Tuesday, August 02, 2011

Insult to injury?

Perhaps one of the least-loved figures in London is Bob Crow, he of the RMT, whose predilection for industrial action has caused endless misery. Thus, we would struggle to find anything on which we would commend him, although on the Thameslink contract, he has a point.

He and his colleagues have "blasted" the Government for spending £15 million of taxpayers' money on consultants for the rail contract which was then awarded to Siemens, with Crow saying that the consultancy costs "added insult to injury".

The information he is working on comes in a written letter from rail minister Theresa Villiers, who has admitted that, "From May 2008, the department has spent approximately £13.1million (excluding VAT) to date on specialist consultants and advisers to evaluate the Thameslink Rolling Stock project".

She continues: "This resource has included financial, procurement, technical, legal, planning and other specialist advice required to deliver the Thameslink Rolling Stock Project, which is one of the largest rolling stock orders in the country. Of this figure, £5.3 million has been spent since May 2010" – i.e, since the election.

But what is now emerging is that, according to the EU rules which la Villiers says she has obeyed, and on which the government has so expensively paid for advice, the contract need not have been given to the German firm. Thus comes via the Derby Telegraph, which has Siemens heavily involved in worldwide corruption, which could have barred the company from the competition during the tendering process.

While Siemens was bidding for Thameslink, it was fined a record $800 million in the USA and €395 million in Germany over bribery charges, in addition to another 201 million euros it paid out in 2007. It was barred for two years from bidding for contracts from the World Bank.

Kevin Bampton, Head of Law at Derby University, now says: "If they don't think that enough has been done to resolve the corruption issue, it is not just that they could change the decision now – they SHOULD change the decision now". This is especially the case that a further potential bribery case was discovered at Siemens' business unit in Kuwait.

Needless to say, the Department for Transport (DfT), is trying to dead-bat this issue. Officials are claiming laws allowing them to exclude bidders from contract competitions only apply to individuals, not whole companies like Siemens. No individuals involved in corruption, it says, had been part of the Thameslink bid. But University of Hull's law expert Chris Bovis reckons the DfT's interpretation of the EU rule "defies belief". And Bampton says that the Government may have "misdirected" itself in law.

There lies the ultimate irony. The Government has consistently said it could not give Bombardier a contract which would have secured thousands of jobs in Derby because it had to stick to EU rules. Yet it now transpires there is one rule it discounted - the one which says it could have banned Bombardier's rival, Siemens, from taking part in the Thameslink competition.

Yet what sticks in the craw is that these high-priced consultants, ripping off the taxpayer with the mega-fees, could not even see that. But then, is there an even bigger story here? One of the principal firms involved is the MVA Consultancy, owned by the French consultancy, Systra, with shareholders which include the French government-owned rail company SNCF.

And is there a financial relationship between SNCF and the corruption-ridden Siemens? Watch this space. This is looking considerably more than just an "insult".