids in the autumn, to be received by December 23. Then things started to get bogged down.

"The programme looked good until we started to get the bids," said Mr Kent. "It took much longer to evaluate them than we expected."

A large part of the problem was the difficulty they had in comparing bids, because the county had not standardised the bidding form. Bidders had thus interpreted the requirements in their own way. Dorset was "disappointed" with the bidders' response on income generation, said Mr Kent, adding: "It seemed the main way they were looking to make money was from us." Some bidders scored low marks for taking a "minimalist" approach to their duties once the school was built; Dorset wanted a full repairs and maintenance service, including caretaking and replacing furniture and equipment.

In February 1997 the county made its choice and started to negotiate a contract. That took eight months rather than the expected three. But Dorset has ended up with a deal that it reckons is about 2 per cent cheaper than if the county had used public-sector finance.

The new school, for 1,060 pupils, should be ready in August 1999. The contract contains incentives to keep to the timetable: at least 20 per cent of the payments can be withheld if facilities are not ready on time or maintenance is inadequate.

Dorset is now thinking of two more PFI projects, Mr Kent says, but he will not be leading them; being a pathfinder is exhausting. Now he is explaining the virtues and pitfalls of PFI all over the country.

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