Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by Tropus Limited


Note: (a) The views in this memorandum are those of Tropus (as hereinafter defined) and are provided in good faith based on the knowledge, belief and professional opinion of such. The views expressed should not be attributed to any other party and are given without any guarantee or warranty on their accuracy or with a view to any liability attached to Tropus as a consequence of the same.

  (b) The views in this memorandum are also intended as a comment on what, in our opinion, is the departure from "best practice" in relation to a competitive procurement exercise, in particular, where the client has endeavoured to use a fair competitive exercise.


  Tropus (which expression shall mean "Tropus Limited") provided project management services on the Wembley Stadium project from November 1997 until August 2001, initially for the English National Stadium Trust and then for Wembley National Stadium Limited (WNSL), a wholly owned subsidiary of the Football Association (FA). Francis McPeake, who is a Director of Tropus, was involved full time in the project between these dates. David Hudson, as Managing Director and then Chairman of Tropus, was involved throughout at a strategic level and in overseeing the services provided by Tropus. From March 1999, three other project management staff members of Tropus were engaged full time in providing project management support services.

  During the early part of the commission the company was known as McBains Limited and the company changed its name to Tropus Limited in September 2000. Notwithstanding this fact, this memorandum uses the current name for the company's activities throughout the commission.

  Tropus is part of the Guildhouse Group and provides professional services in connection with property and construction, mainly in project management but also architectural, quantity surveying and facilities management services. The business as McBains (a partnership) dates back to 1926 and was converted to a corporate structure in 1995 and became part of the Guildhouse Group in 2000. Its clients are in both the public and private sectors and projects include retail, residential, health, education, office and leisure schemes. The Guildhouse Group is also involved, through other subsidiaries, in property investment and development. David Hudson has been a partner/shareholder in the business since 1984, became MD in 1995 and Chairman in 1999. Francis McPeake originally trained with McBains and then, after several years working in property development and construction and running his own construction management and building contracting businesses, he re-joined McBains in 1997 and became a Director in 1999.

  On 9 May 2001, Tropus was informed that, at a WNSL board meeting on 2 May, a decision had been made to "suspend/terminate all consultancy contracts pending review of the project by the Football Association and the working party to be set up by the Government". As there was no suspension provision in our contract we were given three months notice of termination of our contract, ending on 19 August 2001. It was, however, made clear to us by WNSL that if the project was re-activated in its then form we could expect to be re-appointed to continue to provide project management services.

  In this memorandum the expression "Senior Management Team" refers to the executive directors of WNSL. The term "Project Management Team" refers to Gary Hunt and the four full time managers from Tropus.


  During the course of the project we, Tropus, were concerned with various elements of the management of the project including the way the procurement process was managed, the accuracy of information provided to the Board and some decisions at senior management level. These concerns were repeatedly raised by Tropus with the senior management of WNSL.

  In the light of what we considered to be inadequate responses to our concerns and to our real concern of the possibility that the entire project might be aborted, we met with senior personnel within the FA on 13 July 2001 to inform them of our concerns and to put forward our professional opinion on how the project viability could be improved. We expressed the view that the cost of the project could be reduced by £50 to £100 million.

  The FA representatives asked us to write to the Chairman of WNSL telling him that we had concerns and, at a meeting with him and an FA representative on 19 July, we were asked and volunteered to prepare a report setting out these concerns. The final draft of this report (marked third draft) titled Report on Management Practices was delivered to WNSL and the FA on or about 2 August on a confidential basis with provision for strictly limited distribution. Gary Hunt, a full time employee of WNSL who had also expressed concerns about the management to senior managers within WNSL, contributed to the report. The report was not intended to be critical of any party and made no accusations of illegal or unlawful acts and was intended (by Tropus, at least) to identify what needed to be done if the project was to be carried forward successfully.

  The initial reaction of the FA and WNSL Board members we met was one of appreciation and relief. It was made clear to us that they considered that they had not been kept fully informed by the WNSL Senior Management Team of the circumstances which had led to the National Stadium Project being in the parlous state it was then in. We were asked to meet with the Patrick Carter Review Team, which we did on two occasions, and to be as frank and open with Patrick Carter as Tropus had been with the FA.

