largest ever pfi approved

Don't forget the contract has not been signed yet! From an article in the Times 'The contracts that are near to being signed include the Defence Training Review, a £12 billion PFI which all army training will be centralised at one base in Wales.The contract has been awarded to a consortium that includes QinetiQ, the defence research company, but the final sign-off keeps slipping amid rumours that the MoD is unhappy about the price.' Howard Wheeldon, senior strategist at BGC Partners, a City brokerage firm, said: “There is not a single defence project that cannot be cancelled between now and the end of the defence review, so I can understand why the industry is pushing its case to get them signed as soon as possible.” St Athan is also faced with green meadows being seized for a northern access road and housing (www.wix.com/stathan/stag), because brownfield land within the base is reserved for aerospace aspirations. And Welsh taxpayers are to pay the £20 million for unneeded roads, under WAG’s contract with Metrix for the Defence College. At least, there is to be an Inquiry into Compulsory Purchase Orders, where WAG’s steamroller can be challenged. http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article6848237.ece

fROM THE TIMES

Defence companies push Government for contracts
http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article6848237.ece
David Robertson
The defence industry is pushing the Government to sign equipment contracts worth up to £20 billion in the next few months, in an attempt to prevent the projects becoming a victim of cost-cutting next year.

Industry insiders have told The Times that intense lobbying pressure is being brought to bear on the Ministry of Defence (MoD) in the hope of getting big deals signed quickly.

The companies are concerned that if equipment contracts are delayed, they will be caught up in potentially severe budget cuts after the election.

Even those projects that survive the cuts are likely to be swallowed up by the Strategic Defence Review, to which both Labour and the Conservatives are committed. This is likely to delay procurement by at least 18 months after the election.

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Among the contracts that are nearing completion but could be under threat if delayed is the £5 billion Private Finance Initiative (PFI) to replace the country’s search-and-rescue helicopters. Two consortiums are bidding for the 30-year contract, with Lockheed Martin, BIH and VT Group offering a Eurocopter, while Thales UK, CHC and Royal Bank of Scotland are offering a Sikorsky.

“All companies try to get their projects through before a general election because of uncertainty about whether they will be backed by a new government,” a senior defence industry insider said. “This year it is even more critical. We all know there are big cuts coming and nobody wants a project they have spent years getting to the point of signing a contract cancelled at the last moment.”

There are at least eight large projects awaiting final clearance by the MoD, totalling nearly £20 billion in value. Defence analysts say it is highly unlikely that they will all be signed in the months before a May election.

The contracts that are near to being signed include the Defence Training Review, a £12 billion PFI which all army training will be centralised at one base in Wales.The contract has been awarded to a consortium that includes QinetiQ, the defence research company, but the final sign-off keeps slipping amid rumours that the MoD is unhappy about the price.

Howard Wheeldon, senior strategist at BGC Partners, a City brokerage firm, said: “There is not a single defence project that cannot be cancelled between now and the end of the defence review, so I can understand why the industry is pushing its case to get them signed as soon as possible.”

Other projects include a £2.7 billion contract for A400M military transport aircraft, which is due to be signed at the end of
this year. The Conservatives have already questioned whether this could be cut, but Lord Mandelson, the Business Secretary, is understood to have backed the A400M deal as it will protect Airbus jobs in the UK. This is, therefore, considered one of the few projects that is safe.

The Royal Navy is hoping to buy refuelling ships in a £2.5 billion deal, but analysts have speculated that the MoD may try to save money by cancelling this project and leasing ships instead.

Another deal likely to be signed is the Future Rapid Effects System (FRES), an armoured vehicle for the Army. The original plan was to buy 3,000 vehicles costing £12 billion, but the MoD is now hoping to have signed a contract by February for 600 costing £2 billion. This may result in a decision to axe a pending £900 million contract to upgrade the Warrior armoured vehicle, which FRES will eventually replace.

A spokesman for the MoD said: “We engage regularly with the defence industry ... but our priorities are led by the current and future requirements of the Armed Forces. Our top priority remains Afghanistan.

“We continue to invest in defence equipment to meet the needs of current operations and to provide the capabilities needed for the future.”

