How will the hung parliament affect the government’s big spend infrastructure projects? Heathrow has been thrown into doubt amid concerns in Whitehall that they no longer have the numbers. HS2 is unfortunately full steam ahead thanks to support from the Labour benches. There is however another scandal brewing…
Hitachi’s procurement bid for rolling stock is being ultimately overseen by their rail boss Alistair Dormer, who is responsible for Hitachi’s worldwide rail business. Last year Dormer was involved in a messy dispute with the Italian rail regulator, which accused Hitachi of colluding to keep their bid for an Italian rail company artificially low. Dormer denied the allegations but it was a big scandal in Italy and Italian MPs were furious with Hitachi. Whitehall is already very twitchy about Hitachi over the behaviour of their other top execs. A few months ago HS2 had to scrap an £170 million contract after Guido exposed a series of conflicts of interest. Last thing they want is another difficult bidding process…
HS2 will re-tender a £9 million consulting contract after further potential conflicts of interests came to light. Construction Newsreports that the bidding process for a “commercial services management framework” has been abandoned and will start afresh within the month. It emerged that firms Arcadis and Mott MacDonald would be “conflicted” if chosen…
HS2 chairman David Higgins is facing a select committee bashing over the state of his beleaguered white elephant – and MPs would be forgiven for asking if he has taken his eye off the ball. Higgins is paid a £240,000 salary by the taxpayer for a three day week at HS2. What does he do the rest of his time? He is also the chairman of Gatwick Airport, a nice little earner and hardly a job that requires no attention. He is a director at the Commonwealth Bank of Australia, where his roles also include chairman of the bank’s Remuneration Committee and sitting on the Risk Committee. Kerching. Job number four is as a “senior adviser” at fund manager Global Infrastructure Partners. Higgins is no doubt enjoying George Osborne levels of success in the private sector. The Transport select committee will be interested to know why his very well remunerated job working for the British taxpayer is going so badly by contrast…
HS2 chairman David Higgins faces a showdown with the Transport select committee over the £170 million cancelled contract debacle. Transport committee chair Louise Ellman says she wants a session on the fiasco “as soon as possible”. Pressure is beginning to be applied to the beleaguered HS2 board, which has been hit by a spate of recent high profile departures, including of its director-general David Prout, strategy director Alistair Kirk and information chief James Findlay. Rumours have been swirling that Higgins – who has just taken on a second job as chairman of Gatwick Airport – may not be long for the world of HS2. Select committee members will want to ask if HS2’s double jobbing boss took his eye off the ball…
With Chris Grayling rejecting suggestions that the £170 million tender should be re-run, US construction giant Bechtel is the favourite to take the contract. So it is unfortunate that the weekend papers revealed links between Bechtel and a middleman named in British courts as involved in corruption in Abu Dhabi. One to watch. For the £170 million HS2 contract to be mired in sleaze allegations all over again would heap further pressure on the project…
Chris Grayling came under fire from all sides at a bad-tempered Transport Questions this morning. He ignored calls from the Shadow Transport Secretary Andy MacDonald and Tory MP Cheryl Gillan for an inquiry into the HS2 – CH2m shambles. MacDonald not unreasonably said the story “stinks to high heaven”, Grayling laughably replied that the cancelling of a £170 million contract was not a “massive” issue. Wonder what CH2M think about that. Notable how Grayling carefully distanced himself from the beleaguered “independent” HS2 board…
HS2 has announced the departure of its Director-General following the £170 million cancelled contract debacle. David Prout, the civil servant who had overall responsibility for the entire project for the last four years, has resigned and will take up a position at Oxford University in September. A major blow…
Guido also understands the Permanent Secretary at the Department for Transport, Philip Rutnam, is leaving. He will join the Home Office. The man in charge of HS2 is out, and the most senior DfT mandarin is off too. Problems growing for HS2 ahead of what will be a fiery Transport questions for Chris Grayling this morning…
Victory! HS2 has scrapped the scandal-hit £170 million contract awarded to CH2M following our repeated revelations of conflicts of interest. The announcement that CH2M will be withdrawing its bid comes on Article 50 day as the government tries to bury the humiliating climb down. The company says it is pulling out due to “protracted delays and ongoing speculation”.
