The barriers to entry into the PFI market

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.