Defence PFI's

Discussion in 'Current Affairs, News and Analysis' started by meridian, Aug 1, 2010.

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  1. meridian

    meridian LE Good Egg (charities)

    With all the talk of being cash strapped and robbing Peter to Paul how is the great defence PFI experiment going?

    The MoD is the biggest user of PFI's and is living on borrowed time, the money available for capital spending will decline sharply as the PFI payment profile bow wave starts eating into the budget.

    The big ones like the aircrew training, tanker/transport aircraft and Skynet get all the headlines but what about the smaller ones like the C Vehicles, HET or FEPS

    As things change, are we left with ongoing liabilities for things we don't need, an example might be the Tornado GR4 training one, if we withdraw the GR4 early as seems to be the current rumour, will we have to pay for training for an aircraft we don't actually have, until 2031 (see below)

    How have operations affected the deals, C Vehicles, HET's and FEPS spring to mind

    Can we expect the Coalition government to start cutting back or will they use them more as a way of getting capability on the short term cheap

    Here is a list

    Are PFI's universally bad news or are there gems in the shite

     
  2. New reality?

    You've got a 30 year PFI deal have you?

    Yes Minister

    Well tragic, we don't need it none more

    But your predecessor signed it!

    Well, take it up with him, but we ain't paying none more.


    What are they going to do? Sue MOD the ONLY market for their services?
    Well they could, but it;s a bit like reporting a Copper for his attitude… sound in principle, but tends to work out badly for you in practice.
     
  3. meridian

    meridian LE Good Egg (charities)

    I agree that a healthy dose of realism is needed and dare I say it, genuine partnership between industry and the MoD

    The only problem comes when those industry partners have business elsewhere and the UK is just one part of their portfolio, these massive consortium pfi's always seem to have a complex makeup

    The alternative to PFI though is more capital spend in the short to medium term, which means even more painful choices
     
  4. Fox has already fired a shot across their bows and told them he expects these gold plated and diamond tipped contract costs to be renegotiated downwards.
     
  5. Ord_Sgt

    Ord_Sgt RIP

    Today's spanner in the works that the Trident replacement needs to come out of the standard defence budget is really going to upset things. I agree there is only so much money to go around but without defence there is nothing else left, or did I miss something?
     
  6. I'm always amazed at how these firms get away with charging stupid prices for relatively simple services.

    Need new barracks? MOD agrees to some ludicrous price, and 20 years later the thing's fallen down and needs replacement. Those old Wehrmacht barracks many of us lived in were donkeys' years old in the 70's and still going strong.

    An alternative may be easier: there are many hotels running under capacity that could, perhaps, be used as "billets";
    how did "billeting" work in WW2? I'm assuming a law was made, so could be again, that said "we, the government, will send troops to live in your house, like it or not"?


    Those nice motorway services with built-in POL points, accommodation and catering facilities, storage and parking areas = instant barracks for some unit? The M6/M1 alone could house a division doing that, at minimal disruption to civilians and no cost to MOD. A forward thinking government might even make it a statuary duty for each county to provide such a facility? And you get a possible runway right on your doorstep! Good, too, for MACP or whatever it's called this week: stick a MLRS regiment in South Mimms and your crowd- control- in- London problems disappear in a puff of smoke :)
     
  7. Let's apply your 'logic' to the Colchester PFI (incidentally, the £539M quoted above is the capital outlay to build the barracks - there is still a small matter of £2Bn to service it over the next 30-odd years).

    MoD states "We're not paying you any more". Contactor states "Fine, please vacate the barracks". MoD states "Why". Contractor states "Because you signed away the lease on the land for the next 135 (odd) years - see you for the handback in 2145. See you in court sooner that that to discuss loss of £2Bn".

    MoD cannot pull out - it has no alternative.
     
  8. The MOD can pull out because it also has the PFI crooks over a barrel. What do you do with a spare garrison if the MOD throws a strop? Rent it out to the Russians? MOD is the only game in town and to date, has not been reminding the monkeys of that fact.

    The Assorted crooks both PFI and direct cost have all been told their contracts are being looked at and an agreed downward revison of the contract costs is expected. Sucks to be their shareholders who were all expeing to be able to buy Bugatti Vyrons out of the huge profits they were expecting, but that's life.
     
  9. Try:

    Demolish it and build housing or other infrastructure.
    Retain it and use it for mixed business, residential and recreational use.
     
  10. Try when I used to contract to Marconi back in the day…

    "hello, is that accounts?"
    "yes"
    "You haven't paid my invoice yet and it's been more than 30 days"
    "Our terms are 90 days"
    "But my contract with you clearly stated 30 day from date of invoice"
    "We know, but our terms are 90 days"
    "I could take you to court over this"
    "Do you you wish to work for us in future?"

    Trying to enforce contracts on a big and unwilling only game in town outfit tends to be a rather one sided losing streak.
     
  11. Would never work - who wants to live in Colchester?
     
  12. Bull, the government will simply issue a CPO and get it back for the capital outlay.
     
  13. Isn't that exactly what 2PARA did when they moved to Colchester and there was not enough accommodation ready? took over the local Travel Inn for six months?
     
  14. Talking of bull.
     
  15. meridian

    meridian LE Good Egg (charities)

    The Government cannot simply say to the providers, see this contract, shove it up your arse.

    Credibility cuts both ways, if you want commercial organisations to bid for government work they have to have some assurance that contracts will be honoured, that expectations will be reasonable and requirements are well thought through. As soon as commercial organisations start thinking the government acts in bad faith, is too difficult to deal with or basically, not worth the effort, the government is well and truly****ed.

    Most commercial organisations know full well that the land of milk and honey is rapidly dissapearing in the rear view mirror so know that the way forward is to thing of the long game, appear concilliatory and the very last thing to do is go to law.

    Cool heads, long term views and above all else, maturity is needed