State underwrites St Athan defence’s PFI project

Please see the attached which is a copy of document placed before the House of Commons with regards DTR. Mark Pritchard MP tabled an objection today and therefore there will have to be a further investigation prior to this going ahead. It would seem that the Department are getting ever more desperate to somehow give Metrix even more funding to enable them progress. Its looks like they were hoping to sneak this through..... This should be some serious debate asking if this programme should continue if we keep having to bail out Metrix and give them ever more time to try and balance the books to make it look palatable.

Ministry of Defence spends another ￡40m on ailing contract Daily Mail
The Defence Training Review (DTR) is the government's largest private finance deal. It aims to consolidate the MoD's training bases from 30 to about ten,...

Details that the taxpayer has underwritten almost £50million in investment in the project to outsource soldier training even before a brick has been laid has angered the Tories.

Mark Pritchard, MP for The Wrekin and secretary of the Conservative defence committee, has written to the Financial Secretary to the Treasury, Stephen Timms MP, asking him to explain the rising costs.

He said: 'There are serious underlying funding problems in the DTR project and it is incumbent on ministers, given the increased level of taxpayer money involved, to make an early statement on the reasons and justification for these new funds.'

...State underwrites UK defence’s PFI project
Financial Times - London,England,UK
Under the deal, taxpayers will underwrite a further £32m of risk in order to push through the Defence Training Review, the UK’s biggest private finance ...

State underwrites UK defence’s PFI project

By Alex Barker, Political Correspondent Published: February 25 2009 02:19 |

Ministers have quietly offered contractors bigger state guarantees as a means of rescuing the £12bn ($17bn) private finance project to centralise the military’s training, the Financial Times has learnt.

Under the deal, taxpayers will underwrite a further £32m of risk in order to push through the Defence Training Review, the UK’s biggest private finance initiative.

The offer was made as the government prepares to intervene to save a clutch of big private finance deals facing funding difficulties, in areas from school building to road construction.

Qinetiq, the defence group, is the lead contractor for DTR, a giant project designed to centralise all non-military technical training for army, navy and air force personnel in one academy in Wales.

The 25-year deal, which has seen significant cost increases, suffered a big setback late last year after an outsourcing arm of Land Securitieswithdrew from the process.

The doubts over its future were partly allayed when Sodexo, the French contract caterer, stepped in to replace Trillium in the Metrix consortium, which was awarded the contract to build and run the academy.

Fresh offers to underwrite parts of the deal, specifically on the design and planning of the new centre, appear to have removed the remaining sticking points.

In an “unnumbered command paper” slipped out to the Commons, the Ministry of Defence said fresh guarantees could be exercised only if it delayed the project. It said the Treasury had approved the plan in principle. The MoD said: “Underwriting the costs of this project is a sensible and prudent business practice.”

Copyright The Financial Times Limited 2009

MOD Document

DEPARTMENTAL MINUTE DATED 17 FEBRUARY 2009 CONCERNING THE REPORTING OF A CONTINGENT LIABILITY FOR THE COSTS ASSOCIATED WITH THE DEFENCE TRAINING REVIEW

It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £250,000 for which there is no specific statutory authority, for the Department concerned to present to Parliament a Minute giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until fourteen Parliamentary sitting days after the issue of the Minute, except in cases of special urgency.

The Defence Training Review Package 1 Project is a large and complex Private Finance Initiative project, with the Metrix Consortium as Preferred Bidder. It seeks to transform the way the Ministry of Defence (MoD) delivers specialist engineering and communications and information systems training on a Defence wide basis to support better the future needs of the Armed Forces.

In January 2008, a Minute was laid before Parliament outlining an initial contingent liability for the underwriting of an element of Pre-Contract activity with Metrix. This existing Pre-Contract Agreement Letter (PCAL1), which the Department committed to in March 2008, underwrites risk reduction activity up to a maximum value of £9.5M. At the time this was considered sufficient to carry the project to the main investment decision point, however, whilst PCAL1 achieved its strategic objectives in generating the momentum necessary to establish an affordable and acceptable programme, further risk reduction activity is necessary to mature the deal and maintain the mobilisation of Metrix resources to ensure the most effective programme to the point at which the Contract is let.