  Since the formal completion of our work on the project there has been very little communication with either the FA or WNSL. We believe that as a matter of courtesy, at least, we should have been kept informed of matters relating to our report. A de-briefing meeting was held on 17 January 2002 to inform us of the findings of the James report but we found this meeting unsatisfactory as we were neither informed in any detail of the findings of the James report nor could we agree that the actions taken since our report fully dealt with the issues raised. At that meeting we were told that there was no reason why we should not be re-engaged as, indeed, had (we believe) all of the other consultants. We expressed our ongoing concern that, given the criticisms of the management aired both in the Carter report and the House of Commons, our professional reputation might be damaged by people reaching the conclusion that such criticism was directed at us. It was stated that we were not being criticised but offered no support in making that publicly clear. It is clear to us that the FA's attitude towards us dramatically changed from about the beginning of September 2001 but we have had no explanation for that change in attitude.


  It became increasingly clear from early in 1999 that the project was not being managed in a way that we would have expected in that the processes and procedures did not follow those that we would expect to see on any significant project and particularly a major project such as this. We had established a structure and procedures that would have enabled the day-to-day project management to be carried out by the Project Management Team under the strategic direction of the Senior Management Team. The WNSL structure (a non-executive Board, a chairman and four executive directors) was developed along business management lines rather than project lines and, given that an early part of the project was always going to be the closure of the on-going business, may not have been, in our opinion, appropriate. The Senior Management Team consequently became heavily involved in the project management. It did not follow what in our professional opinion would be the usual and necessary project procedures.

  This opened the project to unnecessary dangers but arguably this could have been balanced by other management benefits. More directly damaging to the project, in our professional view, were the irregularities in the construction procurement and decisions made in regard thereto. However, we were not party to discussions at board level and, therefore, it was only in the latter stages of the project that we formed the opinion that the Board was not perhaps being kept fully apprised, and this opinion was confirmed at our first meeting with the FA.

  We approached the FA in July 2001 in order to provide it with sufficient information to enable it to consider the management structure and systems and to improve the project viability. It is disappointing to us, therefore, that despite the findings of the James report they have not, in our opinion based upon the information we have been given, fully addressed the issues we raised in our Report and in subsequent correspondence.

  We set out below the issues and concerns that we have raised.

Management Structure

  During the setting up of the project a Management Structure was developed, documented and put in place which sought to define the roles and responsibilities of the WNSL Project Team and its relationships vis-a"-vis other WNSL departments and external parties. This Management Structure recognised the agreed procurement route, programme and interests of third parties / External Project Stakeholders and had been submitted to and accepted by the WNSL Board.

  This Structure was, however, abandoned in 1999 and, in our opinion, no recognisable alternative structure put in its place. Management tasks were allocated, as far as we were aware, on an ad-hoc basis to team members, and to our knowledge, often involving significant duplication of effort and confused deliverables.

  Following representation by Gary Hunt and Francis McPeake a responsibilities matrix was drawn up but was never put into practice properly and, therefore, never addressed the problem.

  In our view, the consequence was that individuals within the Project Management Team were not allowed to manage roles and tasks effectively, with agreed strategies being changed without consultation. This led to poor utilisation of capabilities and low morale of Project Management Team, frequent duplication of effort, and a failure to work as an effective team. It also meant that consultants and third parties were often unclear as to which Project Manager they should be reporting to/liasing with on certain issues they were dealing with.

  We were aware that the JP Morgan/Chase Due Diligence Teams expressed concerns regarding the Project Management Team structure and lack of clear demarcation of responsibilities. We believe, they expressed serious misgivings about the Project Management Team's ability to deliver the Project.

Project Execution Plan

  In the early stages of the project a Project Execution Plan (PEP) was set by Gary Hunt and the Tropus Team governing the Project strategy, organisation, control, protection and approvals procedures. Such a document is usually a Client's Primary Control Document but as this project developed the PEP was not developed along with it and the formal protocols set out therein were not enforced.

  We believe, that the JP Morgan/Chase Due Diligence Teams were looking for evidence of, and adherence to the PEP as part of their review. They expected to see a PEP as an essential control document on a Project of this magnitude. We do not know whether their concerns were allayed on this matter.

Lottery Funding Agreement

  Until mid-1999, we understand that the Project was compliant with the terms and conditions of the Lottery Funding Agreement (LFA) and these were reflected in the Consultant Agreements and Project Execution Plan. Regular liaison meetings were held with Sport England and their advisors to keep them informed of the progress of the Project. No known areas of concern were reported. Thereafter, we believe, there were a number of breaches to the terms and conditions of LFA and we became aware of what might be described, in our view, as a cavalier attitude towards the importance of the LFA and the involvement of Sport England. Regular meetings with Sport England were unilaterally stopped with, in our view, a very dismissive attitude being adopted toward Sport England and the LFA.

