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To: maceng2 who wrote (421)	9/10/2003 2:12:27 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

£300m overrun on MoD sub deal David Hencke, Westminster correspondent Wednesday September 10, 2003 The Guardian politics.guardian.co.uk A flawed privatisation deal to rebuild the submarine facilities for Britain's upgraded nuclear deterrent has left the taxpayer with a £300m bill for a cost overrun, a report by MPs reveals today. The Commons public accounts committee condemns the failure of the Ministry of Defence to negotiate a deal with the privatised Devonport Management Limited which has allowed the American-backed company to avoid penalties for poor performance. The report discloses that the deal which left the risk with the private company had to be bailed out by the taxpayer because the facilities which will now cost around £940m were essential to maintaining the nuclear deterrent. They are being built in Plymouth for the new generation of Vanguard submarines. Edward Leigh, Tory chairman of the committee, said: "The assurances that the Ministry of Defence gave this committee in the past about this project were hollow. From a position where the great majority of risk was supposed to have been transferred to the private sector, it is unacceptable that the taxpayer is picking up most of the bill for overruns; over £300m more than expected. "It is vital that the department gets a proper grip over the final phase of the project to avoid further cost escalation, working more closely with the contractor, completing design and safety cases before construction and assessing fully the risks it retains." The report says the MoD had a good case to take the private company to the courts, but says it would have been a pyrrhic victory. "If DML had won, the department would have still ended up paying and there would have been dislocation associated with the legal action."