In order to maintain this momentum a second package of risk reduction activity valued at £40.40M is proposed. This work, of which £32.67M will be underwritten by the MoD, is predominantly focused around the design and planning of the estate solution at St Athan, and further development of the training solution. By undertaking these activities ahead of the main investment point, it will be possible for Metrix to make a planning submission in May 2009 (which is essential if construction at St Athan is to start on time in August 2010). Further development of the training solution will build customer confidence in the training solution, allowing quicker and more efficient drawdown of military manpower after Financial Close.

The costs of these risk reduction activities are to be recovered through the tendered contract and are already captured within the Metrix price. Provided that the Programme reaches Financial Close, the costs will be paid from within the planned budget at no additional charge to MoD. The MoD will only become liable to reimburse the underwritten value of these costs if there is a failure to achieve Financial Close for a reason not attributable to Metrix. This commitment will be subject to a clear Limit of Liability, in total and by specific activity area, with any reimbursement of costs subject to full cost analysis supported by open book provisions. Should this liability be called, provision for any payment will be sought through the normal Supply procedure.

The Treasury has approved the proposal in principle. If, during the period of fourteen Parliamentary sitting days beginning on the date on which this Minute was laid before Parliament, a Member signifies an objection by giving notice of a Parliamentary Question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.

MINISTRY OF DEFENCE

Recent news

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.

Sodexo Takes Equity Share in £12bn DTR
PPP Focus.com, UK - 11 Feb 2009
The 30-year £12 billion project is the UK ’s largest PFI and the academy will be the largest vocational training facility Europe when it opens in 2014. ...
New partner found for largest-ever PFI New Civil Engineer
New Partner for UK Outsourcing Training Consortium DefenseNews.com (subscription)
Metrix: a first look into the future WalesOnline

beleaguered PFI - DTR -

A privatisation too far!
from Private Eye

Land Securities was to convert a "super-hangar" at St Athan, South Wales, into a huge new defence academy for around £1bn, but it seems the credit crunch has put paid to it raising that kind of cash. Whether another property company - most of them struggling to raise money - steps forward looks uncertain. The problem with the private finance initiative is that although the profits are great, they come over a long period and not many firms are in the mood for splashing out and waiting for their cash. If the Ministry of Defence can't persuade another company in, the whole scheme could collapse.

Meanwhile the list of compromises on quality that will be made if the deal does go ahead lengthens by the week.

Tory MP for the Wrekin Mark Pritchard, whose constituency will lose out when aeronautical training moves from RAF Cosford to St Athan and who has described the scheme as "a privatisation too far", recently raised a host of concerns with the National Audit Office.

Cherie's Place: Private Eye Reports on Land Trillium Departure
By CherryPie
They will understandably want to make a profit but why should Welsh taxpayers subsidise private organisations? The full article entitled 'Why Subsidise Private Profit' can be found here. More information on DTR from a Shropshire ...

Phoney consutation - don't mention the ARMS DEALERS

See letter below sponsored by the Welsh Assembly Government and METRIX which asks if you are maybe aware, that they are currently conducting an extensive programme of phoney public consultation on the proposals for the redevelopment of Ministry of Defence (MOD) St Athan. They tell us the development will chiefly consist of a new Defence Technical Academy, with associated housing and facilities, and an Aerospace Business Park so you will be amazed to learn that the key subjects
at proposed workshops will be focus on Transport and community facilities!

Don't mention ARMS DEALERS  like  RAYHEON or QINETIQ

or MERCENARIES or PRIVATISATION or

the £35 million spent so far or generating third party

income from spare capacity or training 

mercenaries to you and me.

