Page 3: Resources
The required skills for any construction project include proven ability to design, construct and commission the work. The ability to co-ordinate and manage the design and construction works is vital to PFI projects where late completion will cause revenues to be delayed.
An important part of the PFI process is ‘bid management’. The bidding process for PFI projects is notoriously expensive and can consume a considerable amount of time and money. Therefore, the resources expended in the bid process need to be closely budgeted and controlled. The majority of bid costs are incurred in structuring the finance package and negotiating the legal agreements. Though in-house legal and financial staff are supplemented by the use of external consultants and advisors, it is very necessary to have some of these diverse skills in-house. These projects represent significant investments for Tarmac and some of the processes are not dissimilar to those undertaken by the Group when investing, for example, in new quarrying facilities.
Tarmac’s Private Finance Unit co-ordinates the input from its different businesses when putting together a PFI project. Designers and operations staff work closely together to optimise the ‘whole life costs’ of each project. For example, when building a new road it may be more efficient and cheaper in the long-run to install expensive surfacing which has a long life, as opposed to a cheaper product which would require frequent replacement. In addition to finance borrowed from banks, Tarmac invests its own funds into PFI projects through its own financial specialists.