Amey slates PFI and puts stakes in projects up for sale

Amey, one of the contractors selected to take over the London Underground, yesterday launched a broadside against the Government's private finance initiative and announced the sale of its equity interest in a number of high-profile PFI projects.

The group also said it would be cutting down on the number of PFI projects it tenders for, bidding on a much more selective basis and seeking partners to help share bidding costs in return for a slice of the equity on individual projects or the construction contract.

Brian Staples, Amey's chief executive, singled out the Ministry of Defence as one of the worst Whitehall departments when it came to letting PFI contracts. "The group, among many others in the market, has made clear to the Government that the PFI procurement process is often too costly and too slow and that the process needs revision in order to continue to attract a reasonable level of interest," Amey added.

After a group-wide review, Amey is selling its equity interest in nine PFI projects, including the refurbishment of the main MoD building in Whitehall, in a move which could raise £75m to £150m.

Amey is also disbanding its loss-making technology services division as part of a cost-saving plan which will result in a one-off charge this year of £10m.

The head of the division, John Robinson, is leaving with a pay-off worth about £260,000 after Amey rejected his offer of a management buyout and decided instead to sell to an external bidder.

Amey, which shocked the PFI sector earlier this year by adopting accounting procedures that turned last year's profits into losses, reported a £13.5m increase in profits before tax and expectionals to £20.2m for the first six months of the year and said its order book, excluding London Underground, was now £5.2bn.