There is the slight problem of the Ely Valley Road

which the Vale of Glamorgan Council has

twice rejected  proposals for a major new road

linking junction 34 of the M4 to Sycamore Cross.

The Welsh Assembly  Government seem to be the

driving force behind this, and it could be that

airport traffic is a smokescreen for improved

access to the Defence Academy at St Athan or

other developments in the south of the Vale.

Anyone concerned about the loss of the Vale

countryside may like to know that Vale MP

John Smith has already given assurance to

the Welsh Affairs Committee in the Commons

in support of the Metrix Bid for St Athan

"We have the total support of the local

authority ... many of the of those

planning and infrastructure considerations

have already been addressed by the body

that will be responsible for delivering them,

underwritten by the Welsh Assembly Government.

We are not going to have problems with green belt issues

and planning issues...."

(Hansard 23 May 2006, Q58)

Campaign against the Ely Valley Road

Consultation c/o QINETIQ Reaching out to the local

community!

 Letter to the public 

Dear Sir/Madam,

Please find attached a letter and invitation to a

series of workshops and interest

groups as part of the programme of public consultation

on the proposals for the redevelopment of Ministry

of Defence (MOD) St Athan. The subjects of the workshops

and interest groups have been identified through

feedback received at the public exhibitions as

key areas of interest to the local community.  

The first two

workshops will focus on Transport and Community

Facilities and the dates and

locations are as follows:

Subject: Community Facilities

When: Thursday 04 December, 18:30 - 20:30

Where: RAF St Athan Golf Club, Clive Road,

St Athan, CF62 4JD

                                                                           

Subject:Transport

When: Tuesday 09 December, 18:30 - 20:30

Where: The Gathering Place, Flemingston Road,

St Athan, CF62 4JH

These two workshops will enable attendees

to find out more detailed

information about the subject and allow the

St Athan project team to seek the

community’s views on specific elements

of the draft plan for the site’s

redevelopment.

Two interest groups looking at Environment

and Community Welfare will be held in

early 2009 and will provide an opportunity

for the project team to share further

details and capture attendees’ opinions

and views – details on these to be

confirmed at a later date.

Your views really do count (BUT WE HAVE ALREADY DECIDED)



and we hope that you will

take this opportunity to participate

in what should be a series of interesting and

productive events.  If you would like to attend,

we ask that you let us know

by 1st December.

If you have any questions in the meantime,



please do not hesitate to contact

us on 0845 618 0016.  You can also e-mail us at

enquiries@st-athanconsultation.co.uk or write

to us at Freepost

RRKG-AZTG-JLJX, Camargue (St Athan), 

Eagle Tower, Montpellier Drive,

Cheltenham, GL50 1TA

Yours Sincerely,

Gemma Rae

St Athan Project Phoney Public Consultation

Services

What they said then - Derek Twigg MP was Under Secretary of State for Defence before ‘affordability issues’ soaring costs and cutting the length of training courses by 25%.

What are the 'benefits' to the MOD of transferring risk to the private sector?

Derek Twigg MP, Under Secretary of State for Defence, talks to PSCA International's Matthew D'Arcy about what lies ahead in bringing a new flexible approach to learning through the Defence Training Review. “Partnership with the private sector does give us flexibility, and this is the key point here, to decrease or increase student throughput. The partner will be able to generate third party income from spare capacity and also dispose of surplus capacity. It also allows for a very important part of the role for industry to bring private sector management expertise and the ability to include significant capital investment at this stage. It is really about delivering a modern and flexible learning environment that will be fit for our service personnel of the future.”
Facilities key to defence trainingThe PPP Journal Issue 56 - Thursday, April 12, 200

From St Athan Project Phoney Public Consultation

Services

ST ATHAN – HOME OF THE DEFENCE TECHNICAL ACADEMY AND AEROSPACE PARK

Dear Sir or Madam,

As you may be aware, we are currently conducting an extensive programme of public consultation on the proposals for the redevelopment of Ministry of Defence (MOD) St Athan. The development will chiefly consist of a new Defence Technical Academy, with associated housing and facilities, and an Aerospace Business Park which, through the creation of new jobs and investment in the local and regional economy, represents an exciting opportunity for the area.

