Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 80 - 99)

MONDAY 13 MAY 2002


80.  You are at the stage where everything is actually agreed between the parties and it is now simply for the bank and their lawyers to go through them and raise questions and have them answered? Once the bank has completed their review of the contracts and the conditions are fulfilled, you have a firm offer?

  (Mr Cunnah) There are many more contracts, with other stakeholders for example, but your analysis of the process is correct.

  John Thurso: I think I have got the answer I was after but I am not sure.


81.  ***.

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82.  ***.

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83.  ***.

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84.  ***.

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85.  ***.

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86.  ***.

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87.  ***.

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88.  ***.

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  Chairman: ***.

Alan Keen

89.  Frank Doran seemed to be implying that really the FA had paid too much for Wembley Stadium for a relatively small amount of land in the middle of a pile of ramshackle old factory units. If he was right in saying it was too much money, how much of that money was because it had the Wembley name and was at the time of the 2006 World Cup bid? Do you think that had a great influence on the price?

  (Mr Cunnah) First of all, can I take the opportunity to clarify what I know is a boring legal point but it was Wembley National Stadium Limited that purchased it and Wembley National Stadium Limited that received the Lottery money to purchase it. The 2006 World Cup bid did not have any impact on the timescale. As I said before, the purchase was on the basis of the valuation of the business and the World Cup 2006 bid was not a part of that.

90.  So it was not a part? It did not have an influence on the price but it was around that time, was it not? There was a great urgency to be able to say to the rest of the world "remember historical Wembley". I had the feeling at the time that that had a lot to do with it. When I visited it as part of the Committee I was really disappointed with the outlook from the balcony. When we were going to get an even larger stadium the outlook from it was going to be even more disappointing. We were all seriously disappointed that we did not own, for that money, very much of it. I could not help but think at the time that the World Cup bid had a lot to do with going for Wembley Stadium rather than looking for another location.

  (Mr Cunnah) I think it is true that the World Cup bid would have perhaps been even stronger had we Wembley underway but the advent of the World Cup did not have a bearing on the investment decision.

91.  Right. At that time of the bid did you feel there was any political pressure coming from somewhere within Government that you have got to get ahead and do this because Britain or England wants the World Cup? I wanted it, I am not disagreeing with it, but I am saying did you feel there were pressures coming upon the management of Wembley from outside from where political pressure comes. Government is at arm's length from virtually everything to do with sport. Tony Banks was not happy and I am not either. Do you feel political pressure made a difference to the decisions?

  (Mr Cunnah) No, I do not think the pressure made a difference. I think everybody felt pressure in terms of wanting the World Cup bid to be as good as it could be, or any other anticipated event, but that did not affect the decision-making. Perhaps what was more in mind throughout the process was the timetable and deadlines relating to the funding and the need to move on with the project so that we did have a new stadium in the foreseeable future.

92.  I have been pursuing that line of questioning because I passed the Dome this morning and that is a wonderful sight and Wembley does not compare with that, as far as prestige is concerned, other than the name itself. That is why I have always felt the pressures were based on the World Cup bid and that is why I am asking those questions.

  (Mr Cunnah) We have always seen ourselves as being slightly different to the Dome because we have the events for the stadium and those events will always be there when the stadium is ready to take them. That is how we perceive the difference between the two.

93.  I did not have enough time to read this Tropus report fully. I made various comments on a piece of paper but I had to rush through it very, very quickly. It is frightening really. My approach is one where I prefer—and I worked most of my life in the private sector—to put the past behind me and say whatever happened, we have got to look forward and make the right decisions. In a way this is what Mr James's report seems to be saying: "It is awful and we have got lots of criticisms but we have got no alternative but to press forward." I agree with that and that suits my personality really well. But when I look at the report it frightens me that we have still got the same company. Before you answer that, can you tell me how did BMPX become MPX? Did Bovis drop out?

  (Mr Cunnah) That is correct, Bovis did drop out.