Construction Procurement


  A recommended procurement strategy was put forward by David Hudson at the end of 1997 and, after further discussion with the shortlisted Design Team Consultants (circa 20 firms) and with major contractors, it was put forward and adopted by the Board. The strategy recognised the Project constraints and complied with the requirements of the LFA.

  The strategy separated the project into three:

    (a)  Demolition and enabling works (to be tendered as a lump sum contract);

    (b)  Shell and Core (to be tendered as a lump sum on a detail and construct contract); and

    (c)  Fit Out: (to be let as one or more lump sum contracts with the option to negotiate it (them) with the Main Contractor undertaking the Shell and Core Works).

  Multiplex (MPX) approached WNSL in the early part of May 1999 and an initial meeting was held with them on 26 May 1999. There then followed a proposal from MPX dated 21 June 1999, the essence of which was to make an early appointment of them as Preferred Contractor and to have an "open book" tendering process with them measured against an agreed cost plan with 100 per cent of the tendered sub-contract package savings reverting to WNSL and for a fixed per cent fee of two per cent. The bond being offered at this time was a 100 per cent Performance Bond.

  On the face of it the MPX proposals appeared very attractive and a decision was taken to pursue this approach as an option. We concurred with the view that the MPX offer was attractive, but we cautioned that it may not be delivered in the final analysis and may be a means by MPX to secure a preferred status with a hardening of the position once they were in a strong negotiating position. In late July 1999, we were asked to review the procurement strategy to facilitate the early appointment of a Preferred Contractor. As part of that review we sought the views of the heads of the Design Team Disciplines and these were taken into account in the report submitted to WNSL in August 1999. The recommendations Tropus made were designed to safeguard WNSL's negotiating position whilst maintaining a genuine competitive process, but they were largely ignored without seeking further clarification and without explanation being given.

  In order to test whether other contractors would be willing to submit proposals on a similar basis to those put forward by MPX, several UK and European contractors were asked to submit their own proposals for the construction of the stadium in a letter from WNSL dated 14 July 1999. We understand that the appointed quantity surveyor (QS) was not consulted in the drafting of this letter, which we regard as highly unusual given that the QS is tasked with managing the costs through the procurement and contract processes. Moreover, the basis of the proposals requested of the other contractors was, we understand, significantly different from that being offered by MPX. The Project Management Team raised this concern and the short-listed contractors were invited to submit revised proposals under cover of a WNSL letter dated 10 November 1999.

  It was at this time that the joint venture was formed between Bovis and Multiplex (BMX).

  On 13 September 1999 a Construction Procurement report was produced to update the WNSL Board on progress but in our view the report is misleading. The report says: "9.00 A full audit trail of submissions and responses is in existence to demonstrate the above and an independent review of the procurement process has been undertaken by David Hudson of McBains".

  David Hudson produced the report making recommendations on procurement as mentioned above, but WNSL did not provide him with the submissions or any documents submitted by the tenderers nor seek his views on the procurement actions to date as may be implied. He did not "review the procurement process".


  The invitation to make submissions suggested that non-compliant submissions would not be looked at favourably. In the event only two submissions were received, neither of which was compliant. Nonetheless, following receipt of BMX's proposals, negotiations were commenced and WNSL's negotiating team comprised Gary Hunt (of WNSL), Francis McPeake and Hugh Kimbell (from Tropus). In those discussions it was apparent that BMX were aware of information and documents that had not been provided generally to the tenderers. We are of the opinion that the tenderers were discouraged from submitting non-compliant proposals and were told that non-compliant tenders would not be considered with the result several tenderers did not submit a proposal at all. We do not believe that BMX received the same level of discouragement and despite the BMX tender being non-compliant, the negotiations were progressed.