Having completed the first phase of consultation – public exhibitions held during July 2008 in St Athan, Cowbridge

and Llantwit Major – we are now pleased to announce that we will be holding a series of workshops and interest groups over the coming months. These events will provide an opportunity for us to discuss a number of topics in

more depth with members of the local community and you are warmly invited to attend one or more of them.

The subjects of the workshops and interest groups have been identified through feedback received at the public exhibitions as key areas of interest to the local community. The first two workshops will focus on Transport and Community Facilities and the dates and locations are as follows:

Subject When Where

Community Facilities Thursday 04 December RAF St Athan Golf Club, Clive Road, St Athan, CF62 4JD 18:30 – 20:30

Transport Tuesday 09 December The Gathering Place, Flemingston Road, St Athan, CF62 4JH

18:30 – 20:30

These two workshops will enable attendees to find out more detailed information about the subject and allow the St Athan project team to seek the community’s views on specific elements of the draft plan for the site’s redevelopment. Two interest groups looking at Environment and Community Welfare will be held in early 2009 and will provide an opportunity for the project team to share further details and capture attendees’ opinions and views.

Your views really do count and we hope that you will take this opportunity to participate in what should be a

series of interesting and productive events. If you would like to attend, please complete and return the enclosed form by 1^st December.

If you have any questions in the meantime, please do not hesitate to contact us on 0845 618 0016. You can also e-mail us at enquiries@st-athanconsultation.co.uk or write to us at Freepost RRKG-AZTG-JLJX, Camargue (St Athan), Eagle Tower, Montpellier Drive, Cheltenham, GL50 1TA

Yours sincerely,

Mike Grimmel Ed Bampton

Project Manager St Athan Project Director

Metrix UK Welsh Assembly Government

SAIN TATHAN – CARTREF I’R ACADEMI DECHNEGOL AMDDIFFYN A’R PARC AWYROFOD

Annwyl Syr neu Fadam,

Fel y gwyddoch mai'n siŵr, rydym ar hyn o bryd yn cynnal rhaglen eang o ymgynghoriadau cyhoeddus ynglŷn â’r cynigion ar gyfer ailddatblygu’r Weinyddiaeth Amddiffyn, Sain Tathan. Bydd y datblygiad yn bennaf yn cynnwys Academi Dechnegol Amddiffyn, gyda thai a chyfleusterau cysylltiol, a Pharc Busnes Awyrofod, a fydd, drwy greu swyddi newydd a buddsoddiad yn yr economi leol a rhanbarthol, yn gyfle cyffrous iawn i’r ardal.

Wedi cwblhau cam cyntaf yr ymgynghoriad - arddangosfeydd cyhoeddus a gynhaliwyd yng Ngorffennaf 2008 yn Sain Tathan, Y Bont-faen a Llanilltud Fawr - mae’n bleser nawr gennym gyhoeddi y byddwn yn cynnal cyfres o weithdai a grwpiau buddiant yn ystod y misoedd nesaf. Bydd y digwyddiadau hyn yn darparu cyfle i ni drafod nifer o bynciau mewn mwy o fanylder gydag aelodau’r gymuned leol ac estynnir croeso cynnes i chi fynychu un neu fwy ohonynt.

