Leaked MOD memo bad news for St Athan

Leaked Memo Indicates That DTR Is a Go

Yesterday Defence Management reported that the outgoing second permanent under secretary of state for defence has ordered Package 1 of the £11bn training programme to move forward at the Welsh site despite resistance and doubts over the programme’s viability:

A leaked memo from a high ranking MoD official has revealed that the Defence Training Review (DTR)is set to carry forward at St Athan, Wales, despite the troubled economic climate, faulty business plan for raising revenue and widespread resistance from the affected MoD civilians employees and the union that represents them.

In a leaked memo seen by Defence Management, it has been revealed that Sir Ian Andrews, the outgoing second permanent under secretary of state for defence has ordered Package 1 of the £11bn training programme to move forward at the Welsh site despite resistance and doubts over the programme’s viability.

There has been resistance to Sir Ian’s final objective for sometime. RAF Cosford, which narrowly lost out to the St Athan facility, has been viewed as a more viable alternative because of its central location and the fact that it already has much of the infrastructure in place for training. Civilian trainers are widely resistant to moving to rural Wales to conduct the training. Furthermore, the financing of the DTR site has been rocked by the shaky economy. The Metrix led consortium had planned to fund the project through the sale of surplus MoD land but with the housing market hitting rock bottom, predicted revenues are now substantially less than first believed. Rising inflation has led to a ballooning of costs to £12bn.

The memo indicates that Sir Ian is willing to proceed with the St Athan site despite the above mentioned concerns. He wants to commit to Metrix and St Athan . Developing a contingency plan would show that the MoD has doubts the memo implied.

Recently some MoD officials admitted that the plan was unaffordable in its current state and that Metrix would have to submit a new business plan in order for the deal to move forward.

The contents of the memo were later revealed in an e-mail to staff at RAF Cosford in an e-mail. However the MoD failed to inform the Public and Commercial Services (PCS) union which represents most of the affected civilian trainers.

Robert O’Harney, the Cosford branch secretary for the PCS said he was disappointed by the MoD’s willingness to leave the union out of the communications loop. He vowed that the union would continue fighting the DTR at St Athans because it was “unaffordable.”

The MoD strongly denied that any decision had been made. A spokesperson refused to comment on the leaked memo, but said: “A recent routine review has confirmed the Department’s commitment to delivering the DTR Package 1 Project and the Defence Technical Academy at St Athan.

“A final clarification exercise is now ongoing, after which Metrix’s revised proposals will be evaluated and considered for final approval.

“The MoD and Metrix are committed to an ongoing programme of consultation and communication with the local community.”

Armed forces minister Bob Ainsworth will make a statement to the Commons on 9 October regarding DTR SIr Ian said.

Why would this go ahead now! Would it be a desperate move by new labour to save the face of a Rhodri Morgan and John Smith AM ...even if they don't realise this is more an election liability.. than anything else....so they will shoot themselves in the foot...

Credit Crisis Squeezes Defence Training

Credit Crisis Squeezes Defence Training

Published by Cheryl under Cosford, MoD, Uncategorized

Staff affected by the Defence Training Review recently found out from an article in the Financial Times that:

Charles Barrington, chairman of Metrix, told the Financial Times that the turmoil in the credit markets had forced the consortium to abandon its original plan to raise up to £1bn through a bond issue.

“The bond market is not conducive at the moment so we are looking at a bank solution,” he said.

The project had, however, already secured the support of a group of banks in principle, he stressed.

A final decision on which funding route to go down would not be made until the programme was closer to completion.

Mr Barrington expected the MoD to give its final sign-off on a full investment decision early next year, later than originally expected.

The full article can be viewed here.

Credit crisis squeezes defence training

By Sylvia Pfeifer, Defence Industries Correspondent

Published: August 29 2008 03:00 | Last updated: August 29 2008 03:00

Fresh concerns have been raised over an £11bn training programme for the military - one of the government's largest private finance initiatives - after the fall-out from the credit crunch raised its cost by nearly 10 per cent in less than 20 months.

The Defence Training Review (DTR) will centralise all non-military technical training for army, navy and air force personnel in one academy, at St Athan in the Vale of Glamorgan.

The first part of DTR, a 30-year PFI programme to train military engineers, was awarded to a consortium called Metrix, led by Qinetiq, the defence research group, in January 2007.

But the economic downturn has contributed towards increasing the cost of the programme to £12bn. The Ministry of Defence said the increase "is due to the impact of inflation and borrowing costs and the current economic climate, not just directly associated with cost growth".

Separately, Charles Barrington, chairman of Metrix, told the Financial Times that the turmoil in the credit markets had forced the consortium to abandon its original plan to raise up to £1bn through a bond issue.

"The bond market is not conducive at the moment so we are looking at a bank solution," he said.

The project had, however, already secured the support of a group of banks in principle, he stressed.

A final decision on which funding route to go down would not be made until the programme was closer to completion.

Mr Barrington expected the MoD to give its final sign-off on a full investment decision early next year, later than originally expected.

Concerns about the affordability of the programme, given the MoD's severe budget crisis, persist. Last month Bob Ainsworth, armed forces minister, admitted to MPs that "this is taking longer than is ideal". He added that "financial appraisals have thrown up some difficult issues".

Mr Barrington said Metrix was working hard to give the MoD "a project that will meet its affordability gap under its constrained circumstances".

"The MoD is operating not only in an operational environment it has not seen for a generation, but also operating in a budgetary environment that it has not seen for a generation," he said.

There was no indication the programme would not happen. "This is a nationally important project. You only need to consider the value of trained personnel to the current operational army to realise how important technical training is."

The programme has proved highly political since its inception. The competition pitted Wales against the West Midlands to secure the main base for the contract. A bid from a rival consortium would have based its training at RAF Cosford and some of its personnel will now have to move to Wales.

The consortium received a pre-contract award of £9.5m from the MoD in the spring, which is being used to develop a transition plan and start work transforming the training courses.

At any one time, some 6,000 students are going through training and around 1,100 courses are taught every year. There are currently nine different training sites.

Public consultation for the planning process started a few weeks ago. Construction at the site is due to begin in 2009 and be completed in 2013.

Copyright The Financial Times Limited 2008