BAE seals shipyard deal

• BAE Systems, Europe’s largest defence company, took full control of what remains of Britain’s shipbuilding indu
stry yesterday with the acquisition of BVT.

VT Group, the former Vosper Thornycroft, sold its 45 per cent shareholding in BVT for £346 million, ending 150 years of shipbuilding heritage.

• BAE and VT merged their shipbuilding assets last year in a deal that created BVT. The partnership contains three shipyards: Scotstoun and Govan, on the Clyde in Glasgow, and Portsmouth.

• VT will inject £43 million into the business to reflect lower than expected revenue from an export order to Trinidad and Tobago. Negotiations over how much compensation VT should pay for the Trinidad contract held up the final sale for several months.

• VT will now concentrate on its growing support services business, which manages contracts in areas such as nuclear decommissioning, waste management and facilities management

Largest-ever PFI 'approved' New Civil Engineer - London,England,UK ... Armed Forces in south Wales - known as the 'Defence Training Review' have been approved. The plans are to be funded under the largest-ever PFI deal. ... St Athan Defence Technical College plan approved by councillors WalesOnline - Peter Collins - ‎2 hours ago‎ THE £12bn project to build a Defence Technical College in South Wales was last night approved by planners. The scheme, which is the biggest single ... Defence academy plan is approved BBC News - ‎5 hours ago‎ Planning permission for a new defence training academy which will create thousands of jobs in the Vale of Glamorgan, has been granted. ... Fears over future of Girlguiding in South Wales WalesOnline - Peter Collins - ‎Sep 24, 2009‎ GIRL Guides groups across South Wales are facing closure because of a shortage of volunteer leaders, the organisation has warned. ... St Athan project will put Wales on world map – where it belongs WalesOnline - ‎Sep 23, 2009‎ TODAY, planning permission will be decided on the largest public sector project ever in Wales – the £13bn Defence Technical College (DTC) on the 1000-acre ... Green light for £13bn military academy Builder and Engineer - ‎2 hours ago‎ Plans to build a £13bn military academy in South Wales to train Armed Forces personnel have been given the go ahead. Construction work is due to begin at ... Vale of Glamorgan councillors back plans for £13 billion military ... 24dash - ‎3 hours ago‎ Plans for a major military academy to train Armed Forces personnel were given the go-ahead. Building work is expected to start at the former air base in St

MP formally objects to increasing costs of defence training review

24 February 2009 : Parliamentary Debate
MP formally objects to increasing costs of defence training review
Mark Pritchard (The Wrekin) (Con): On a point of order, Mr. Speaker. You will know the rules concerning the reporting of contingency liabilities: no contingent is allowed to proceed without examination if a Member of this House formally objects. Given that the Ministry of Defence suggests in a departmental minute dated 17 February that it is looking to increase the initial contingent liability on the defence training review project from £9.5 million to a staggering £40 million, without any ministerial statement, may I ask that it be put on the record that I am formally objecting to this MOD minute and new contingent liability?
Mr. Speaker: The hon. Gentleman has put the matter on the record, and I shall leave it at that.

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 ...

Pritchard has called the privatisation of military training " a privatisation gone too far."

latest article from http://www.defencemanagement.com/news_story.asp?id=7335

No DTR announcement, delays inevitable
13 October 2008

The MoD has been accused of further delaying an announcement on the Defence Training Review (DTR) after armed forces minister Bob Ainsworth avoided confirmation of the move of package 1 to St Athan, Wales.

Last month Defence Management saw a leaked MoD memo confirming that despite resistance by staff to the move to rural Wales, cost overruns and fears over privatising defence training, the MoD was pushing ahead with the first part of the training- known as package 1. Ainsworth was scheduled to make an announcement last week, but avoided doing so when he came under intense questioning from one of the chief opponents of the move.

MP Mark Prithchard questioned the rising costs of the programme which have ballooned by £1bn in less than a year to £12bn. Ainsworth defended the programme, but admitted that even the cost of the alternatives was now escalating.

"We still have an affordable package that is far cheaper than the alternatives, and that has been worked on over the summer. We will be able to go ahead with defence package 1 and get value for money out of those proposals," Ainsworth said.