Detholwyd y pynciau dan sylw ar gyfer y gweithdai a’r grwpiau buddiant fel meysydd o ddiddordeb allweddol i’r gymuned leol o ganlyniad yr adborth a dderbyniwyd adeg yr arddangosfeydd cyhoeddus. Bydd y ddau weithdy cyntaf yn canolbwyntio ar Gludiant a Chyfleusterau Cymunedol ac mae’r dyddiau a’r lleoliadau fel a ganlyn:

Pwnc Pryd Ble

Cyfleusterau Cymunedol Dydd Iau 04 Rhagfyr Clwb Golff RAF Sain Tathan, Heol Clive, Sain Tathan, CF62 4JD

18:30 – 20:30

Cludiant Dydd Mawrth 9 Rhagfyr Y Man Ymgynnull, Flemingston Road, Sain Tathan, CF62 4JH

18:30 – 20:30

Bydd y ddau weithdy yn galluogi’r mynychwyr i gael hyd i fwy o wybodaeth fanwl ynglŷn â’r pwnc a chaniatáu tîm prosiect Sain Tathan i geisio barn y gymuned ynglŷn ag elfennau penodol o’r cynllun drafft i ailddatblygu’r safle. Cynhelir dau grŵp buddiant a fydd yn ystyried yr Amgylchedd a Lles y Gymuned ar ddechrau 2009 a darperir cyfle i’r tîm prosiect rhannu unrhyw fanylion pellach a chlywed barn a sylwadau’r mynychwyr.

Mae eich barn yn cyfri o ddifri a gobeithiwn y gwnewch fanteisio ar y cyfle hwn i gymryd rhan yn yr hyn a ddylai fod yn gyfres o ddigwyddiadau diddorol a chynhyrchiol. Os hoffech fynychu, a fyddech cystal â llenwi a dychwelyd y ffurflen amgaeedig erbyn 1 Rhagfyr.

Yn y cyfamser, os oes gennych unrhyw gwestiynau, mae croeso i chi gysylltu â ni ar 0845 618 0016. Gallwch hefyd yrru e-bost atom ar enquiries@st-athanconsultation.co.uk neu ysgrifennu atom yn Freepost RRKG-AZTG-JLJX, Camargue (St Athan), Eagle Tower, Montpelier Drive, Cheltenham, GL50 1TA

Yn gywir,

Mike Grimmel Ed Bampton

Rheolwr Prosiect Cyfarwyddwr Prosiect Sain Tathan

Metrix UK Llywodraeth Cynulliad Cymru

ST ATHAN – HOME OF THE DEFENCE TECHNICAL ACADEMY AND AEROSPACE PARK

WORKSHOPS AND INTEREST GROUPS

I would like to attend the following workshops:

Community Facilities

Transport

I am interested in attending the following interest groups and would like to be contacted when further information is available:

Environment

Community Welfare

	Specific topics I would like to see discussed in more detail at the workshops and interest groups are:

Please return to:

Freepost RRKG-AZTG-JLJX, Camargue (St Athan),

Eagle Tower, Montpellier Drive, Cheltenham, GL50 1TA

SAIN TATHAN – CARTREF I’R ACADEMI DECHNEGOL AMDDIFFYN A’R PARC AWYROFOD

GWEITHDAI A GRWPIAU BUDDIANT

Hoffwn fynychu’r gweithdai canlynol:

Cyfleusterau Cymunedol

Cludiant

Mae gennyf ddiddordeb i fynychu’r grwpiau buddiant a ganlyn a hoffwn petai chi’n cysylltu â mi pan fydd gwybodaeth bellach ar gael:

Amgylchedd

Lles y Gymuned

	Hoffwn petai modd trafod y pynciau hyn mewn mwy o fanylder adeg y gweithdai a’r grwpiau buddiant:

Dychwelwch at:

Freepost RRKG-AZTG-JLJX, Camargue (St Athan),

Eagle Tower, Montpellier Drive, Cheltenham, GL50 1TA

Public Services NOT Private Profit

New group on facebook - and the 1st meeting of Cardiff Public Services NOT Private Profit
is set for the evening of 3rd December.

Meeting will take place at the Welsh Assembly.

Leanne Wood AM is confirmed to speak, more speakers to be announced.

A chance to make your views known and put the privatised military academy on the agenda. The topic that our politicians want to avoid most!

Organised by Marianne Owens, on behalf of Cardiff Public Services NOT Private Profit