PFI Hospitals going bust, what are the implications for the future of MoD & AirTanker
 

The procurement of an AAR capability through PFI never seemed like a particularly good piece of business by the MoD. Now we have it confirmed that hospitals provided under PFI are unaffordable.

Blair defends PFI as NHS trusts face bankruptcy - Telegraph

How long will it be before the MoD's buy now pay later strategy lands us in the poo?

S-D

I suspect that the Rt Hon member for Kirkcaldy has you so delicately put has left the UK deeply in the poo, not just the NHS but as you assert AirTanker as well. If the deal has been as badly negotiated as the NHS PFI deals you will need to pray if we go to war again, but as usual HM Forces will set to and deal with it. Pity he can't be charged with Treason for the ultimate penalty but I want to see his entrails hanging on a pike on London Bridge.

Those civil servants involved in drawing up these contracts must be either utterly inept or criminal. :mad:

PFI was a brilliant scam. It let politicians pretend they were buying lots of new stuff while offloading the cost onto future governments so they didn't have to raise taxes to pay for it. No criminal intent required, just a desire to get re-elected combined with no concern about the long-term consequences.

MG23

^^^^^ well said, Sir or Ma'am...:D

Like contractorisation too.

They look at the in-house cost, decide that if they can save £Xm then contractor provision is the way to go. Contract let and for 5 years sunshine and light. Contractor grins and bares it. Come contract renewal contractor makes realistic bid. He is either undercut through ignorance or his bid is way above the budget line entry. MOD grins and bares it.

Come the third review, MOD ability to return in-house is zero, contractor grins, MOD bares it.

Well, Cobham aviation could be in trouble now having lost the tanker contract :sad:

Purely out of interest is anybody aware what the implications are under the PFI for the loss of an airframe, whether by accident or enemy action? Who exactly is required to replace the asset? Does the MOD have to replace it for Air Tanker for losing them their aircraft?

Just interested.

A valid question.

I understand that in future conflicts the 1st (Duke of Wellington's) Kings Defence Contract Enforcing Battalion are to be in the vanguard of our war plans. Not until the appropriate paperwork, with liability and risk assessments, has been signed by our potential foe shall the aircraft be sent into danger.

In the event of the enemy objecting to this, we shall threaten to ignore European working time directives and threaten to fight at weekends, evenings and on public holidays thus scuppering their own financial plans. They'll sign.

It's a fantastic and clever calculated strategy that makes me proud to be British. Both our soldiers, the sailor and the airman that are left in 2020 shall have a strategy fit for purpose.

one way or another, the MoD will pay for it!

S-D

What about the Civil Servants who, when the Tories introduced PFI and imposed it upon MoD, immediately spotted it for the waste it was and took the time to spend 5 minutes filling in the PFI Waiver form? I don't recall getting any support from non-Civil Servants.

The inept/criminal act was the orders from above to knowingly waste money.

It is an offence for anyone in MoD to refuse such a direct order to waste money, but not an offence to issue that order.

Now put yourself in the shoes of those who had to let the contracts. Damned if you do, and disciplined if you don't.

Don't understand why everyone winges about Air Tanker. When you have no money but are desperate for new capability (remember the A330 is fully equipped for trooping, cargo and AAR) lease it. That is in essence what AT is so for circa £400M per year for the duration (25 years), you get airplane, training, support, infrastructure, etc and can start retiring VC10's and Tristars that should have gone years ago.

The problem, that few focus on, is you have now taken on a fixed annual cost for the pleasure of new capability and no cash. Don't blame the contractor!:ugh:

Couple of points from a very experienced Industry bod who had no involvement in AirTanker at all (but was central to some other big deals)...

1) Loss of airframe. Under all normal operations this is covered by insurance. You have to ensure the asset as the end of the day, the banks want the money back that they have loaned... Otherwise you would never get the loan. My understanding is that in certain circumstances (eg. all out shooting war), the Government takes on the risk of replacing the asset or paying back the bank.

2) (Financially) IT'S A MORTGAGE.... of course it's going to cost more than buying the equipment but we'd all buy our own houses if we could outright. The balance has to be made for affordability

3) (operationally) IT'S BETTER THAN A MORTGAGE... You get assurance the equipment / service will operate or you withhold payment until it works... try doing that with your mortgage payment when the bolier breaks down and see how far it gets you

It's not a perfect system, mainly because the process around the procurement is so long, drawn out and impractical that the requirement has changed before the system is contracted for. Also the Government needs to implement more flexibility so the systems / service can change without huge cost deltas. These are all fixable problems. We sort them out on a business to business basis all the time. But the bottom line is, we never had the cash to buy the Tankers anyway so unless you want to keep flying VC-10, Tristar and wasting HUGE amounts leasing AT, I suggest (respectfully) you get behind the program.

Also one final point. I have civilian troops in harms way, every day in the sandy places of the world. They are no less dedicated to the cause than their military counterparts and to suggest they are does them a grave injustice. Most of us in the defence industry have the same values that you do, that's what makes us proud to do the job of supporting you.

Good post DeaconBlue. :ok:

This is the stick.

Unfortunately (maybe) the Ministry view is that it is not in the business of driving a contractor to the wall.

If it doesn't work you can, to a point, tell the contractor to fix it. If the problem becomes really large then the contractor can go in to administration or the Ministry has to stump up more cash, usually under the guise of a contract variation.

That's it sorted then, AirTanker is a great deal because DeaconBlue has told us so and he's also told us that he knows a lot.
Well let's hope we manage to keep Voyager in a better state than we've kept other aircraft. That is meeting all of the relevant standards, legislators requirements etc.
No it's not.
And we've all seen over the years how well the MoD has held industry to account haven't we?
You got that one right! Any other countries queueing up to follow the UK's procurement examples?

S-D

No it isn't. If the equipment/service doesn't work (how are the refuelling pods coming along by the way?) then the operational risk stays with the MOD. Slightly more important than being able to withhold payment (Lockheed Martin and C130J) is having the tanker where you want it, when you want it.

If the MOD have to run on Tristar (and VC10?) to cover the late arrival of Voyager AAR, it will be very interesting to see who picks up the tab. I'm guessing that the costs involved would cause AirTanker some interesting financial dilemmas right now. :rolleyes:

Heaven forefend that we should sully the name of the Iron Duke by associating it with a bunch of pen-pushers.

We must always remember his robust views on admin niff naff and trivia ........

Operational risk will always be with the MOD, quite rightly.

I was involved in the AT bid and negotiation phase as a Dir of one of the partners. It is a carefully constructed deal which gets inaccurate press most of the time. As I said before, if you have no money and desperately need capability then this is what you get - pluses and minuses!!!!

There is, or rather was, money.

It just got sent to the wrong people: feckless wasters and foreign nations with nuclear and/or space programs.