Later though he admitted that no financial agreement would be in place until next spring, a delay of a year since the package 1 was awarded to Metrix and by six months from the most recent target date for an announcement on the progression of package 1.
The PCS Union has been a staunch opponent of the DTR’s move to Wales and the privatisation of military training. Officials pointed out that the MoD had now admitted that the cost of package 1 and its alternatives were growing out of control. An unofficial PCS blog made it clear the union would continue to resist the DTR.

"This is another first for the DTR programme in suggesting that the "fallback posistion" is more expensive than the proposed move to St Athan !! No wonder the Department needs to give Metrix another six months grace to rearrange costings to fit. PCS will continue to campaign against this looming financial disaster," PCS Shropshire said.
PCS Branch Manager H O’Harney said that the non-announcement was not a surprise, considering that RAF Cosford staff had already waited six months: "A £12 billion PFI carrying on in this current financial crisis seems ridiculous given the risks and affordability issues. Our members at Cosford have made it clear that they have no intention to move Wales and the risk to the training of the Armed Forces is still real. It would appear that the MoD want to privatise at all cost despite the huge risks."

The crumbling economy and the downturn in the property market have taken their toll on the DTR. The Metrix consortium originally planned to fund the new training centre in Wales through the sales of excess MoD estates that would be freed up when staff moved to St Athan. But the downturn in the property market threw off the entire business plan and financial support for the programme, forcing Metrix officials to examine another way to fund the programme.

To add to the programme’s woes, civilian trainers from RAF Cosford, the base which lost out to St Athans for the training contract, have been resistant to moving from the suburban West Midlands to rural Wales. There have also been concerns over the preservation of the military ethos since the training will be privatised instead of being run by MoD staff and military personnel.

Pritchard has called the privatisation of military training " a privatisation gone too far."

St Athan latest news - next meeting

1.Next meeting Mon 8th Sept 6pm Temple of Peace

2.Cosford letter to audit office

3. MP Calls for St Athan Rail Stop (oh yeah!)

4. Defence Training Review Over Budget

5. See the Private Eye article ...

The full article can be viewed here.

1. Look forward to seeing you at the next meeting at Temple of Peace 6pm Mon 8th Sept...please send items for the agenda.

2. Cosford letter to audit office

please download or use this copy below and send in and a copy to your AM and MP would be useful

Telephone Please reply to:

INSERT YOUR NAME AND ADDRESS

To: Tim Burr
Comptroller and Auditor General
Private Office
National Audit Office
157-197 Buckingham Palace Road
London
SW1W 9SP _______________________________

DEFENCE TRAINING REVIEW COSTS TO DATE

Dear Mr Burr,

I am writing to you concerning Package One of the Defence Training Review (DTR) Transformation programme, which is a programme worth some £12 Billion allegedly. It will be one of the most expensive PFI/PPP’s project ever undertaken by the Ministry of Defence and will be amongst the largest partnering arrangement ever undertaken in the United Kingdom and yet to date the NAO has never reported on this matter. I am extremely concerned about the escalating cost to the taxpayer that this project is incurring. I am aware to the vast amount of money being spent on consultants, some of whom are being paid at £1200 a day. The contract’s length of 30 years and the unheard of first breakpoint at fifteen years is a recipe for spiralling costs and a major impact upon the public purse.

I believed the MoD option selected for delivery of defence training would depend upon what is best for defence, combining both operational and value for money considerations. Work on this programme has been going on since 2001. To date every deadline has passed with announcements of further delays, which must increasingly mean additional expenditure of public monies. In July 2008 in the House of Commons, Minister Bob Ainsworth said “the financial appraisals have thrown up some difficult issues” ! He also talked about “affordability issues”, presumably the same “affordability issues” as mentioned by his predecessors Tom Watson, Don Touhig and Ivor Caplin who also knew that this programme is unaffordable.

You should also be aware that public monies were spent on Package 2 of DTR in trying to get a PPP/PFI solution, only for this to fall apart on “affordability issues” How much public money was spent on this failure and considering that the MOD have just given another few hundreds of millions pound to Package 2 to develop a different approach, it is disturbing to know that you have never audited the accounts of the MoD on this matter. Indeed your own literature states”The role of the National Audit Office is to audit the accounts of all government departments and agencies as well as a wide range of other public bodies, and report to Parliament on the economy, efficiency and effectiveness with which these bodies have used public money.”

