Warnings ignored on PFI lab

The National Audit Office has criticised the Department of Trade and Industry
for allowing a private finance initiative contractor to press ahead with a
design for a new national physical laboratory despite believing it to be faulty.

The audit watchdog said private companies and banks lost at least £100m on
the cost of the high-tech buildings as a result and the project will only be
completed next year – six years late.

According to the report, the laboratory builders John Laing and the Serco
Group abandoned the £130m project and that John Laing was later forced sell its
construction business for £1 to a competitor.

The report also revealed how private companies behind PFI schemes can face
huge losses as well as enormous profits.

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