“CH2M today provided formal notice to Hs2 Ltd that we are withdrawing our interest in the Hs2 Phase 2b contract. CH2M has demonstrated all appropriate measures taken throughout to ensure the integrity of the procurement process. Notwithstanding these efforts, we have taken the decision to alleviate any further delays to this critical national infrastructure project which could ultimately lead to increasing costs to UK taxpayers, as well as to our firm.”
The final straw was Guido’s story last week reporting that HS2’s former chief of staff Chris Reynolds had worked on CH2M’s bid as its director for the development partner contract. A stunningly blatant, undeclared conflict of interest, and a win for Guido’s public interest campaigning blogging…
“We have just been informed of CH2M’s decision through Guido Fawkes. The investigation regarding our concerns about conflict of interest has clearly raised some serious questions about the process. A meeting is scheduled between Mace and HS2 on Friday, and we look forward to hearing what HS2 propose to do next and their response to our questions. When millions of pounds of British taxpayers’ money is being spent, the public rightly expect decisions to be made following a thorough process and on a level playing field.”
UPDATE II:Taxpayers’ Alliance comment:
“The revolving door between HS2 Ltd and CH2M never passed the smell test and serious questions were rightly raised around HS2 continuously appointing staff from one of their contractors. There was never a convincing case for HS2 and its multi-billion pound budget would be far better spent on local infrastructure projects that would cost much less and deliver much better value for money. Hopefully today’s decision is the first step towards this expensive vanity project being binned altogether.”
UPDATE III:Tory MP Cheryl Gillian says the fiasco is “an extraordinary state of affairs”:
UPDATE IV:CH2M statement:
“As is a matter of public record, HS2 Ltd sought clarification from CH2M on a number of areas. CH2M responded to each of these queries in a timely manner. Furthermore, CH2M is clear that it went above and beyond the conflict of interest protocols, as set out by HS2 Ltd. HS2 Ltd were aware of the involvement of Mr Reynolds throughout the procurement process, as documented in CH2M’s bid, which expressly identified Christopher Reynolds and included quotes from him. Mr Reynolds’ appointment to CH2M took place 5 months after him leaving HS2 Ltd. Mr Reynolds is a valued member of CH2M staff and brings with him a wealth of technical experience.”
HS2 is refusing to deny that they are about to scrap their scandal-hit £170 million contract with CH2M following Guido’s revelations of conflicts of interest. On a long day of spin yesterday, DfT and HS2 officials declined to answer Guido’s questions on whether the contract with CH2M would still go ahead. A spokesman would only say:
“The matter remains under discussion. We will let people know when those discussions conclude. We’re not providing any other comment at this stage.”
This morning’s FT quotes a source close to CH2M as saying: “CH2M has been told that they either stand down or they will be kicked off. It is going to happen this week”. Good time to bury bad news…
As the HS2 conflicts of interest row rumbles on, Guido can bring you the latest issue causing concern for officials in Downing Street. An industry day is being held today for companies to discuss the next major contract, for a rail manufacturer to build the actual trains. Among the bidders is Hitachi, the Japanese conglomerate. Hitachi employs as a consultant with a roaming brief one Kate Mingay, a former senior official at the Department for Transport. She has previous…
Back in 2012 Mingay was suspended by DfT after claims she mismanaged the West Coast rail fiasco. She became embroiled in a furious public row with the government, launched a legal challenge against DfT and was eventually reinstated after much acrimony and threats to take it to the High Court. It was major news at the time and very messy for ministers. Now Mingay helps run Hitachi-owned Italian rail company STS. There are quite a few people in government who thought they had seen the back of Mingay, until this HS2 contract came along…
