Privatisation of military speeds up

Not a word from Plaid Cymru AMs or MPs on this..so much for their opposition to PFI and militarisation of Wales....no almighty uproar.....? Why? More important things to do like twittering about their blackberry's!

If they hadn't kept so quiet on this we might have stopped it....blood on plaid cymru hands.... as more of our young people will be enticed in to the military to be canon fodder. And there goes Welsh independence with this UK training base in Wales.

QinetiQ Group: Metrix Awarded GBP31 Million Training Pact By MOD
CNNMoney.com - USA
-The Early Training Transformation (ETT) contract will see the consortium, the Preferred Bidder for the MOD's DTR Package 1 Project, take the first ...

QinetiQ and Sodexo JV Metrix wins £31 mln MoD training contract
Proactive Investors UK - London,England,UK
The financial close on the overall DTR programme remains on track for 2010, ... TheDTR Package 1 Project aims to transform the way the MoD delivers ...

Metrix is a consortium led by QinetiQ, which leads the training delivery arm and Sodexo, an international facilities management group, and war profiteer chosen by the MoD to provide training design and development services. It will also build and run the MoD's Defence Technical College in St Athan, South Wales

Private Eye on Metrix subsidy

Soon after one half of private consortium Metrix dropped out of the beleaguered PFI Deal to privatise military training because of escalating costs (before the contract is even signed), defence secretary John Hutton has quietly sanctioned a further £40 million in “risk reduction activity”.

This is shorthand for a subsidy to Metrix, led by the privatised defence technology firm Qinetiq which has admitted it will be in deep doo-doo without the contract. The company has already been given £9m but now needs more to “mature the deal and maintain the mobilisation of Metrix resources.”

The MoD had been hoping to keep the sweetener quiet, paying lip service to parliamentary niceties through an “unnumbered command paper” with out any announcement. But Tory MP Mark Pritchard, arch-opponent of the deal, spotted it and has filed an objection. So much for slipping the deal through on the quiet.

Reminder of Qinetiq history

The privatisation of the UK's QinetiQ was undermined by "profiteering" on the part of its management, the House of Commons Committee of Public Accounts has concluded.http://www.janes.com/news/defence/business/jdi/jdi080610_1_n.shtml

Sir John Chisholm, chairman of QinetiQ - and also chairman of the Medical Research Council - and Graham Love, the chief executive, turned investments of £129,000 and £108,000 into assets worth £22m and £18m respectively when the firm was floated in 2006.

At the same time Carlyle, the private equity group, which bought a stake in QinetiQ for £42m in 2003, was able to sell at a £300m profit three years later.

Who is WAG welcoming to wales?
Since his resignation as DOD’s Under Secretary of Defense for Intelligence Cambone has been vice president for strategy of a company known as QinetiQ (pronounced “kinetic”) North America, a major British-owned defense and intelligence contractor based in McLean, Virginia.

Another wheel comes off the DTR wagon

PCS briefing

Another wheel comes off the DTR wagon. Land Securities Trillium announce their exit from the METRiX consortium

Introduction

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 11^th 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 Barrington by the 12^th January in regards to the new company joining METRiX. However, PCS will not be holding its breathe…

Who Knew?

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 19^th 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 Defence Training Academy, Can't Recruit IO's – You Couldn't Make This Up!

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 Chatham.

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 Defence Training Academy that it would be a disaster for military training. Clearly, by inference at least, he does not believe this is a real possibility.

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 25^th 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.

Conclusion

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.

St Athan deal on the ropes - QinetiQ dodgy share sale!

no 1219
One in the Eye (page 3) Private Eye Article

The Eyes exposure of the unaffordability and big military risks of plans to privatise defence training in a £12bn PFI deal has angered the man running the project Brigadier Geoff Nield. "I return to you on the subject of the leakage of DTR related material to the press," he writes in a memo. "You will be aware of most of the articles on package 1 [the main, PFI, element of training reform] which have appeared in Private Eye." What really riled Nield was our exposure of of the cancellation of a planned announcement before parliament broke up. "The act of someone to release this latter information to a private eye journalist is clearly illegal, contrary to to the official secrets act," he mutters darkly.

