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The way to Wembley

Agenda

Wembley was once the Holy Grail for football teams the length and breadth of the nation, if not the world. It is now a laughing stock.

Why was there only one bidder to rebuild it? Why is the National Audit Office expected to investigate? David Rogers finds out just how the mighty have fallen

IS IT ANY WONDER the Tories have called the rebuilding of the national stadium at Wembley a 'laughing stock' when the author of the government report into the project feels the need to emphasise there was no criminality associated in the awarding of the contract?

David James, the government's favourite troubleshooter and the man sent to rescue the Millennium Dome, even seems confused in his report about whether Multiplex, the Australian firm awarded the contract, is the preferred contractor or something else. In the document, which has spent the past five months with culture secretary Tessa Jowell, he wrote: 'On September 1, 2000, Multiplex was appointed preferred contractor (possibly contractor; the legal status of their appointment is uncertain).'

But if any project should have been squeaky clean during the procurement process, it was this one: the one that received £120 million of Lottery money and now seems certain to be the subject of a National Audit Office investigation. Even Mr James suggests he would be surprised if the NAO didn't get involved in the bungled job.

Last December he told Sir Rodney Walker, then chairman of Wembley National Stadium Ltd (WNSL):

'The process adopted by WNSL could give rise to censure by the NAO in the event they subject the Wembley project to review, as we believe they are entitled to do.'

Mr James's comments in a letter to Sir Rodney, who had replaced previous chairman Ken Bates at the end of 2000, are even more damning.

'There is no evidence, ' Mr James wrote, 'of any criminality or impropriety having occurred to date in this matter but there is no means by which all questions or propriety can be eliminated to the extent that the contract would be regarded as 100 per cent 'safe'.'

The fact that Mr James felt compelled to write this at all says something about how far the project had sunk into the mire.

What should have been a flagship job has turned into a fiasco. An 'iconic project', as Multiplex director Ron Kofoed called it in September 2000 when it was named preferred bidder, which should have had contractors champing at the bit, ended up attracting just one bid.

Some had long decided that working for WNSL was not compatible with the industry's attempts to foster better working relationships between client and contractor.

The reason is best summed up by one contractor that had shown interest in the scheme but decided against formally bidding for it.

This particular firm said last summer: 'WNSL tried to buck the industry and said 'we're not going to listen to you, we'll do it our way'. That's why they only got one bidder.

There was no real competition in the tendering process because nobody wanted to work for them.'

The problem with the Wembley project was that the client was a one-off: the kind contractors now try to avoid.

But what firm with stadium experience was not going to look at the chance - the once-in-a-lifetime chance - to rebuild the most famous sporting venue in the world?

WNSL knew that and was determined to secure the most advantageous contract it could squeeze out of any firm.

Quite reasonably, contractors were attracted by the chance to say 'We built that.' All they wanted was the opportunity to build the stadium, complete it on time and make a bit of money - not necessarily a lot (this is contracting after all) but at least some profit.

The client gets a first-class venue, completed on time and the contractor makes money. Simple, if everything followed best practice procedures.

In arriving at his decision as to whether this was an example of best practice, Mr James is clearly conscious of the sensitivities of the key players and employs diplomatic language, disguising individuals in his report with an asterix. His conclusion? It was not.

The report reads: 'The process by which the tender was offered and the contract negotiated does not follow best practice and the WNSL board may feel it appropriate to accept a strong measure of criticism for their failure to oversee this responsibility correctly.'

He added: 'The failure of WSNL's board to address possible conflicts of interest is apparent from the comments which have been made in several interviews that there was a perception in the construction industry that the process had not been entirely fair.

'The commercial risk of allowing a loss of confidence by the market in the fairness of the process is that it results in a poor response from the market and therefore a less competitive tendering process.'

That explains why there was only one bid.

In his evidence, Mr James says that during the compilation of his report he had come across 'comments made at interviews held by us [suggesting] that, before any formal tender process was launched [*] and possibly others at WNSL had apparently been somewhat 'seduced' by MPX [Multiplex] and the deal which it appeared to be offering.'