94.  Why did that happen? Why did Bovis disappear?

  (Mr Cunnah) It is clearly a question to be directed at Bovis. I think they were unhappy with the terms that were being negotiated at the time.

95.  So it was their choice? It was not something in the report that made somebody say, "We do not want Bovis involved", it was the other way round?

  (Mr Cunnah) Bovis dropped out voluntarily, hence my response.[15]

  Alan Keen: It might have been connected, mind, but I do not want to put words in your mouth. Can we really forget all the problems? One phrase that I noticed particularly was page 24 where MPX are accused of having built in fictitious holidays of five weeks. Presumably they put that in to give them a cushion. Presumably if they had fictitious holidays it meant if you would accept the five-week holiday that gave them a cushion and yet the word fictitious must have been used because there was never a holiday, they were going to carry on working on a project like this. No one is going to pack in for five weeks of the school holidays. That is just one example.

  Chairman: Scuttling the budget, that was what it was.

Alan Keen

96.  Can we really be happy? Have the people you say have agreed the finances now seen the Tropus report? Are they giving money and saying go ahead and build this stadium to a company that seems to be guilty of these accusations? Have they seen the Tropus report?

  (Mr Cunnah) Yes. The board received the Tropus report in full. At that point realising that the allegations that were made were serious, the board decided that they needed to be properly investigated. Indeed, that is when Mr James was approached in order to do that work. On Mr James's recommendation WNSL appointed Berwin Leighton Paisner, a very eminent law firm. The board took very seriously the allegations and most particularly acted on the findings and the recommendations of Mr James. We as a board have to acknowledge that there were mistakes that were made. I, as a member of that board at the time, accept my part of the responsibility, but what we have since done is put in place every one of those recommendations to make sure that going forward the Government, and indeed the country, can have confidence that this project is now being run very correctly. We have had the value for money test that Cyril Sweett, the quantity surveyors, have undertaken to show that the contract is value for money. I think that can reassure you that the price that we are paying is appropriate for the work that is being done. We have also addressed the other concerns such as on corporate governance we have a board now which has been chosen on the skill sets required to deliver a stadium of this type rather than perhaps as representatives of the FA and Sport England as was designed before. So now we have people who are expert through their experience on marketing, finance and construction.


97.  Presumably you felt you had those before otherwise you would not have proceeded? You would not have proceeded on the basis of not having these people whom you felt you could trust and who were capable. How can you be more confident now than you were then when you presumably were confident?

  (Mr Cunnah) In reviewing the corporate governance with the Government, Sport England and the major stakeholders, the old board (which was made up of representatives of each organisation) had certain skills which were appropriate to the project but it was felt that—indeed Mr James recommended—for example that somebody with specific construction expertise should be appointed as a non-executive director. We three stakeholders picked up that recommendation and not only implemented Mr Jeffries as the new Chairman from the construction industry, but followed that logic through in order to get people in each of those areas in order to take the project forward to better effect. What we have also done is create some specific sub-committees that they and the executive directors will sit on to look in detail at those areas so that there is more co-ordination between the board and management team, and we believe that to be very productive as well.

Mr Doran

98.  Is that an admission that the contents of the Tropus report were accurate and are the people who were responsible for what went before still in post or have they moved on?

  (Mr Cunnah) Mr James identified in his report that there were some errors that had been made and, as I say, we acknowledge those. Some of the people who were involved are no longer with WNSL.

99.  But are the senior people still there?

  (Mr Cunnah) Again there are some senior people who are no longer involved and some who are. We have moved on with a revised team and we believe now that we are well set to move forward successfully. In addition, we have the Office of Government Commerce come to review our business in March and indeed they concluded that the project was well managed, tightly controlled and viable and recommended that it move forward to contract stage.

15   Note by WNSL: the position of BMX (the Bovis/Multiplex joint venture) is that the preferred contractor status was terminated by WNSL but WNSL indicated that should either Bovis or Multiplex wish to recommence negotiations with WNSL on an independent basis, WNSL would of course be willing to treat either party separately. Multiplex took up this opportunity but Bovis did not. Both were aware of the other's position. Back

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