  We made our views known to the Senior Management Team that BMX were being given preferential treatment during this period and that this might be raised by others acting on behalf of Sport England as well as the construction industry itself. This issue was regarded as sufficiently serious that David Hudson, upon learning of this, immediately sought a meeting with WNSL's Chief Executive to express concern at, what we felt was a departure from best practice and, in our opinion, an unfairness in the competition. Immediately prior to the meeting David Hudson spoke with the partner responsible for the project at the project QS, Franklin and Andrews to discuss the issue. He was similarly unhappy with what was happening and said that according to his sources there were "rumours of mal-practice in the marketplace" although neither he nor Tropus were making any allegations. David Hudson informed the Chief Executive of these comments. The Chief Executive reassured him that if the outcome were unsatisfactory then the project would be tendered as set out in the original procurement strategy. He also took the opportunity to ask David Hudson to tell Gary Hunt that, if he did not stop questioning the management of the project he would lose his job.

  Following two weeks of negotiations between the WNSL Negotiating Team and BMX, the WNSL Team formally reported to the WNSL Senior Management that, despite intense negotiations, it was not considered that sufficient common ground had been achieved to continue with the detailed negotiations with BMX due to BMX's stance on non-compliant issues. The Negotiating team were, therefore, very surprised when, on 14 February 2000, a recommendation went to the Board to appoint BMX as the Preferred Contractor.

  The minutes of the Board meeting of 14 February 2000 under Item 3, Contractor's Selection states:

    "The Board's agreement was conditional on the form of the construction contract being on an open book basis with savings accruing to WNSL". This requirement was never accepted by BMX and appears to have been abandoned as being a requirement of MPX following their appointment in September 2000. We do not know whether the Board's approval to this change was ever given.

  BMX maintained their non-compliant stance throughout the Preferred Contractor Period, which was even extended despite the fact, in our view at least, that an acceptable construction contract was unlikely to be agreed. We believe that the true extent of the differences between WNSL and BMX may not have been fully communicated to the Board.

  At the BMX start up meeting on 6th March 2000, the client Budget Book was made available to BMX to look at. We, in our experience, found this action to be quite extraordinary and reported the fact to the Finance Director.

MPX Appointment

  BMX was dismissed as Preferred Contractor in August 2000 and MPX, on its own, appointed in September 2000. This appointment was, in our opinion and experience, on less onerous and well-defined terms than the original appointment and we believe that the other short-listed Contractors may well have submitted competitive bids had they been given the same opportunity. It appeared to us that the appointment of MPX, so soon after the termination of BMX's appointment, was hasty.

  On 1 September a Multiplex Director wrote a two-and-a-half page letter to the WNSL Chief Executive, offering to build the stadium for a Guaranteed Maximum Price (GMP) of £326 million and asking that the letter was signed to signify acceptance. We believe that an officer of WNSL was involved in the drafting of the letter. The letter was signed by the Chief Executive (dated 1 September), accepting the offer "subject to board approval". No other rider, such as "subject to contract" or "not intended to create a legally binding agreement" or "Heads of Terms", was added to the letter. We also believe, that, as should have been the case, no legal advice was taken at this point.

  The first time we saw this letter was the day after the Chief Executive had signed it when it was presented as an agreed Heads of Terms. Gary Hunt and Francis McPeake immediately expressed the view that they considered that this letter might well constitute more than a simple Heads of Terms and might have contractual status because there was nothing stating the contrary intention in the letter, but there was clear offer and acceptance. Francis McPeake advised that WNSL's lawyers, Masons, should be consulted on the letter immediately to seek clarification on this point. As mentioned above, we believe that the lawyers were not consulted before the letter was put to the Board for approval.

  We understand that Gary Hunt advised the Senior Management team that the Project Management Team were concerned about the status of the letter as drafted and that the Board should be advised to hold its approval pending legal advice on its status. We believe that without taking appropriate advice the letter was put in front of the Board as only Heads of Terms and was approved as such. We understand that MPX were soon thereafter informed of the Board's approval without further qualification.

  As a further effort to mitigate the effect of the letter, we advised that it would be unsafe to make any payments to MPX under the letter which might be construed as "Consideration" and, therefore, strengthen its contractual nature. This advice was ignored and on-account payments were made to MPX.

  In our professional experience, we find it remarkable that this two-and-a-half page letter (with five pages of attachments) was signed on behalf of WNSL without appropriate legal advice being taken and that it was presented for board approval when there was any question mark regarding its legal status.

  The consequence of this action could be a potential claim from MPX should their appointment be terminated. A figure of £12.6 million has been put forward by MPX as the extent of its potential claim. This threat produces a disadvantaged negotiating position for WNSL when trying to negotiate the details of the construction contract.

