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Chelsea Barracks PPP fails MoD inspection
00:00 25 Jul 2001
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Exclusive by Carol Millett
The £200m Chelsea Barracks Public Private Partnership (PPP) is about to be blown apart by a Ministry of Defence (MoD) report which will recommend the government ditch the original PPP.
Instead the influential report will recommend a much smaller PPP in which the existing barracks will be refurbished and extended, leaving just a quarter of the site for the winning bidder to develop private apartments on.
This marks a radical departure from the original PPP, which involved the relocation of Chelsea Barracks to a new central London site, freeing up all 4.5ha of prime real estate in the heart of London to be developed by the winning bidder.
A spokesman for the MoD's project team at Chelsea Barracks told CJ that rising property prices had made the relocation unfeasible.
He said: "Several attempts have been made to find an alternative site which is affordable and central, but rising land and property prices have made it difficult to meet that criteria. Therefore we are preparing a report which will recommend to ministers that the barracks remain at the existing site where they will be refurbished and extended or perhaps rebuilt, and around a quarter of the land sold for private development, possibly to the winning bidder as part of the PPP."
The MoD's report will be submitted to Geoff Hoon, the secretary of state for defence, in October. Hoon is expected to make a final decision on the future of the PPP by December this year.
The MoD project team spokesman said the PPP would not need to be rebid. He added: "Our legal advice is that the PPP has not changed significantly enough to require a rebid." The two shortlisted bidders are a consortium led by Regalian Properties and a consortium led by Amec. As CJ went to press both were unavailable for comment.
Sources close to the bidders blame the MoD for the failure to find a suitable alternative site. "A number of sites were put forward but the MoD was slow to respond," said one.
Another said there was little appetite for the PPP within the MoD. He commented: "This PPP was foisted upon the MoD by the Treasury and the MoD's inertia is partly driven by the resentment that decision generated and partly by the belief that any monies from the PPP is earmarked for the Treasury's rather than the MoD's coffers."
The £200m Chelsea Barracks Public Private Partnership (PPP) is about to be blown apart by a Ministry of Defence (MoD) report which will recommend the government ditch the original PPP.
Instead the influential report will recommend a much smaller PPP in which the existing barracks will be refurbished and extended, leaving just a quarter of the site for the winning bidder to develop private apartments on.
This marks a radical departure from the original PPP, which involved the relocation of Chelsea Barracks to a new central London site, freeing up all 4.5ha of prime real estate in the heart of London to be developed by the winning bidder.
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A spokesman for the MoD's project team at Chelsea Barracks told CJ that rising property prices had made the relocation unfeasible.
He said: "Several attempts have been made to find an alternative site which is affordable and central, but rising land and property prices have made it difficult to meet that criteria. Therefore we are preparing a report which will recommend to ministers that the barracks remain at the existing site where they will be refurbished and extended or perhaps rebuilt, and around a quarter of the land sold for private development, possibly to the winning bidder as part of the PPP."
The MoD's report will be submitted to Geoff Hoon, the secretary of state for defence, in October. Hoon is expected to make a final decision on the future of the PPP by December this year.
The MoD project team spokesman said the PPP would not need to be rebid. He added: "Our legal advice is that the PPP has not changed significantly enough to require a rebid." The two shortlisted bidders are a consortium led by Regalian Properties and a consortium led by Amec. As CJ went to press both were unavailable for comment.
Sources close to the bidders blame the MoD for the failure to find a suitable alternative site. "A number of sites were put forward but the MoD was slow to respond," said one.
Another said there was little appetite for the PPP within the MoD. He commented: "This PPP was foisted upon the MoD by the Treasury and the MoD's inertia is partly driven by the resentment that decision generated and partly by the belief that any monies from the PPP is earmarked for the Treasury's rather than the MoD's coffers."
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