Wednesday 29 February 2012

Ethical investments: The county council, the rugby boss and the arms industry

Carmarthenshire's press office was in jubilant mood on Monday when it announced that a company called R&A Properties had done a deal with Cassidian, a division of the multi-national EADS arms group.

What has that got to do with local government? You may well wonder. So let's leave the party, with its back slapping and popping champagne corks (we weren't invited anyway, citizens of Carmarthenshire), and root around in the shrubbery thanks to the national treasure which is Caebrwyn's archive.

Who knows, we may well meet a few interesting people and old friends along the way.

Back in 2009 the Ministry of Defence decided to sell its 37 acre site at Llangennech near Llanelli, and it decided to put the land up for auction. Before the auction could take place, Carmarthenshire County Council made a surprise last minute appearance and snapped it up for £700,000.

The site was then immediately sold on to a company called R&A Properties for, the council said, £700,000 plus legal expenses. Except that R&A Properties wasn't a company in the strict sense of the term, because to be a company you have to be registered with Companies House. And it did not even have a telephone number until after the deal had been done.

Everything seemed to happen at break-neck speed - a last minute scramble to secure the site for a company which was going to bring new jobs for the area was how the council's officers portrayed it. They also argued that it had been necessary to act in this way to stop the promised jobs going elsewhere, and presumably prevent anyone else who might not be "known to the officers" from buying the site at auction. But there are some nagging questions.

Despite the great rush to push the deal through, the council somehow found time to stick to at least some of the rules, and councillors were asked to approve it at a meeting of the full council. It hardly goes without saying that the discussion took placed behind closed doors, with press and public excluded.

Several concerned people took their worries to the press, including the Western Mail, which spoke to one councillor who did not want to be named. This councillor said that a number of councillors had felt very uneasy about what they were being asked to do by "officers" (no prizes for guessing which officer in particular). Councillors were not told who the backers of R&A Properties were, only that they were personally known to the officers. So that was all right, then.

Councillors were also told that the deal would create 100 jobs by the end of the year (2009) because R&A had a "blue chip" client lined up involved in defence procurement.

The Western Mail was also told that the deal had been subject to a thorough valuation involving all parties. The original report can be found here.

The story does not end here, of course, but let's take a moment to reflect and ask some questions.
  • It takes only minutes to buy a company off the shelf and register it with Companies House, so why was this done so late in the day, especially since there had obviously been in-depth negotiations, a full valuation had been carried out (according to the council's officers), and time had been found to schedule a slot at a council meeting to approve the arrangement?
  • Why were councillors not told the identity of the officers' acquaintances involved in the deal?
  • Why did the county council have to front the deal when, apparently, R&A had the money sitting ready and waiting to buy the site?
A couple of weeks after the council had approved the deal, the Llanelli Star discovered the identities of the two men behind R&A. They were chairman Mr Robert Lovering and chairman of the Welsh Rugby Union, David Pickering, a former rugby star himself. Meanwhile Mr Lovering had been telling the BBC that he hoped to conclude a deal with that "blue chip" company by the end of the year to create 70 jobs (30 jobs seem to have vanished in less than a couple of weeks).

It is not a state secret that the chief executive of Carmarthenshire County Council, Mark James, is very keen on rugby, so that would explain the "known to the officers" bit.

In honour of Mr Pickering's sporting connections, it was decided that the new venture would be called Stradey Business Park, even though it is nowhere near Stradey Park. It looks exactly like what you would expect from a former MoD establishment - big fences, redbrick buildings and some large grey metal sheds.

Rather strangely for a major business venture seeking new clients, Stradey Business Park seems to be a little publicity shy, and it does not have a website of its own, although there is a rather uninspiring website for R&A Properties (here). You can get a glimpse from a couple of estate agents who are trying to sell leases on the bits not taken by Cassidian, and if you want to talk to someone at R&A, the company's website directs you to a solicitor in Cardiff.

Back in 2009, the deal provided a photo opportunity for Cllrs Meryl Gravell and Clive Scourfield, as well as Mark James and Mr Lovering. Here they are celebrating:

Handing over the "keys" (with thanks to the BBC)

At the time, R&A said it planned to invest £1.5 million in the site over the next 6 months.