  A major concern that we had at the time regarding the appointment of MPX is that the GMP referred to in this letter was not based upon an agreed set of Employer's Requirements as, at that time, they had not been completed. The basis of the MPX figure was a Franklin and Andrews Cost Plan, which represented an earlier design, circa June 2000. The Employer's Requirements continued to be refined and were not actually formally issued to MPX until 17 November 2000, and this led to an attempt by MPX to increase the GMP.

  Following the MPX appointment in September 2000 through a series of correspondence between MPX and the WNSL, with MPX offering to change from a GMP type arrangement to a lump sum arrangement. Again little consideration appears to have been given to the programme and budget considerations, the drivers that led to the original strategy, and without further reference to us or, we believe, to the Board for approval to the change. Such a change eliminates one of the main reasons for the desire to involve MPX, namely that they would operate an "open book" with all savings accruing to WNSL.

Negotiations Outcome

  Single point negotiations have been conducted with BMX or MPX since February 2000 and our belief in August 2001 was that WNSL were likely to face the prospect of paying a premium on the out turn cost.

  We believe, MPX (and BMX before them) have been able to take advantage of their exclusive position in respect of client changes and negotiate the price upward without providing WNSL with any real savings from their commercial knowledge, nor any reductions in risk allowances consequent on an increased level of detailed information or from their expertise on buildability.

  Significant preferred contractor costs had been incurred to August 2001 (fees payable to BMX/MPX), with the added threat of the MPX claim of £12.6 milion, with no tangible benefit to WNSL. It is our professional view, that the involvement of a preferred contractor was both premature and has worked against WNSL interests.

  Despite the extensive negotiations by August 2001 WNSL had still not received a compliant bid from MPX on acceptable contract terms, although the price had risen from £326 million to £360 million and was heading above £400 million.

  Three major concerns which Tropus raised were:

    (i)  The lack of justification given for MPX's increase in margin from two per cent (originally offered) to three per cent (representing £3 million extra).

    (ii)  The increase in bonus which MPX can earn through early completion from £200,000 per week in its 1 September 2000 offer to the August 2001 level of £350,000 per week.

    (iii)  The cost included for damages insurance by MPX, which has always been considered by WNSL's own advisors as being excessive.

  In our professional opinion, MPX were consistently being given a "less than robust" exercise in the negotiations and have never demonstrated the normal objective explanation of figures as they were presented. Tropus did not consider in August last year that the MPX construction cost offer had been properly interrogated.

  Similarly, we believe that negotiations with potential sub-contractors have not been conducted in WNSL's best interests. For example, at a meeting on 17 February 2000 a sub-contactor was told that the Project was "theirs" without ever having submitted any form of competitive bid and then subsequently, and not unsurprisingly, they returned a bid £15 million over budget.


  The original construction budget was set at £185 million in discussion with the then Trust and Sport England. This figure was discussed with all short-listed consultants and other industry figures and was considered to provide a reasonable budget for an 81,600-seat world-class stadium.

  This budget was reduced to £140 million (June 1998) and a Cardiff-type scheme was produced and costed by the Design Team in response to this new budget. The designs produced by the Design Teams were, however, considered inappropriate by WNSL Board due to the lack of back-of-house and other facilities and the budget restriction was lifted from all future design options from September 1998.

  Thereafter, the WNSL Senior Management Team never established a realistic budget and as a consequence the Consultants have never really been held accountable for designing a stadium within strict cost parameters. Rather the designs that developed were costed and the estimates accepted.


  The consultant team's appointments were set up with the architect, World Stadium Team (WST), identified as Lead Design Consultant with clear co-ordination and communication responsibilities, and with the intention that normal design management procedures would be followed, reporting to the Project Management team. In the event, these design management procedures across the consultant disciplines were not rigorously pursued by WNSL and this led, in our professional view, to a breakdown in co-ordinated information flow.

  No one individual within the Project Management Team was tasked with monitoring the consultant's appointments and performance (as we believe there should have). WNSL did not insist on the performance of some of the specific duties set out in the consultants" Scopes of Services including, for example, the Schedule of Deliverables.

  The lack of the effective design management on behalf of WNSL (which would have meant deliverables being monitored against the Master Programme and budget) led to design consultants not being controlled in the achievement of outputs and making numerous claims for additional fees.

  The Employer's Requirement's document, which is a key document in communicating the client's design, specification and other information, remained, as late as August 2001, an uncoordinated set of information and led WNSL's legal advisors (Masons) to register their concern with the level of comfort to be drawn from the design documentation.


