Press Notice No. 2 of Session 2005-06, dated 22 September 2005
SECOND REPORT: THE REGENERATION OF THE MILLENNIUM DOME AND ASSOCIATED LAND (HC 409)
Mr Edward Leigh MP, Chairman of the Committee of Public Accounts, said today:
"Lest anyone be tempted to cheer the government for finally landing a deal for the future use of the Dome and redevelopment of the surrounding land, it is still uncertain how much the taxpayer stands to benefit. This has been a star-crossed project from the outset and the first sale competition had to be aborted. This led to much reduced market interest when the Dome and land came up for sale again. Given that there was but one viable bid in the end, only the incurably optimistic will be confident that value for money has been secured.
"The sale objectives were not helped by the belief of English Partnerships and the ODPM that the way to maximise market interest was to dissemble over how much land was on offer. It is to everyone's benefit that all potential bidders in such negotiations be treated with openness and given the same information. Again, the failure properly to assess potential additional revenue from the successful deal casts doubt on the ability of the government parties fully to protect taxpayers' interests.
"English Partnerships will need to stay at the top of its game as this venture develops. It must be as fully engaged as its private sector partners and monitor and manage its continuing stake in this deal so that taxpayers get the best possible value."
Mr Leigh was speaking as the Committee published its 2nd Report of this Session, which examined English Partnerships and its sponsorship department, the Office of the Deputy Prime Minister (the Department) on whether the best achievable deal had been negotiated, consistent with government policy to retain the Dome. In particular, the report examined the way in which the opportunity to develop the Dome and surrounding land had been presented to the market, how the value for money to the taxpayer of the eventual deal with Meridian Delta was assessed, and how English Partnerships plans to manage this complex new joint venture to best advantage in the long term.
The Committee found that, when the Millennium Exhibition project was first conceived in the mid 1990s, the expectation was that at the end of its year of operation the Dome would be demolished or moved, and that the cleared site would be sold for redevelopment under an existing masterplan for the Greenwich Peninsula. In 1997, however, the incoming Government decided that the Millennium Experience should continue as a 'lasting legacy' in Greenwich. English Partnerships, the national regeneration agency which owned the site, and which was due to receive it back after the New Millennium Experience Company's occupation, was asked to find a sustainable long term use for the structure, recognising its status as an iconic building.
The initial competition to find a future use for the Millennium Dome began in March 1999, but failed to find a buyer able to complete the deal on acceptable terms. The main reasons behind the lack of success of this original competition were the complex nature of the competition process and the difficulty the Government faced in deriving sufficient confidence about the deliverability of innovative proposals from bidders.
The initial offer of the Dome in the first sale competition of 1999 to 2001 was not accompanied by extensive tracts of development land, because Ministers had asked English Partnerships to find a use for the Dome itself. It was assumed at the time that the Dome could be viable in isolation, without more than a parcel of adjacent land for ancillary facilities. English Partnerships already had a separate development plan in place for the rest of its land on the Greenwich Peninsula. And throughout the attempts to sell the Dome the vendors were reluctant to encourage bidders whose only interest was in the development land and who did not really want the Dome itself.
In March 2001 a second sale process was initiated. It followed a different approach in adopting limited competition, against a background of little market enthusiasm for a rerun of open competition, widespread doubts about the risks and costs of participation, and little specific interest in the Dome. The scale of the final deal expanded to include over 100 acres more land than had been explicitly offered. English Partnerships' active promotion of the opportunity to potential bidders had been focussed on the 68 acres beneath the Dome and its immediate surroundings, in line with government priorities. Some bidders realised that more land could in fact be available. As a result of this sale process, in June 2004 English Partnerships concluded a deal with Meridian Delta Ltd and the Anschutz Entertainment Group (Anschutz) for the redevelopment over 20 years of the whole northern Greenwich Peninsula, including reuse of the Dome. The deal is complex. It preserves the Dome in place until 2018, housing a large indoor arena and leisure complex, and provides for a major office development and some 10,000 new homes on the adjacent land.
to view Report