Interest grows for Welsh MIM projects

The Welsh government has underlined its commitment to using its version of PPP – the Mutual Investment Model (MIM) – to deliver schools, roads and hospitals, with a technical day that attracted strong interest from the market.

Although the level of interest in the schemes will only become clear next year, the event was well attended with Kajima Partnerships and John Sisk confirming that they are planning to bid. Other organisations showing interest included Acciona, Amber Infrastructure, Bam, Colas, Dalmore, Equitix, Kier, Marubeni, Morgan Sindall and Sacyr.

The event also provided more clarity on the scope and timelines of the projects. The Velindre Cancer hospital is expected to be first out of the gates with an OJEU expected in April. Programme director on the scheme, Dennis O’Keefe, said that there has been “numerous mitigation measures taken to minimise design, construction and operational risk transfers” in an effort to increase the attractiveness of the project.

O’Keeffe told Partnerships Bulletin that although many of the usual UK PPP contractors have had well publicised difficulties, the project has attracted other European investors.

The A465 Dualling MIM deal for sections five and six is due to market shortly after Velindre, with OJEU, PQQ and evaluation scheduled between May and June 2018.

The final schemes across primary, secondary and further education as part of the 21st Century Schools programme are at a less advanced stage and the government is still market testing the most market friendly batching approach to the 40 projects. However, the government expects the assumed four batches to hit the market later in 2018.

Andrew Jeffreys, director at the Welsh Treasury, said there was “clear political commitment” to the schemes. In light of the recent comments at the Labour Party conference about PFI projects being brought back into the public sector, Jeffreys said it was important that “the public interest is protected and seen to be protected”.

He also underlined the scale of the investment deficit challenge and the role of the private sector in helping to bridge that: “There is a heck of a lot of work to do and there needs to be a lot of pace in order to deliver that.”