The half a billion pound HS2 conflict of interest row is generating such concern that Guido hears a crisis board meeting has been called today. As the spotlight shines on the board to protect the taxpayer from a legal challenge over the £170 million contract awarded to construction firm CH2M, Guido can report on yet another conflict of interest…
Not only is HS2 Ltd’s current CEO Mark Thurston a former CH2M employee. Not only is HS2 Ltd’s previous CEO Roy Hill a former CH2M employee. Now HS2 Ltd’s former chief of staff Chris Reynolds has been hired by… CH2M! Specifically as programme director for the development partner contract. Industry journal Construction News says this raises further questions about HS2 handing a massive taxpayer-funded contract to a firm that then hired its chief of staff. The revolving door spins ever faster, something for the HS2 board to discuss at their meeting today…
The taxpayer is funding a preposterous 17 (seventeen!) PR agencies to provide communications advice to HS2, the Department for Transport have disclosed in response to a parliamentary question. The 17 comms firms which have been paid by the taxpayer to spin for the beleaguered project are:
12 other consultancy and production firms have also been handed lucrative contracts:
JBP Associates, ATK Productions, Future Thinking, NLA Media Access, NTA Monitor, Consultation Institute, Dialogue by Design, Elro Associates, Emergn, The Edge Picture Company, The Skills Show, Tomboy Films
Why does the taxpayer need to fund all these companies when not a rail on the HS2 line has yet been laid? Why does HS2 possibly need 17 taxpayer-funded spin shops? Know they are getting bad press but come on…
HS2 has delayed the controversial award of a £170 million contract for a second time as it investigates conflict of interest concerns. Last week we reported how the taxpayer-funded contract to construction firm CH2M had not been signed off because a rival bidder, Mace, had threatened legal action. They claim the deal was conflicted because the current and former bosses of HS2, Mark Thurston and Roy Hill, both previously worked for CH2M. The revolving door makes George Osborne’s multi-jobbing seem above board.
Mace has now appointed a QC to advise them, and was due to have a second meeting with HS2 last week to discuss concerns. Yet HS2 delayed that meeting after failing to conclude its internal investigation into the conflicts of interest in time. Mace say:
“It is right and proper that HS2 are taking our concerns over conflict of interest and tender process seriously. However, it is taking a significant amount of time for HS2 to conclude their investigations.”
This is costing taxpayers thousands and thousands of pounds, all the while delaying HS2 again and again…
Downing Street is monitoring the situation closely after HS2 delayed the awarding of a £170 million contract amid conflict of interest allegations. Following Guido’s stories on the revolving door between HS2 and American engineering firm CH2M, also covered extensively in the FT, Times and City AM, defeated bidder Mace threatened HS2 with legal action. They are understandably suspicious that the contract was handed to CH2M, the boss of HS2’s previous employer.
In response, HS2 has now delayed the signing of the contract with CH2M while it meets with Mace to discuss the allegations of a conflict of interest. Remember dozens of CH2M staff on secondment at HS2 continue to take home huge salaries while not a rail is being laid. Guido hears Number 10 is watching developments with increasing interest. Yet another HS2 delay…
Taxpayers were billed almost £60,000 per month so HS2 Ltd could hire the director of a firm it later awarded a £170 million contract. A written question by Cheryl Gillan reveals HS2 Ltd paid US engineering firm CH2M an astonishing £48,500 plus VAT per month pro rata for the services of interim chief executive Roy Hill. Under Hill’s tenure, HS2 awarded CH2M a highly controversial £170 million contract which is currently the subject of legal threats over conflict of interest allegations. The HS2 deal to hire Hill from CH2M is equivalent to a package worth £700,000 per year, nearly five times the salary of the Prime Minister. An extraordinary amount of money for any taxpayer-funded official, let alone one at the centre of a half-a-billion pound conflict of interest row. HS2 is already delayed and over budget, so it is hardly performance related pay. How do the Department for Transport possibly justify these numbers?