What Multiplex 'appeared to be offering' was an enviable track record. It had, after all, completed Stadium Australia in Sydney, the centrepiece of the 2000 Olympic Games. Allied to its 'can-do' attitude and the spectre of the Millennium Stadium in Cardiff, where Laing ended up losing at least £40 million, Multiplex was a strong runner.

But where Multiplex appeared to be most attractive to WNSL, the report says, was in what it was able to deliver financially.

Mr James stated: 'The terms which MPX appeared to be offering were significantly more attractive in terms of cost and risk allocation from those which it was believed were available from UK or European contractors.'

He added: 'MPX's proposal was more likely to satisfy the requirements of the banks that were to be asked to fund the project as it appeared to place most of the risk on the contractor.'

So why would Multiplex want a high-profile job such as this, and all the attendant baggage that it carries, and take on a scheme seemingly fraught with the kind of risk others believed had been consigned to the dark ages of contracting?

Well, until then, its presence in this country had been relatively minor. Its only major job had been to carry out work at Stamford Bridge, the home of Chelsea Football Club - chaired by Mr Bates.

So the chance to rebuild Wembley was the chance it had been waiting for. As Mr James put it: '[*] and MPX were intent on winning the project to establish a presence in the European market.'

So where do we go from here? Thus far it has been a monumental cock-up, but the project to build the national stadium at Wembley is sure to get the green light, if only to prevent it going anywhere but London.

According to the report, if Wembley does not go ahead WNSL will have to pay back the £120 million Lottery money 'at a level which does not lie within the immediate capability of the company. Such a situation clearly creates a risk of imminent financial collapse and bankruptcy and the ultimate inability to honour the obligation to repay the value of the £120 million'.

'Plough on regardless' seems to be the watchword.

The whole process has been flawed, of that there is no doubt. But Multiplex can do a good job - its past experience in this sort of work testifies to that.

But remember: the last proposed completion date for Wembley, before things went spectacularly off the rails, was spring 2003.

Things have moved on, other stadium jobs have been let and built. And some contractors can be content in the knowledge they won't ever have to deal with WNSL again.

Football Association pins its hopes on German bank deal THE FOOTBALL Association is hoping this week to sign a heads of agreement with German bank Westdeutsche Landesbank to secure the £400 million-plus needed to finance the rebuilding of the stadium.

A spokesman for Wembley National Stadium Limited said it was hoping a contract with the bank could be signed by the end of July, with work to start immediately. Early work has begun with Stent sinking some test piles and asbestos removal by Griffiths McGee.

In a House of Commons statement last week, culture secretary Tessa Jowell said Westdeutsche Landesbank's involvement was the 'last chance' for the £715 million scheme. She added: 'This is not yet a done deal.' If it failed, she added, talks should start on the rival Birmingham bid.

She ruled out refurbishing the existing stadium, describing any reopened Twin Towers site as 'substandard' and likely to cost around £40 million.

If an agreement is struck with the German bankers, the first contractor to get on the Wembley site proper will be demolition contractor Griffiths McGee. It will also carry out the groundworks.

Others earmarked for big trade packages are steelwork firm Cleveland Bridge, which nipped in ahead of William Hare and Dutch joint venture partner Hollandia after Multiplex failed to reach agreement with them.

Also on the team sheet are piling contractor Stent, concrete specialist PC Harrington, while Emcor Drake & Scull has the mechanical and electrical package. It will be project managed by Symonds.

As Ms Jowell pointed out, all the while a rival bid for the stadium remains in the wings.

Paul Spooner, project director of the National Stadium, said this week: 'Birmingham's plan remains ready to go. On every assessment, our project represents best value for money.'

Birmingham's rival bid has parking for 7,000 cars and 500 coaches and the cost of the 85,000-seat venue has been put at £324 million. It will include 120 hospitality boxes and 2,000, 750, 500 and 250-seat banqueting halls.

Supporters of the Birmingham scheme believe Wembley has been given special status. They point out that the government's April 30 deadline came and went without the FA's Wembley finances in place.

A spokesman for the Birmingham bid said it was not acceptable that more than three weeks since that original deadline had passed with no firm signs of progress.