Another wheel comes off the DTR wagon. Land Securities Trillium announce their exit from the METRiX consortium
Things seem to be going from bad to worse for the DTR programme. Firstly, there was the withdrawal of preferred bidder status from METRiX for package 2, then there was the credit crunch that saw increasing costs to the tune of at least £1 billion, then the fall in land prices the sale of which the project is predicated upon, then a further shift to the right in terms of the date of contract signature, and now one of the main companies in METRiX- Land Securities Trillium has announced its withdrawal from the programme.
Land Securities Bail Out
On the 11th December the Financial Times carried an article that announced Land Securities Trillium was withdrawing from DTR package 1. Portsmouth South MP, Mike Hancock who sits on the Defence Select Committee said, “With Land Securities pulling out this must seriously damage the entire project. It was never financially viable.”
LST was one of the main pillars in the METRiX consortium responsible for the build programme. After putting £20 million into the project and seeing its potential profits being continually squeezed they announced they were withdrawing “in the light of the significantly increased bid costs, carried at risk by the bidders, required as the project moves into detailed design work.” Charles Barrington, METRiX CEO, tried to put a brave face on the catastrophic announcement claiming that Land Securities departure was for “strategic reasons.” He confidently maintained that METRIX would find a new building partner “within the month.” PCS therefore expects an announcement by
The first that PCS heard of the Land Securities withdrawal from METRiX was an article in the Financial Times! Indeed, this was the case for Members of Parliament too. Mark Pritchard, MP for the Wrekin, and staunch supporter of the PCS campaign, asked this very question in the House of Commons. He still awaits a reply.
PCS will be complaining about this failure by the MoD to advise the Trade Unions.
Relations between the Trade Unions and the Package 1 IPT have hit a new low because the Team Leader seems to be frustrated that PCS is exploiting possible leaks within his team and is using the Freedom of Information Act to make the MoD reveal information they'd rather not share at all. This is bad enough, but talking to the press appears to be the final straw.
The IPT Team Leader appears bemused by our long running campaign and wishes PCS would simply stop its work of defending public sector jobs and engage constructively with privatisation.
Qinetiq feels the shockwaves from Land Securities withdrawal
The Guardian reported on 19th December that Qinetiq has weakened after a sell note from UBS.
UBS said "In our view, QinetiQ is trading at a full valuation, yet we believe its outlook is clouded by a number of significant downside risks. We believe it will be very difficult for QinetiQ shares to re-rate until these concerns are addressed. We also believe consensus views on valuation and earnings are at risk of turning more negative."
In particular UBS is concerned about the recent departure of Clive Richardson, the head of the Europe, Middle East and Africa region; the withdrawal of Land Securities' Trillium division from a consortium including Qinetiq bidding for a £12bn MoD contract, as well as growing UK defence budget pressures.
The report concluded:
"We are lowering our price target primarily driven by the removal of the value we ascribed to the MoD's Defence Training Rationalisation contract following Trillium's withdrawal from the joint venture bid. We believe the risk
relating to the DTR contract is now too high to warrant a more positive stance."
St Athan- The Home of the
PCS has long maintained that IO's will not transfer across the country to St Athan, as a survey of members has borne out. The MoD whilst accepting this as its number 1 risk, bullishly maintained that its risk mitigation plan took this into account.
However, the military at St Athan have now been forced to admit that they cannot recruit and retain IO's at the site and have submitted a business case for Recruitment and Retention Allowance.
There are 63 band D IOs within the scope of No4 School of Technical Training (No 4 SOTT) which is a part of DCEME. There are currently 17 gapped posts (i.e. 28%) within the Training Operations Group.
In addition 8 IOs have left No 4 SOTT in the last 12 months- their reasons are:
- Wishing to remain Civil Servants and not wanting to work for a METRiX company.
- The Civil Service salary is uncompetitive.
- Promotion within the Civil Service,
The Business plan notes:
“Even the fact the MOD St Athan has been chosen as the preferred site for DTR has had no significant positive impact on the ability to retain staff. Instead, recent departures have merely exacerbated the situation as remaining (civilian and military) are required to undertake additional work and thus they become disillusioned. It is anticipated that increased stress (and associated absence) and staff resignations are likely to increase as a direct consequence.”
Finally the business case warns that “morale of many of the civilian staff at No 4 SOTT is at a crucial juncture.”
It is a harbinger of the future disaster of DTR if MoD does not heed the advice of PCS and the evidence waived under its nose- Risk Mitigation Plan or not.
Geoff Nield Quits DTR Package 1 as End Date Moves Over the Horizon
At the last DTR IPT meeting with the Trade Unions Geoff Nield announced he will be leaving post by March 2009. Nield has pushed the project hard and is obviously frustrated at the slowness of progress being made and the intransigence of PCS in particular. With no end in sight, despite the propaganda contained in the IPT’s newsletter, Nield has decided to call it a day and move onto pastures new.
He will be replaced by Anthony Harkin who has been delivering the RSME privatisation at
Tim Inshaw Visits IO Conference and Tells PCS How to Campaign
In November Major General Tim Inshaw, DTR Programme Director, attended the IO conference and spoke to delegates about DTR. Inshaw was forthright in his defence of the programme but admitted that if IOs didn’t transfer to the
In addressing conference delegates, Inshaw suggested that PCS’ campaign strategy is flawed. He was happy that PCS should tell the politicians and public that DTR was bad for Civil Servants personally, but he urged PCS not to insist that DTR is bad for defence. Inshaw advised conference that all the military top brass agreed that DTR was good for defence. However, when challenged on the ability of METRiX to deliver the contract without the existing IO cadre, he looked decidedly uneasy.
Tim Inshaw Denies PCS Request for Information on Risk Mitigation Plans
Inshaw was asked to make available to PCS the Risk Mitigation Plans for package 1. However, in a letter dated 25th November the General said, “I regret it is not possible to afford this opportunity at this stage of the Project…all change programmes have some risk attached to them…we have taken note of the views of SIOs and we have a comprehensive approach to managing these risks.”
This response is disappointing and PCS will now use the Freedom of Information Act to try to uncover the information MoD is so desperate to hide.
Qinetiq and Raytheon, Don't Seem to See Eye to Eye
There is always lots of chatter on projects such as DTR. Some of it turns out to be extremely prescient, other “information” just hearsay. However, it has been reported to PCS that all is not well between Qinetiq and Raytheon. There appears to be bad feeling between the two companies, with Raytheon believing its been marginalised by its partner. This does not seem to bode well for the future of the project where close working and harmony between training delivery and training support/course design is essential.
Some personnel working on DTR are impressed with Raytheon’s course design software, but not a lot else. They have posed the question why MoD can’t just buy under license this software without going down the privatisation route?
Does DTR Breach The Cabinet Office Protocols On Staff Being Transferred Into a Redundancy Situation?
PCS is currently liaising with its specialists in this field to ascertain whether DTR does indeed fall foul of the agreements on staff being TUPE’d into a redundancy situation.
PCS will communicate the outcome once it is known.
PCS continues to oppose DTR step by step. PCS will continue to campaign with you and for you. The New Year will herald the second anniversary of the preferred bidder for DTR. PCS will be planning to take part in a meeting to be held in the Welsh Assembly.