The barriers to entry into the PFI market

Abstract

This paper reports early results of a study of construction contractors and their experiences of the PFI market. Utilizing material from semi-structured interviews with three categories of construction contractor, small, medium and large, consideration is given to the barriers to entry which contractors face when approaching the PFI market. The paper highlights six barriers of entry: lack of appropriate skills; high participation costs; high project values; high risk; lack of credibility and contacts; and demands on management time. These barriers affect the three categories of construction contractor in different ways. The findings suggest that the larger the contractor, the more able it is to overcome these barriers and to compete in the PFI market. The findings also suggest that certain barriers to entry will decline as the industry matures, whilst others will remain.

Public-Private Partnership Networks: Exploring Business-Government Relationships in United Kingdom Transportation Projects

“…These full-service firms have the size, experience in general project management, reputation, and financial capacity to take a lead role in multiple public-private partnership bids and to obtain external investments (Ezulike, Perry, and Hawwash 1997). Put differently, full-service firms in each sector have experience working in contexts of complex project ecologies that require the coordination of numerous subcontractors and reciprocally related tasks.…”

The new construction industry

“…In construction the methods used for tendering and procurement of projects are important determinants of the level and form of competition in the industry. The emergence of the one stop supplier, the global firm, for large private and public projects, with their demand for capacity, technical capability and capital, has placed these projects out of reach of the conventional contractors, (see also Ezulike et. al.…”

Port risk management and Public Private Partnerships: factors relating to risk allocation and risk sustainability

“…The level of risks involved in PFI contracts and the amount of finance required can be a barrier to entry for smaller private companies (Ezulike et al 1997). Owen and Merna (1997) also found that risk allocations early on were perceived to be unfair to private sector partners.…”