In November 2011 there was another photo opportunity when R&A unveiled a large solar panel installation on the roofs of the buildings in the business park. Robert Lloyd tells us that Mark James was once again on hand, excitedly stating:

“This is very innovative thinking by R&A Properties – especially so because of the location of the solar-powered panels on the roof which means that no-one can see the cells, yet they are able to produce thousands of pounds of clean energy which is used on the business park to drive industry. It is a win for the businesses and a win for the environment.”

The piece goes on to say that tenants on the site include "the public sector, an international defence client and an aerospace first tier supplier". The international defence client is probably Thales UK, which is involved in fitting out Warthog armoured vehicles. Presumably the aerospace client is different from Cassidian, and the public sector client would appear to be the NHS.

A month later, Carmarthenshire County Council's Regeneration Scrutiny Committee met to approve a whole string of grants to various bodies, including £281,000 to the Stradey Business Park (for some reason the company R&A Properties is not named in the council's record). Unsurprisingly, this decision was subject to the usual exemption (no press or public allowed).

At the same meeting, a grant of £1,004,232 was approved to a company called Dolawen Cyf, a company belonging to the TRJ Group in Ammanford (the same lot behind the Ammanford police station PFI initiative which is now causing the chief constable so many sleepless nights). Another exempt decision.

The latest press release from the county council's spin machine does not tell us how many jobs the Cassidian deal will create, but it is full of gushing remarks from both R&A and Cassidian about the council's approach to doing business, and they have every reason to be grateful.

Plaid Cymru has a long and honourable tradition of opposing the militarisation of Wales, so its councillors in Carmarthenshire may be surprised to see that the deal they were urged to approve has paved the way not just for Warthog armoured vehicles, but also for Cassidian, one of the leading suppliers of "unmanned aerial systems" (aka drones). Here's a picture of one:

Llanelli, here we come!


Anonymous said...

unusual cheap price of land. would have thought it was worth more than that....i wonder how much it would have been sold for if it had gone to auction? 37 acres plus the building (which wouldn't have been sold for a great deal due to it's age) in 2009, due to the recession start and location slots being more valueable compared to a another location usually around 8k an acre for industrial land, but other land depending on it's location, i've seen 2 acres sold for a million for prime residential use.. crazy as it sounds, a million for half a football pitch plot...

it did become an indoor gokart centre for a while in the mid to late 90s..

as for the price of the land, only some research can find that out. and one of 3 things.. either it was sold by the mod for too little, too much, or just right.

if it got sold to housing development,a contactor would have ended up spending up to a million knocking it down and wouldn't be in their interests..

which leaves a question.. why didn't the company make a formal offer on their own accord in the first place rather than waiting? suggesting a waiting game for a price to drop as it was for sale for quite a while.

As part of the sale a clause was put in place allowing the council to buy back a designated area for use as a football pitch for £1 any time before May 2014.
The new owners, R&A Properties are reluctant to give up this area of land for use as a soccer pitch.

funny how an auction was called off.. (anon2)

Anonymous said...


Following the joint £2 million acquisition of over 150,000 square feet at Llanelli Industrial Park, Mansford Holdings Plc and Pontrilas Timber & Builders Merchants Limited have announced the formation of a J.V. real estate company Mansford Pontrilas.

Located on a former MOD base at Llangennech, the site is approximately one mile from Junction 48 of the M4. David Cochlin of Cooke & Arkwright, who represented Mansford in the deal, said, “The 17 acre site enjoys full Objective 1 grant status and current occupiers include Pontrilas Group Packaging, Owens Transport and Brecon Water.

“It is a prime location and the redevelopment is sure to attract a great deal of interest from potential occupiers

(anon2)43,560 sq feet in one acre.

in 2003, 150,000 sq ft = 3.44 acres was purchased for 2m

Anonymous said...

another piece i am reading april 2009 - it was announced that a former ministry of defence supplies depot site at langenech in carmarthenshire will be turned into a business park through a 1.5m investment by R&A properties. The site is to be renamed stradey park business centre.


Cneifiwr said...

With all those security sensitive arms companies on the site, I doubt very much whether the council will ever exercise its option to buy a football pitch.

In the unlikely event that the Wales Audit Office ever gets round to looking into this deal, the declarations of interest by the relevant officers and councillors would make interesting reading.

Anonymous said...

Bloody hell! This looks scandalous!