If you thought Melbourne’s Docklands stadium was a fiasco check out this amusing piece from our Westminster correspondent Martin Suiteach about the Wembley stadium nightmare which might one day be built by that dodgy brothers Packer-connected outfit Multiplex.
Cobbers and freunds join arms, clink your steins together at the Oktoberfest, wear bad acid wash jeans in a communal spirit of international brotherhood because you may be about to put one over good and proper on your mutual old enemy.
As things stand in the sports title desert known as England, their national football stadium, the place where other teams fear to tread could end up being built by Australians and financed by Germans.
When the Poms played their last football match at Wembley, they got turned over 1-0 by Germany in a World Cup qualifier. This this really pissed them off as they wanted to sign off with a win at the ground where they won the World Cup by beating them in 1966.
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Now Wembley can’t even get a British bank to pull the financing together on the deal, with Multiplex waiting in the wings to start construction.
Last week Barclays Bank, which was meant to piece together a consortium of around 15 institutions to come up with £300 million, threw a hissy fit and pulled out when it heard the authorities were also interested in a proposal being put forward by the pesky Germany outfit Westdeutsche Landesbank (WestLB).
April 30 was deadline day for Wembley National Stadium Ltd (WNSL), the FA’s subsidiary charged with building the stadium, to present a case to the government that it can bring this project in.
Typical of the farting around that has characterised this fiasco, the government isn’t expected to make a statement until next week at the earliest and no-one was returning Crikey’s calls.
Culture and Sport Secretary Tessa Jowell wants assurances that the financial muscle behind the deal is strong enough to cope with the task of pulling down the old building and erecting a new one (although you have to ask how hard that is).
This is particularly salient now that Barclays has gone bush. Another fly in the ointment is a confidential report into the way the multi-million pound contracts were awarded.
This document is as closely guarded as the crown jewels. It was the reason Jowell put a halt to the £715 million project last year and gave the Wembley team until the end of April to prove it has made serious changes to its plans.
MPs on the cross-party Culture and Sport select committee will more than keen to feast their peepers on that little baby and if they do, there’s a fair chance it’ll be made public.
Jowell has demanded a tightening in the corporate governance of the project. She wants a smaller board that includes people with expertise in relevant industries.
She also wants there to be more transparency in the way that WNSL conducts itself.
In December Jowell told the House of Commons was worried about an “implied lack of transparency in part of the process and a failure to deal properly with actual or potential conflicts of interest”.
She added that the government must be satisfied that “all aspects of the stadium’s procurement meet government standards of propriety and regularity”.
Questions were raised about how the bidding process for the construction contract was run, and how the board governed that process to maintain a fair competition for all the contractors involved.
A report found that there was no evidence of criminality or impropriety at any stage of the process but raised questions about the procurement process up to September 2000.
According to the Guardian newspaper, the rules of the race to bid for building Wembley were progressively altered before the contract was concluded.
Contractors were initially impressed with the terms being offered in 1999. WNSL told contractors it was prepared to share the risk. That is, within certain parameters it would work with its chosen contractor to identify a realistic cost for the final specification of the stadium before setting a price.
But, the terms were gradually altered during the bidding process until it became clear that the contractor had to bear the lion ‘s share of the risk as WNSL insisted that constructors set a final price – a “guaranteed maximum price” – for the stadium before the design work was completed. Several contractors found these restrictions impossible to overcome and either withdrew or submitted a bid on the original WNSL terms.
In February 2000, a joint venture between Bovis and Multiplex was given preferred bidder status and given 20 weeks to agree a price with WNSL.
The Bovis/Multiplex eventual offer of £339 million was rejected by Wembley as being too high. Ten days later Multiplex secured the contract with a “guaranteed maximum price” bid of £326.5 million.
A Bovis spokesman said: “We were certainly surprised by both the speed and nature of their move.”
Jowell also wants an independent value-for-money assessment of the proposed contracts with Multiplex commissioned following the concerns that were raised about the processes that were employed in awarding key contracts.
However, in the Commons in December, Jowell said that the Multiplex contract would probably represent “best value” today.
The dealmakers think they can pull of this “bargain” by presenting a slimmed-down project without the hotel and offices originally proposed.
The mechanics of the financing make interesting reading. Barclays was picked to put together a funding package to raise a little over £300 million. With lottery money, etc, this would get the stadium built.
The idea was to get a syndicate of banks to put the money up, with future revenues from the stadium in the form of hotdogs, pop concerts as well as ticket sales then being securitised.
Bonds would be issued, the banks would be paid back and, on paper at least, the stadium would become self-financing in forever.
But its hard to guess how much the corporate wanker will pay for a premium box so there is always going to be a question mark over that projected revenue.
Joe Public will produce little revenue in terms of ticket sales. In fact a great deal is expected to come from selling “pouring rights” to brewers and other vendors flogging their crap at matches and concerts.
There are some in the financial centre who think Barclays were always looking for an excuse to drop their bundle.
The Brit bank’s plan envisaged getting regular lenders to pay the construction bill with a syndicated loan. The WestLB approach, on the other hand, would see the bank itself take the liability on to its books, something that Poms hate doing these days. Barclays couldn’t add the numbers up to the satisfaction of syndicated lenders; WestLB only has to add them up to its internal satisfaction.
At this stage there’s no indication as to whether Multiplex has gotten into bed with WestLB, given it was heavily involved with Barclays in getting the syndicate together.
If this all goes belly-up, and there is no particular favouritism for the stadium’s location at Downing Street, Birmingham and Manchester enter the running.
To add insult to injury, the FA would have to hand back the £120 million that WNSL as given to buy the Wembley site.
Despite all this apparent running around, since Crikey last wrote on this subject, it’s been all stop at the old site.
“Surely you mean it’s been all ‘go’?” I hear you ask.
NO, I mean STOP. Inert. Dormant. Nothing has happened. The famous twin towers are still crumbling, the grass on the hallowed turf is getting longer and the authorities have been flat out like a lizard drinking.
Actually, that’s a little harsh. The English FA has had to make a telephone call. Crikey can’t profess to have been present, but we hear it went a little like this.
The scene: An office in Cardiff. The time: who cares? A phone rings:
Nervous Pom: Hello. I’d like to, um, make an enquiry about availability of your facility.
Welshman (cups hand over receiver and whispers to colleagues in room) It’s them. Giggles break out at the Welsh end.
Welshman: Certainly sir. What did you have in mind (starts to snigger)
Nervous Pom: Well we were looking at an FA Cup Final and three divisional play off finals.
Welshman: Is this the English Football Association?
Nervous Pom: Um, er, well yes it is.
Welshman: Don’t you have your own stadium yet?
Nervous Pom: Not quite yet, no. Not until 2005 at the earliest, it seems.
Welshman: (by now starting to laugh audibly) And you want to hire our fully functional, built to cost, built to time, all weather, all purpose, all round fantastic Millennium Stadium would you?
Nervous Pom: Yes we would. By the way, how much did yours cost?
Welshman: 132 million quid
Nervous Pom: Really? Is that all? And you built it on time. That’s amazing.
Welshman: (triumphantly, as all around him collapse) Yes it is, isn’t it boyo? Especially given all that sheep shagging you think we’re supposed to be doing out here. Booking confirmed!
OK. It might not have happened exactly like that, but I think you get the gist.
Martin Suiteach can be reached at[email protected]