  The functional requirements of the new stadium were established at the outset following extensive consultation with all Project Stakeholders.

  As the design progressed there was little or no further reference to the Project Stakeholders and at times the design developed in conflict with the operational requirements of the new stadium. There was significant redesign between the September 2000 Agreement with MPX and the production of the Employer's Requirements in November 2000 and this led to a number of difficulties between WNSL and MPX and the absence of a "compliant bid" even after nine months of detailed negotiations. All of this has also given rise to substantial fee claims from the consultants.


  Risk management processes initiated by the Project Management Team and procedures outlined and signed up to by all parties as a "must have".

  The risk management continued to be operated by the Project Management Team but it appeared that the Senior Management Team ignored the reported outputs.

  A legitimate way to handle risk is to pass risks to another party better able to handle them, and in particular, the contractor. We found it most surprising that the WNSL Risk Register was handed to BMX early on in its involvement. Instead of forming its own view on the project risks, BMX reproduced the WNSL list as a series of exclusions to their offer, so that the objective of passing risk to the contractor was, in our professional opinion, not achieved.

  The Project Management Team reported the risk exposure through the Budget Book until issue No 6 when it was assessed at circa £22 million. The Project Management Team was then instructed not to include the provision in future reports although the Project Management Team expressed concerns about this course of action. This directive was further confirmed at an internal PM Team meeting on 18 July 2000.


  Detailed programmes were prepared by the Project Management team but they were not effectively used as a management tool. For example, a Programme was produced early in early 1999 showing a projected start on site in September 2000 (Prog. Rev l) with completion October 2003. A statement was than made by WNSL, without reference to the Consultant Teams or the Project Management Team and which was not supported by a detailed programme, that a start on site date of March 2000 could be achieved.

  We believe that there was tendency on the part of WNSL to expect programmes to reflect what was intuitively believed rather than the programmes inform a sensible decision making process. The result was a failure to accept and promote a realistic programme, which everyone could buy into and become accountable for.

  The Project Management Team's programme indicated that an appropriate construction period was 37 months, including a sensible amount of float. WNSL accepted MPX's 39-month programme. This might be regarded as a prudent level of float (although this was not our view) but had added significance when a bonus arrangement was but in place whereby MPX are paid additional monies to better this programme. By mid 2001 MPX had a target programme of 34 months and a five-month allowance for risks on site. There is, therefore, a large potential bonus, we believe capped at £4.2 million payable to MPX for completing ahead of the 39-month programme.

  When the demolition package was tendered a programme was offered 12 weeks shorter than that included in either the WNSL or MPX programme. It was our expressed view that the savings arising out of this reduced period (ie a saving on the MPX preliminaries) should be to the WNSL benefit but as far as we are aware this was not pursued by WNSL.


  At the outset value management (VM) procedures and processes were established and a Value Management Facilitator appointed. All of the consultant appointments made provision for value management reviews to be held at key stages. The first VM Workshop was held in July 1998 but the Value Management session was inappropriately changed by WNSL to a cost reduction session and no further Value Management discussions were held.

  In our view the scheme has never been properly Value Managed. For example, this process would have, inter alia, questioned the inclusion of the hotel, commercial offices and banqueting facilities. These were only seriously questioned in the middle of 2001 after some £22 million had been spent on professional fees.

  It would be unusual, in our view, particularly on a scheme of this size, if properly conducted Value Management did not produce significant benefits to the scheme. On this basis, it is reasonable to conclude that optimum value has not been achieved on the Project.

  We are aware that the Board called for a number of Option Studies to be carried out circa November 2000. Initially, Gary Hunt and Sean Andrews (from the Tropus team) were invited to the first meeting to explore the options. On the agenda was the reduction / exclusion of the hotel, office and banqueting space and Gary Hunt and Sean Andrews expressed the view that the exclusion of these elements would achieve significant savings. The reporting on these cost issues was taken away from the Project Management Team and after that initial meeting neither Gary Hunt nor Sean Andrews were invited to attend further meetings to explore the Options. The Project Management Team was also not consulted further on the Option Studies subsequently carried out in April 2001.

  Tropus was given sight of the Option Study dated 19 December 2000 after it had been presented to the Board and could not understand the apparent lack of savings being suggested by the omission of the hotel, office space and Visitor Attraction as Option two. The figures did not concur with our own view on the savings that were achievable.

