Chelsea Barracks relocation stalled again

by Carol Millett



The £200m Chelsea Barracks public private partnership project is facing further delays following the Ministry of Defence's decision to review the relocation of the barracks.

The review has been prompted by the failure of the two shortlisted bidders and the MoD to come up with an alternative central London site in which to relocate the barracks. The MoD is now considering the efficacy of relocating the barracks to a site on the outskirts of London.

Two consortia, led by Amec and Regalian Properties, were shortlisted to submit detailed bids for the project in May last year. The project has been hailed as the most profitable property-based PPP to date. The 25-year contract involves the transfer of the 4.5ha of prime development land at Chelsea Barracks to the private sector and the disposal of the 14ha Cavalry Barracks site at Hounslow. In return, the winning consortium must provide serviced accommodation for 1,000 personnel, including a ceremonial battalion and two bands, at a cheaper site in or close to central London.

When the two consortia were shortlisted last year, defence minister John Spellar said: "This project will enable us to meet our commitment to provide good-quality accommodation for the troops in central London. We will be encouraging the bidders to consider the widest possible range of sites close to central London to achieve a solution that meets both the operational needs and provides best value for money."

But one year on, the combined efforts of the bidders and the MoD have failed to come up with a suitable central London site. One possible option - the Nine Elms site at New Covent Garden - has been rejected because of "technical obstacles".

An MoD spokesman told CJ: "A review is underway as to whether the operational requirements of the barracks can be met by a site further out of London. The Nine Elms site has been ruled out because of technical obstacles and we are having difficulty finding a central location. We are encouraging the bidders to look at the widest possible range of sites further out from central London."

This is the second MoD review that Chelsea Barracks PPP has been subjected to. Just weeks after the project was put out to tender in January 1997, it was put on hold while the MoD carried out a wide ranging assets review. It was not given a clean bill of health until July 1998. The current review is expected to be completed by the summer, according to a MoD spokesman.

Both bidders refused to comment on the progress of the project.