PFI could compromise safety

Bill Semple, former chief executive of National Air Traffic Services (Nats), has told the High Court that the private finance...

Bill Semple, former chief executive of National Air Traffic Services (Nats), has told the High Court that the private finance initiative (PFI) as a means of funding complex systems "could have quite serious safety implications".

Semple revealed his concerns about PFI when giving evidence in the High Court during Nats' defence of a writ issued by supplier EDS.

The writ came after the failure of the first PFI contract signed by the Labour Government in 1997, for a satellite-based "Oceanic" system to track flights across the North Atlantic.

Semple disclosed that Nats had been "saddled" with signing a PFI contract for a new flight data processing system at the Oceanic centre at Prestwick in Scotland but had "come to terms with it". Nats had looked at ways of moving from the Oceanic PFI deal to a conventionally funded contract but the Treasury had not given its consent.

When asked by Judge Toulmin why Nats preferred conventional to PFI contracts, Semple said, "We thought that PFI was an inappropriate mechanism with which to fund parts of a highly complex technical, integrated, safety-critical system."

Semple's criticisms of PFI may reverberate with executives on other mission-critical public sector computer projects that have failed. Schemes that have run into difficulty or have been aborted include IT projects at the Immigration Service, the Post Office, the Passport Service and the Lord Chancellor's Department.

Under PFI, said Semple, the customer "did not have very much control" over the running of the systems, nor ownership of them. "[To fragment] different bits of the organisation and to have them effectively under different ownership could have quite serious safety implications," he said.

Under PFI the supplier builds a system at its own expense, buying and owning hardware and software, and makes a profit by charging the customer to use the system.

But Nats was concerned that PFI meant it did not have as much control and "visibility" of the development work as in a conventional contract where stage payments were made when the supplier met contractual milestones.

Where PFI systems were under different owners, "We would simply not have that visibility, so things could be happening in the system of which we had no knowledge," said Semple. He said that a chief executive would have difficulty in signing off a system as safe if they did not have an "integrated system that you are sufficiently in control of".

On the Oceanic contract, Semple said that a good number of Nats' problems "might have been able to be resolved had we been out of PFI". Evidence presented in the case has raised the question of whether the EDS contract failed at least in part because it was a PFI deal.

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