Earlier this month Guido reported that HS2 Ltd had given half-a-billion pounds worth of taxpayer-funded contracts to CH2M, a US engineering firm that just happened to be the former company of the HS2 CEO. Well, now a rival construction business which lost out on the contract is threatening to sue HS2 Ltd over this alleged conflict of interest. Mace say they are “looking closely at our options”. Their case: CH2M was awarded the latest £170 million contract during the tenure of HS2 CEO Roy Hill, a former employee of CH2M. And the revolving door spins even faster than that – industry insiders claim CH2M currently has around 200 members of staff working for HS2. A CH2M man took charge of HS2, HS2 hired 200 CH2M staff, and then HS2 awarded CH2M a huge contract… Hundreds of millions of pounds of taxpayer’s money spent without a rail being laid…
HS2 Ltd has today awarded a £170 million taxpayer-funded contract to its CEO’s previous employer. As Guido illustrates above, this is the latest evidence of a revolving door between HS2 and the American engineering firm CH2M. The golden handshakes date back to 2012, when CH2M was appointed as HS2’s “Phase 1 delivery partner”. In March 2016 the firm was appointed as HS2’s “engineering delivery partner”. These contracts were worth some £350 million.
Seven months later, in October 2016, CH2M’s Roy Hill was appointed as the interim CEO of HS2, on secondment from CH2M. Last month HS2 appointed another CEO. Can you guess where from? Mark Thurston also joined from CH2M, replacing his former CH2M predecessor. Very, very cosy…
This afternoon a press release from HS2 Ltd arrived in Guido’s inbox:
“Plans to bring HS2 to Manchester and Leeds took a step forward today with the confirmation that contracts will be awarded to CH2M… CH2M will be become Phase Two B Development Partner”
The contract is worth some £170 million – the shortlist was announced under Roy Hill’s tenure. HS2 Ltd “is an executive non-departmental public body” funded by the taxpayer via a grant-in-aid from the Department for Transport. They have just given a massive taxpayer-funded contract to their CEO’s old company – this smells…
Ed Miliband has secured an adjournment debate tonight on HS2 where he will argue against the line going through his Doncaster constituency. Miliband has been on quite a journey – he used to say he “absolutely” supported the project before u-turning because it will “disrupt” his constituents. Will it disrupt relations with the wife too? Ed’s other half Justine Thornton QC has for the last few months been working as counsel for the Department for Transport, defending HS2 as it faced public opposition at Lords committee stage. MPs needing lines to take before Ed’s debate tonight can read Justine’s evidence on behalf of DfT and HS2 here. Mr Miliband attacking HS2 in the Commons, Mrs Miliband defending it in the Lords…
Forget Owen Jones’ vanity protest against Trump’s state visit, tonight the Taxpayers’ Alliance has lit up Piccadilly Circus with a projection of a giant HS2 white elephant. There is one last attempt to block the wasteful, mismanaged project in the Lords tomorrow, where the HS2 bill is at its third reading. And then it’s goodbye to £90 billion…
High Speed Two Limited is the private firm “responsible for developing and promoting the UK’s new high speed rail network”. It is wholly funded by the taxpayer through a government grant-in-aid under the umbrella of the Department for Transport. HS2 Ltd this morning released its corporate purchasing card statements for the second quarter of the year. They reveal the gravy train summer enjoyed by rail pen-pushers.
Despite the company having its own office space in flashy Canary Wharf, £3,836 was paid to “Canary Wharf” for “staff training events” in April alone. This figure is additional to rent and it is not clear from the statements what precisely it was spent on.
£3,661 went on a health and safety training course organised by Astutis, “Creating a positive health, safety and environmental culture at your organisation”.
In June, a £718 cancellation fee for a staff member’s private healthcare appointment with BUPA was charged to the taxpayer.
£710 was spent on HR software called ‘TeamMood‘ – this allows managers to “follow the mood at the team level. It also allows people to be more sincere about their feelings.”
HS2 is already £7 billion over budget, you don’t need to pay Guido £710 for him to tell you that’s a mood killer.
HS2 may have hit another rail bump. The new Transport PPS, Victoria Prentis, is “strongly opposed” to building the high-speed rail link. Prentis, whose picturesque rural constituency of Banbury would see HS2 run through its eastern edge, says on her website:
“While I recognise the importance of investment in our transport network, I am strongly opposed to the building of HS2.
