PM gives no assurances on St Athan

John Smith MP meets the PM to discuss the defence training academy at St Athan reports Barry and District News on the 26^th Jan on the same day as The Times reports that PFI schemes worth hundreds of millions of pounds for roads, waste plants, hospitals and defence projects are now under threat because the banks are reluctant to lend money.

The future of major PFI projects, such as the Defence Training Review in which QinetiQ has a major stake, is uncertain while credit markets are frozen say the Investors Chronicle

The National Audit Office (NAO) is considering opening an investigation into the QinetiQ-led project, which is the largest PFI in British history.

MP Mark Pritchard said that the DTR is "a privatisation too far". He said a key driver of rising costs - which went from GBP11 billion to GBP12 billion - and increasing delays was the need to build an infrastructure, including transport links, at RAF St Athan in Wales, which is where the project is bas

John Smith MP has failed to get any assurances from Gordon Brown or the Government that the £12billion and rising Defence Technical Academy at St Athan will be able to proceed.

Vale MP meets the PM 12:40pm Monday 26th January 2009

VALE of Glamorgan MP, John Smith, discussed the strategic importance of the multi-billion pound Defence to the UK economy with the Prime Minister, Gordon Brown, when they recently met in 10 Downing Street. Following their meeting John Smith said: “The Prime Minister recognised that this project is of national importance. "It will equip our armed forces with the best training in the world, greatly expand our skills base, create thousands of jobs and will in future years achieve significant savings for the British taxpayer.” http://www.barryanddistrictnews.co.uk/news/latestnews/4067236.Vale_MP_meets_the_PM/20412

MP supports St Athan jobs Jan 27 2009 by Lisa Jones, South Wales Echo

VALE of Glamorgan MP John Smith has been seeking assurances from the Government about the future of aircraft repair jobs. Mr Smith was speaking at the inquiry into the Defence Support Group (DSG) and the progress made since the amalgamation of the Army Base Repair Organisation (ABRO) and the Defence Aviation Repair Agency (DARA) in April 2008.

The chief executive of DSG, Archie Hughes, told the committee that work for St Athan was being actively sought for beyond 2014, when its maintenance of the VC10 aircraft is due to end.

Mr Smith, a member of the committee, said: “The workers at the St Athan site have some of the most highly prized set of technical skills in the aerospace engineering world. “I have no doubt whatsoever that the arrival of the Defence Technical Academy at St Athan can only work in favour of DSG St Athan winning new aircraft maintenance, repair and overhaul work.”

http://www.walesonline.co.uk/news/wales-news/2009/01/27/mp-supports-st-athan-jobs-91466-22785475/

FTSE 350: Aerospace & Defence
Investors Chronicle, UK - 19 Jan 2009 The annual round of defence spending in the US and the UK will be a focus of anxiety for UK-listed companies over the next 12 months, as governments on both sides of the Atlantic grapple with growing budget deficits….

Efforts to close a yawning £2bn hole in the UK defence budget will dominate the year and this could see several projects either mothballed or delayed. The Ministry of Defence has already put back the delivery date of its new aircraft carriers by two years, and the future of major PFI projects, such as the Defence Training Review in which QinetiQ has a major stake, is uncertain while credit markets are frozen.

…

http://www.investorschronicle.co.uk/MarketsAndSectors/Sectors/article/20090119/0bc86472-dbef-11dd-bd75-00144f2af8e8/FTSE-350-Aerospace--Defence.jsp

Labour forced to call for help as building programme stalls
Times Online, UK - 25 Jan 2009
PFI schemes worth hundreds of millions of pounds for roads, waste plants, hospitals and defence projects are now under threat because the banks are ...

UK's Defence Training Review is nearing collapse, warns MP
Jane's, UK - 31 Dec 2008
By Gerrard Cowan The UK's GBP12 billion (USD18 billion) Defence Training Review (DTR) is on the verge of collapse due to a "triple whammy of rising costs, ...

St Athan academy triple whammy of rising costs, time delays and national security concerns

Meanwhile the silence from Welsh politicans is deafening! Government auditors could investigate struggling defence PFI 05/01/2009 The National Audit Office (NAO) has said it may investigate the £12bn Defence Training Review (DTR) project, as fears persist that the deal might not be viable. "We will continue to monitor the defence department's progress to see whether and when the time might be right to start a full value-for-money investigation," said Tim Burr, the head of the NAO. The deal would centralise defence training in St Athan, Wales. Mark Pritchard, a Conservative MP who sits on the Commons' defence committee, told the defence press the deal was on the verge of collapse due to a "triple whammy of rising costs, time delays and national security concerns". A spokesman for Metrix, the preferred bidder on the project, said: "Metrix is pleased with the progress that it is making with the defence ministry and is working towards completing the process that will lead to contract signature by the summer of 2010."

NAO -St Athan unaffordable

NAO acknowledges DTR cost problems

The Defence Training Review (DTR) continues to face an uphill struggle to reach a finalised contract after a leaked memo from the NAO confirmed that costs and delays were continuing to increase.

The DTR is designed to consolidate training for armed forces personnel into one location, much of it conducted by private trainers rather than civilian personnel. In 2007 the Metrix consortium which is leading package 1 estimated that the costs would be £11bn.

Up until now the NAO has not weighed in on the DTR since the project was in contractual negotiations and therefore not on the government’s balance sheet. But in a letter to MP Mark Pritchard who’s constituency covers one of the training bases designated for closure if the DTR comes to fruition in St Athan, Wales, the NAO admitted that Package 1 of the contract was now unaffordable.

The provisional contract was awarded to Metrix in January 2008 but by May it had already encountered severe financial problems. According to the NAO’s letter, Metrix submitted a revised proposal in September that was less dependent on raising revenue through the sales of MoD land. If the proposal is accepted, the contract could reach financial close at some point i n 2010, two years after it was first awarded to Metrix.

The training centre was scheduled to be opened by in 2013 but with delays the contract the centre's operational date may be pushed back further.

NAO officials acknowledged that the cost of the programme had now risen to £12bn. However according to a freedom of information request provided to the PCS Union, the initial cost of the programme was £10bn not £11bn, meaning that costs have already risen by £2bn in less than three years.