Following the decision yesterday by CH2M Hill to walk away from the Phase 2b development partner contract, today MPs have supported Stop HS2s call for an inquiry into procurement practices within HS2. Whilst the focus has so far been on this specific contract, serious questions have to be asked about the current £350m contract of Phase 1 delivery partner. This contract gives CH2M Hill, who have a track record of both conflict of interests and going well over budget, a significant say in who gets the £8.6bn worth of construction contracts for Phase 1.
It was announced last week that the award of those contracts, which was meant to have taken place this week, has been put back to June. But Parliamentary insiders have since told Stop HS2 that July is the very earliest, with there being ‘no chance’ that construction would start this year. As ‘delivery partner’, CH2M will have had significant input in drawing up the shortlist of preferred contractors and will, as things stand, have a say in who gets them.
In terms of the contract that CH2M have walked away from, this was as a result of losing bidder, Mace, going so far as to hire a QC and threaten a Judicial Review. Despite this, it seems that Becthel, who like CH2M are a member of the “High Speed Rail Industry Leaders Group”, or more rightly ‘cartel’ are likely to get the award.
Today, the Labour Shadow Transport Secretary Andy McDonald said at Transport Questions:
“Whilst we await a formal response about how a DFT senior civil servant awarded a rail franchise whilst part-owning the consultancy advising the successful bidder, yesterday it was announced that HS2 have dropped their £170m engineering contract with CH2M. The CEO of HS2 and now the full time appointment came from CH2M, and more than that HS2s former chief of staff worked on the engineering company’s bid for the project, and now the director general of HS2 has resigned this very morning.”
“I don’t agree with the taxpayers’ alliance when they say it doesn’t pass the smell test, because it stinks to high heaven. So will the SoS order an immediate independent inquiry into these goings on, because his silence on this issue speaks volumes?”
Transport Secretary Chris Grayling brushed off these concerns, saying:
“Let’s be clear about this. First of all, in terms of the appointments as CEO of HS2. I want the best person for that job, and we will always seek to employ the best person for that job. I will also ensure that if there are any questions around the recruitment process, those are addressed carefully, investigated carefully by the civil service to give me the reassurance that we can make an appointment without any concern about doing so. That we did, I have absolute confidence in both that recruitment process and in that new CEO.”
“The announcement made yesterday, that CH2M Hill have decided to withdraw from the contracting, after an issue, not a massive one, but an issue arose from the contracting process is the right one, I’m grateful to them for doing that, it is the right thing to do. I want to make sure that contracting processes in Government recruit the right expertise, corporate or individual, but that we are also robust in ensuring if things aren’t done right then that is addressed, and that is what has happened.”
“With billions of pounds of taxpayers money at stake, clearly with the announcements last night on HS2 confidence in the transparency and the decision making processes in HS2 Ltd and at CH2M have been called seriously into question.”
“First of all can the SoS tell us with CH2M, did they jump or were they pushed? Because a company giving up a £170m contract is enormous, and secondly will he give this house an undertaking that no other contracts will be issued to other bidders such as Betchel or Mace further down the line before a full inquiry has been conducted into the decision making process at HS2 and CH2M.”
Sadly, Grayling remained dismissive:
“I’m very clear on this CH2M have done the right thing in taking a step back, have identified a problem which would have called into question whether they could and should operate this contract. This was not a massive misdemeanour, it was an error in process which has caused them to take a step back, it will now be for the board of HS2 and its’ independent directors to make sure than in taking this contract forward they do the right thing, but I think from the point of view of the country, it is important that we get on with the job as well. We have all the necessary governance in place as we go forward in replacing CH2M, but we do need to get on with the job.”
Whilst Grayling was happy to try and brush this all under the carpet as a tiny little thing, Mace felt rather differently, saying:
“With so many questions being asked by the public and parliament, the only sensible thing to do now is to look at the whole tender process again. It’s important to note that conflicts of interest was only ever one element of our concerns, In our 26 year history we’ve never brought a case to the High Court or seen a procurement process run like this. We continue to closely review our next steps with our legal team and don’t rule anything out.”