A Government source has said the £14 billion private finance initiative project, awarded by the Labour administration, is unlikely to be given the green light by the present Conservative/Lib Dem coalition because of the huge costs.

It opens up the possibility of studies for a much lower cost replacement which could mean a reprieve for RAF Cosford and secure its future. Mr O’Harney said they believed the programme for the new facility at St Athan had been flawed since its inception.

He said the cost of the facility had soared from £11bn to £14bn in the space of three years.

The source said: “The logic for something on that site remains compelling. The model does not. It’s not impossible that something will go ahead – but it won’t be a gargantuan PFI.”

St Athan has been viewed as vulnerable as the coalition is keen to axe £20bn of defence contracts structured as PFIs – and the St Athan project is not yet under contract.

• The full article can be viewed here.

The Government has recently ended its £750m border security contract with a Raytheon-led consortium and said it had no confidence in the U.S. company.

£755m UK border contract scrapped

By Lorraine Turner

Friday, 23 July 2010

The Government ended its £750m border security contract with a consortium led by Raytheon yesterday, saying it had no confidence in the US company.

The contract was awarded by the previous Labour administration to a group of companies [also] including Serco, BAE, Qinetiq and Accenture in November 2007. They were asked to develop and implement a scheme to collect and check passenger details against police, security and immigration watch lists.

The Home Office said Raytheon, which provided technology to carry out security checks on travellers, had been in breach of the e-Borders contract since July 2009. Although the cancellation comes amid austerity measures, the Government, which has spent £188m on the contract to date, said it would seek alternative providers for the project.

This is interesting news in light of the fact that The Minister for the Armed Forces, Nick Harvey, when speaking on the decision to move Defence Training to St Athan, stated in Parliament recently that to change course now “would undo a great deal of investment that has already been made and add considerably to the final cost.” The preferred bidder for defence training is the QinetiQ/Sodexo-led Metrix consortium of which Raytheon is a member.

A further article on the scrapping of the borders contract can be found here.