Value for money ??

Discussion in 'Current Affairs' started by stirling2, Aug 23, 2008.

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  1. The former arms depot at Broughton Moor, Maryport, Cumbria has been sold by the MOD to two local councils.
    The 1,050 acre site is one of the biggest brownfield sites ever to come up for sale, you would think MOD would ask a fair price for such a large parcel of land given that it is scratching its arse for every penny.......
  2. It's not out of the question that the nominal sum allows MOD to recover some of the revenue from any further contracts with the private sector.

    Legally money has to change hands in any contract, and the nominal sum approach is quite common.
  3. Point taken Karma....but we are talking MOD and local councils here, a bigger pair of fcukwits you would be hard pressed to find.
  4. Former arms depot is sold for £1 Up here in Deepest Darkest Cumbria this sad tale has been going on for the best part of ten years! lots of talking and promises but not much else has happened, one of the biggest stumbling blocks has been the cost of the clean up operation! Don't be so quick to slag off the MOD for letting it go for the Nominal one pound, how much has it cost the MOD to maintain this dissused site since its closure is a question I have often wondered? I dare say the MOD are happy to have at long last got it off their books!
  5. No mention, so far, of the decontamination costs.
  6. Even with the decon costs, if such a large site was put up for auction some ''Rugs R Us'' like Trump could pay way over the odds for his latest pleasure park. The Jocks have already told him to sling his hook and as this is brownfield he would probably get his way....just a thought.
  7. Seaweed

    Seaweed War Hero Book Reviewer

    MoD savings in maintenance and security costs? It could be just like taking stuff out of your garage to the tip so you can get the car in.
  8. Just to illustrate what would have been involved. Any sale would involve the seller (MOD) a number of potential buyers and each of the councils involved, so anything from three to seven or so entities. I'd anticipate three potential buyers in detailed negotiation stage. Whilst the buyers are likely to be taking on the cost of decontamination any final agreement would probably need either a clear indication of Detailed Planning Permission, or actual DPP, since any buyer would need to have a pretty robust business case for their major shareholders to approve the purchase. That would lead to three negotiations in parallel, each with three parties involved. Negotiation teams to support that commitment, including the legal fees involved (£2k per day per person), would be pretty significant and I'd anticipate it could easily cost MOD anything from £15M to £25M to actually sell the land, particularly if there is much in the way of risk transfer to a buyer or a revenue stream back to either the local authorities or the MOD. Similarly it would cost the LAs and any potential buyers a fair amount as well.

    OK, I'm not sighted on the contract :) but from what little information is available I would say this approach significantly reduces MODs commitment to the sale, simplifies the negotiation, because the seller (LAs) now has a vested interest in getting a decent return from the sale and reduces the risk that planning issues delay getting it off MODs hands.

    All that said, the LAs won't be able to afford the type of lawyers it would need to get the best from the sale, so there is a risk that they end up not realising the value of the land or don't assure themselves of some form of decent revenue stream following the sale. If there is some kind of revenue stream back to MOD there is a risk of it not being particularly good, because they've handed off the responsibility to the LAs.

    It might not be a good deal, but if the issue has gone on for ten years already it may just be a question of not continuing to throw money at it, making it the LAs problem.

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