Nield might be over-egging it as the official secrets act contains a public interest defence. Or maybe he thinks the public would be better off not knowing that the deal, which the MOD has refused to justify financially or operationally, is on the ropes. Or that the MOD's own secret assessment betrays the risk that "training output fails to meet the requirements of of operational command ".

D-day is due this month with an announcement on signing the PFI contract - or given the problems and latest rumours that the sale of MOD sites on which the deal depends has fallen through - abandoning PFI altogether.

All of which makes the timing of last weeks sale by the MOD of its remaining 19.8% stake in QinetiQ, owner of Metrix, highly unusual. If the MoD pulls the defence training deal. QinetiQ's share price will be hit and questions will be asked about whether the forthcoming announcement was a factor in the sell off decision and if so, whether inside information played a part.

If the deal goes ahead and QinetiQ's stock rises, however, another badly timed government sale will have cost the government millions. Remember you read it here first.

pic Vale of Glamorgan - Council briefed on defence training academy plans

During a visit to South Wales, Major General Tim Inshaw and Brigadier Geoff Nield visited the Civic Offices to meet council cabinet members, ...

see also page 6 on EDS. (whose interest is he looking after?)
Former long serving armed forces minister Adam Ingrams appointment as £50,000 a year consultant for the Eye's favourite firm, EDS, is just reward for 6 years at the MoD helping booster the firms buisiness.

ED's notable successes in recent years include a £250m contract to take the forces payroll (with predictably disasterous results so far) membershiop of the Metrix consortium negotiating a £12bn (and rising) PFI deal to privatise military training and a 4bn contract won in 2004 to overhaul all military and civilian defence IT......

Comment
Not a word of any problems like unaffordability and big military risks by Wing commander Richard Read in his propaganda article titled ACADEMY logbook in the Gem on Aug 5th ..although he is described as site director, working closely with Metrix and the MoD on the defence training review programme ....Read tells us "While much debate ensues over the precise number of jobs that will be created; even at its lowest, likely conservative, estimate it will be in the thousands with evident positive boost for the local and South Wales economy"!!!
..The new Defence Technical Academy is building on S
Cowbridge Today, Wales - News 11:13 8-Aug-08
No mention of these either by WAG and friends sham consultation.

..........................................................................................................................................
Notes

‘St Athan jobs dwindle while the costs rise’
Cowbridge Today, Wales - News 11:13 8-Aug-08

Plaid chief opposes St Athan academy
Wales Online - Politics News 07:26 6-Sep-08

Brig Geoff Nield. here

Vale of Glamorgan - Council briefed on defence training academy plans

During a visit to South Wales, Major General Tim Inshaw and Brigadier Geoff Nield visited the Civic Offices to meet council cabinet members, ...
www.valeofglamorgan.gov.uk/our_council/press_office/latest_news/2008/february.../military_academy_plans.aspx - 14k - Cached - Similar pages - Note this

Vale of Glamorgan council Reports of the Director of

7. Project Management Unit: (i) The Defence Training Academy and

[View Minute]

St Athan Deal collapsing?

TEXTBOOK BUNGLING
Desperate for cash, the Government sells it's remaining stake in defence research firm QinetiQ for a knockdown £257million in a depressed market. So ends the saga of incompetence that has robbed taxpayers of countless millions, while vastly enriching a handful of former civil servants. Somebody should write a history of this Government's handling of QinetiQ as a textbook for whelk-stall owners on how not to run business.

Credit Crunch Affects £11 bn( or is it £12bn) contract

The Daily Mail has now picked up on the effects that the current credit crunch is having on the proposed Defence Training Review (DTR) contract: By Karl West see here

Credit Crunch hits £11bn Forces deal after development land value plummets

By KARL WEST All By This Author - 12/09/2008

A controversial £11bn contract to provide training to Britain's armed forces is in danger of collapsing as a result of the credit crunch.

The QinetiQ-led Metrix Consortium, which also includes property firm Land Securities and American engineer Raytheon, is preferred bidder on the giant Defence Training Rationalisation deal.

