DTR costs could rise by a further £1bn

From Defence management

DTR costs could rise by a further £1bn

Tuesday, February 24, 2009
The cost of the Defence Training Review (DTR) may rise by a further £1bn Defence Management has learned.

In a report that first appeared in the South Wales Echo, the cost of the project was listed as £13bn, an increase of £1bn since the last officials figures on the DTR were released late last year.

The initial contract projected the DTR's costs to be £11bn. But the finances for the consortium ran into trouble when their main source of income: the selling of vacant MoD land, was affected by the recent slump in property prices.

The Metrix consortium which is running the programme has resubmitted a business plan which defence ministers have said is close to being approved. The proposal estimated costs to be art £12bn.

The latest cost projection of £13bn could factor in contingency funding or other unforeseen added costs. With the economy now officially in recession the financial markets have proven become more and more volatile with lenders timid to lend money, even to public service related projects. An attempt to raise revenue for the DTR through a bond initiative was scrapped a few months ago due to poor returns.20

The newspaper did not explain the rise of £1bn.

MP John Smith who's contingency includes St Athan where the DTR is to be built compared the region to the Gold Rush in the US.

"There will be a long queue of companies and organisations rushing to Barry and the Vale because this area will be at the heart of a world-leading centre of excellence in technical skills training.

"Where else but here in Wales will thousands of trainees from our Army, Navy and Royal Air Force receive training in highly-prized and transferable technical skills under one roof? The opportunities created by this project for people and businesses in Barry and the Vale are huge," Smith told the South Wales Echo.

Officials from PCS, the union representing the vast majority of civilian trainees who will either have to move to St Athan or lose their jobs, continue to fight the proposal. The have argued that St Athan does not have the infrastructure in place to be a suitable training academy and that forcing employees to move from all over the country to rural Wales is unacceptable.

Paul Bemrose PCS National Official said, "Should this project go ahead it will be an economic disaster for the local economy."

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