A cloud is hanging over one of the government’s biggest privatisations.
The £6bn proposed PFI deal for the search and rescue helicopter service has taken a highly unusual turn. It could have big implications for not only the service, but how such negotiations are handled in future.
Philip Hammond told the Commons yesterday that talks have been abruptly halted — hours before a planned announcement to proceed — after the private Soteria consortium disclosed a “possible issue” to the Ministry of Defence.
Whitehall figures told us that the “issue” is a possible breach of propriety on bidding rules. In other words, this is about standards of conduct, rather than problems with fundamentals of the deal (price, debt etc).
Most of the details remain secret — indeed some ministers and senior people involved with the negotiations are still in the dark. This is certainly a story to watch carefully over the coming weeks.
Jim Pickard
Kiran Stacey