Metrix won the contract back in January 2007 with a plan to slash the Ministry of Defence’s training estate from 30 sites to about ten, with a main campus at St Athan in South Wales.

It had planned to keep costs low by selling off the unwanted land and buildings to either housebuilders or commercial property developers.

However, the value of development land has plummeted since the contract was awarded as the credit crunch has frozen the market.

It is thought the cost of the training proposal has rocketed by £1bn to £12bn, as debt is more expensive and Metrix’s ability to offset rising costs with land sales has diminished.

One senior industry source said: ‘DTR is in trouble. We know that for a fact because they (Metrix) can’t afford it. QinetiQ went for the big bang with the property deals but the value of that property is no longer worth what it was since the credit crunch.’

It is understood the MoD is scheduled to meet next week with the consortium, which is due to present its ‘new financial model’.

The ministry insisted it remains ‘fully committed’ to delivering the project at St Athan, but admitted it is still in discussions with the consortium about how it is going to fund its training plans without compromising the scope of the project.

The MoD said: ‘A contributory factor adding to the complexity (of talks) has been the impact of the increased cost of borrowing and cost growth. Negotiations with Metrix are ongoing and both parties are working hard to drive down costs and obtain maximum value for money for the taxpayer.’

Metrix declined to comment. The decision to award the huge deal to QinetiQ (up 1/4p at 2141/4p) caused uproar because, at that time, the Government was the defence firm’s biggest shareholder with 19%.

However, the holding was sold for £257m this week.

Anti-metrix campaigners at Milton Keynes

Campaigners took the message to Milton Keynes - with the support of Mark Thomas - to highlight the key role the OU is proposing to play in the privatised military academy in bed with arms dealers & war profiteers Ratheon, Serco, Qinetiq, and incompetent EDS... and to ask what happened to ethics? What is the OU ethical stance?

Mark Thomas is in Cardiff
- Tue, 7 October (19:00) - Borders Bookshop - CF10 1AH - Talk and book signing.

see his website for more information.. http://www.markthomasinfo.com/

Mark's new book, "Belching Out the Devil" will be published on 25th September 2008. It is available for pre-order from Amazon

Mark new book is about Coca Cola. As many of you may know Coca Cola bottlers in Colombia face allegations that the plant managers colluded with paramilitaries to bring about the deaths of trade unionists working for the Coke plants.

What an interesting time for MoD to selling Qinetiq shares !!

Could this be considered insider trading should the MoD drop Metrix. IE Share prices are bound to sink even further if Metrix are withdrawn as preffered bidder for Package 1 ?? ??

What an interesting time for MoD to selling Qinetiq shares !! 

Qinetiq stake sale raises £257m

By Sylvia Pfeifer and John Willman

Published: September 9 2008 08:59 | Last updated: September 9 2008 08:59

The government raised £257.3m from the placing of its remaining stake in Qinetiq, the defence technology group that was privatised in 2003 and floated in 2006.

The Ministry of Defence placed its holding of 124.9m shares, representing 18.9 per cent of the company’s ordinary capital, at 206p –=2 06p above the original float price and 1p above the level at which Carlyle Group sold out at in February 2007.

The shares fell nearly 8 per cent on the news in early trade to 206.6p before closing down 6.04 per cent, or 13½p, at20210p.

Tuesday’s sale was not unexpected and came just days after its shares reached a record high of 235¼p last week. The sale is good news for the cash-strapped MoD.

The department said it would retain a substantial proportion of the proceeds, with the rest being diverted to the exchequer for “government spending priorities”.

It said: “The government always made it clear that it anticipated selling its entire financial stake in order to realise its financial investment and to achieve best value for money for the UK taxpayer.”

The contentious privatisation of Qinetiq in 2003 was criticised by MPs for giving bad value for money to the taxpayer. However, the government has been trying to sell state-owned assets such as the Tote and its stake in British Energy as the fiscal deficit has swollen. In December, the Liberal Democrats warned against premature sales to fill the deficit in the public finances at a time of stock market turn..

With an announcement expected towards the end of the month what message is this sending out if any !!!