Therefore I would request that as a matter of urgency the NAO conduct an enquiry or investigation into this programme as you had originally timetabled for in 2008/2009.

I look forward to your reply.

Yours sincerely,

.............................................................

3. MP Calls for St Athan Rail Stop

Published by Cheryl under Cosford, MoD

Yesterdays article reported that the cost of the Defence Trainining Review had now increased by £1bn to £13bn. An article on WalesOnLine reports that Vale of Glamorgan MP John Smith is calling for a dedicated rail stop to be built at St Athan, which will add more cost to the project. He thinks this will benefit the Welsh economy and ease congestion:

A DEDICATED rail stop should be built to serve the Defence Technical Academy in St Athan, Vale of Glamorgan MP John Smith has said.

Thousand of trainees from the Army, Royal Navy and Royal Air Force will attend the £13bn academy.

Mr Smith said: “In order for the Welsh economy to take full advantage from this record investment, the St Athan site must be served by an improved transport system.

“There are operational railway tracks running within very close proximity to the site. I believe there is a very strong case for building a dedicated rail stop at the academy. It will help reduce road traffic congestion, and prevent commuters and visitors to the academy the inconvenience of having to get off at Rhoose or Llantwit Major stations and transfer to a bus shuttle service.

“I will be writing to the Welsh Assembly Government, the local planning authority and the consortium responsible for building the academy asking them to consider building a rail halt at the site for the good of the Welsh economy.”

In addition WalesOnLine reports that a proposed road link that will service St Athan could cost up to £135m of tax payers money. Currently there are approximately 600 Civil Servants plus many military and private sector workers employed at RAF Cosford, the majority of these staff would be expected to move from Cosford to St Athan if the Metrix plans go ahead. Cosford is situated 800 meters from a motorway and already has it’s own railway station.

Is it right that so much taxpayers money is needed to support the Metrix bid is surely a question that needs to be asked. This is another reason that we are asking members to write to the NAO and get them to scrutinise this project which has already cost the tax payer millions in wasted consultant fees.

• NAO letter template (download).

No responses yet

Aug 22 2008

4. Defence Training Review Over Budget

Published by Cheryl under Cosford, MoD

The latest edition of Private Eye reports that Brigadier Geoff Nield has let it slip that the cost of the Defence Training Review programme had gone up and is now over budget.

At a local “Stakeholders” meeting in the Vale of Glamorgan, home to a proposed new defence academy, the Ministry of Defence’s officer in charge, Brigadier Geoff Nield, let slip that the price had gone up from £11bn to £ 12bn. As the deal was slated to save the MoD just £400m at the old price, it seems the scheme will not only expose the armed forces to serious operational risks (see Eye 1213) but will actually cost the taxpayer hundreds of millions more than keeping training in-house.

The increasing delays to implementing the project has led to the National Audit Office (NAO) pulling its plans to investigate the deal. Members are encouraged to write to the NAO requesting that they undertake a review of the public monies spent on DTR. There is a link to a sample letter below, this can be amended as you feel fit.

• The full article can be viewed here.
• NAO letter template (download).

St Athan Spin

the reply to a letter to the St Athan Consultation regarding ethical concerns around the role of Raytheon in the Metrix Consortium. (see below). It echos the line of the Welsh media and politicians.

Dear

Thank you for your email regarding Raytheon and its role in the Defence Technical Academy (DTA).

In the first instance, I would like to reassure you that Raytheon does not manufacture cluster bombs or any associated delivery vehicles. Any assertion to the contrary is based on dated information that is no longer correct. In addition, Raytheon has excellent relations with the Norwegian Government and continues to deliver a wide range of products to them, none of which are related to cluster munitions.

In context of the DTA, Raytheon Professional Services, the company’s training arm, will be involved in providing technical training to DTA personnel in aeronautical and electro mechanical engineering and communications/IT disciplines.

Raytheon Professional Services is well practised at delivering training around the world, in both the private and public sectors, and its clients range from NASA to General Motors. I hope this addresses your concerns, but if you have any further questions then please do not hesitate to be in touch using one of the following methods below.