  It became apparent that the FA and the Government were looking to reduce the cost of the scheme considerably at the beginning of May 2001. The Project Management Team suggested that it should investigate again whether the scheme could be rationalised to achieve substantial savings and suggested that a sum in the order of £100 million was achievable. The Project Management Team were advised that it was not required. Again, we could not understand this attitude given the state of the project.

  On its own initiative, the Project Management Team carried out it's own Option Study and on 18 May 2001 Gary Hunt and Sean Andrews presented it to the Finance Director who, we believed, would be in a position to take it direct to the FA. Although the initial reaction appeared favourable, we believe the appraisal was not discussed at the time with other WNSL Directors or the FA.

  The Senior Management Team looked at a further option in late May 2001 and at a meeting on 29 May 2001, Hugh Kimbell (from Tropus) was asked to provide cost information in support of a conclusion that the rationalisation of the scheme was not viable. He expressed concern regarding the manner in which the figures were being calculated and it was left that the WNSL Finance Team would look into the figures further. No further input was requested of Hugh into the Option Study after this meeting.

  We formed the view that the true potential for improving the viability was not being communicated to the Board and the FA and it was this that led to the first meeting with the FA on 19 July. The initial appraisal work that had been presented to The Finance Director was expanded into a formal Tropus report entitled Preliminary Proposals to Improve Viability, July 2001.


  The land was purchased from Wembley London Limited but at the time of entering contracts the precise land requirement was not yet known. Therefore, the contract stipulated the transfer of the land upon which the existing stadium stood plus a further crescent of land, with the proviso that any part of this crescent which was not required for the new stadium would revert to WLL. In breach of the spirit of the agreement (but not the letter of it) the design team were instructed to place the boundary of the stadium on the outer extreme of the crescent, thereby insuring the maximum land take.

  This had three consequences. First, it damaged the relationship with WLL, which in turn had later consequences. Secondly, it dictated a stadium building, which was potentially larger, and therefore more expensive, than it needed to be. The Design Team has never carried out a detailed analysis but in our view at the maximum point the stadium boundary was in the order of 10 metres further out than it needed to be. This represents a very significant cost addition. Thirdly, it left no room for working space or access and egress which added to complications in design.

  The breakdown of the relationship with WLL led to them to be unwilling to grant any further concessions with regard to the land, which in turn led to more expensive design than might otherwise have been possible. Of particular note was the issue of the siting of the western foundation base to the arch, which was initially located on WLL land. Francis McPeake received a copy of a letter from Mott MacDonald dated 31 March 2000 to the WNSL confirming an instruction that they could proceed with the design on the basis that the arch foundation would be an isolated base some 15 x 20m on WLL land. Francis McPeake advised WNSL on 3 April 2000 that he considered that this would fall outside of the Transfer Agreement and that advice should be sought from Masons on this point and agreement obtained from Wembley. This advice was not taken up at the time and some nine months later, when WLL consent was not forthcoming, the design had to be reworked. The abortive design fees alone were in excess of £100k.


  Since our involvement came to an end in August 2001, we cooperated fully with the investigation by David James/Berwin Leighton Paisner into the issues raised by us. We have not been given any detail as to the findings of the investigation except that it confirms the accuracy of our report.

  In the light of this we have been somewhat bemused by the dramatic change in attitude toward us by the FA. Even more disturbing in our view was the dismissal of Gary Hunt, who had contributed to our Report. It is appears to us that his dismissal which may have been a result of "whistle-blowing". This view is supported by the fact that, as far as we are aware, all of the parties involved in the project when it was suspended (other than board members) have been re-engaged except Tropus.

  In September 2001, the existence of our report had become known. In the report we had made it clear that, due to circumstances that were well understood by the FA, we had not been able to access all of the relevant files to provide all of the supporting documentation. After providing the report we suggested to the FA and WNSL all files should be secured. We do not believe this was done.

  We have on several occasions, both orally and in writing, expressed our concern to the FA and WNSL that the actions taken do not seem to us to have addressed the issues and have asked for fuller explanation. We have not received any further explanation.


  This memorandum summarises the issues raised with the FA and WNSL in July 2001 and which were included in the report prepared and submitted by us in August 2001. Neither this memorandum nor the report were intended to be an exhaustive analysis of all management issues and decisions. The focus was on what we perceived were significant problem areas, which needed remedial action; we did not attempt to deal at all with what might be regarded as positive elements of the project.

20 May 2002

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