Kind Regards,

Gemma
St Athan Project Public Consultation Services Call: 0845 618 0016

Write to:Camargue Group Ltd, Freepost RRKG-AZTG-JLJX,St Athan Consultation
Eagle Tower,Montpellier Drive,Cheltenham,GL50 1TA

Email: enquiries@st-athanconsultation.co.uk
Visit: www.st-athanconsultation.co.uk

Companies Excluded from the Investment Universe

...Defence and Space Company) EADS Finance BV General Dynamics Corporation L3 Communications Holdings Inc. Lockheed Martin Corp. Raytheon Co. Thales SA. The press release from the Ministry of Finance The recommendation from the Advisory Council on Ethics

(Ministry of Finance, 03.02.2007)

Recommendation on Exclusion of Cluster Weapons from the Government Petroleum Fund Oslo, 16 June 2005

postmottak@fin.dep.no;

...Corp, L3 Communications Holdings Inc, Raytheon Co, Lockheed Martin Corp, Alliant Techsystems...from the Government Petroleum Fund. Raytheon Company produces, according to its own web-site, 3 http://www.raytheon.com/products/stellent/groups/public..

(Ministry of Finance, 02.09.2005)

Norway excludes 3 arms producers from oil fund [Reuters]

Read the recommendation here (pdf)

The Ethical Guidelines List of Excluded Companies

Recommendation on Exclusion of Cluster Weapons from the Government Petroleum Fund- The Advisory Council on Ethics for the Government Petroleum Fund recommends that the companies General Dynamics Corp, L3 Communications Holdings Inc, Raytheon Co, Lockheed Martin Corp, Alliant Techsystems Inc, EADS Co (European Aeronautic Defense and Space Company) and Thales SA be excluded from the Petroleum Fund because they are presumed to be involved in production of cluster weapons.

Serco Group Plc should be kept out of Wales because of its involvement in the production of nuclear weapons.

Why are our politicans not calling for the government to have ethical guidelines for investment like Norway.

Council on Ethics- Norwegian Government Pension Fund – Global - Read more here : http://www.regjeringen.no/templates/Kampanje.aspx?id=434879&epslanguage=EN-GB

The role of the Council on Ethics for the Government Pension Fund - Global is to provide evaluation on whether or not investment in specified companies is inconsistent with the established ethical guidelines. The Ministry of Finance makes decisions on the exclusion of companies from the Fund's investment universe based on the Council's recommendations. Both the Ministry's decisions and the Council's recommendations will be made publicly available on this website.

Recommendation on the exclusion of the company Serco Group Plc. The company is recommended for exclusion because of its involvement in the production of nuclear weapons.

As we have been saying for years...Serco - one to watch http://www.aldermaston.net/campaigns/serco_2004.php

Plans for St Athan Academy are hit

Ministry of Defence | Defence News | Ainsworth: Defence training ...

Mr Ainsworth also told Parliament that the MOD will continue to consider a range of options for the solution to Package 2, which aims to deliver high quality training in the functions of logistics and personnel administration, police and guarding, security, languages, intelligence and photography. To be able to consider all options for procurement fully without legal constraints, it has been decided to remove the 'Provisional Preferred Bidder' status from Metrix.

GNN - Government News Network Armed Forces Minister Bob Ainsworth said: ... In a statement to Parliament on the Defence Training Review (DTR), Mr Ainsworth said the Government continued ...

Blow for £15bn St Athan academy PART of a huge £15bn defence training academy ear-marked for St. Athan in the Vale of Glamorgan is being ditched Read

Base loses some defence training BBC News, Plans to relocate some defence training to St Athan in the Vale of Glamorgan have been dropped, the UK Government has announced. Ministers say the private ...

Plans for £15bn St Athan academy are hit ic Wales, PART of a huge £15bn defence training academy ear-marked for St. Athan in the Vale of Glamorgan is being ditched The two-part project would have seen all UK ...

Villagers Voice their fears Echo Jan 29 Growing concerns about the impact of the multi-million pound Defence Training Academy at St Athan are to be discussed by councillors in Cowbridge. Plaid Cymru AM Chris Franks has a greed to meet members of Cowbridge and Llanblethian Town Council to discuss transport schemes in the rural Vale especially those that will be needed to service the new academy .