Press Release - English Partnerships - Regeneration of the
Millennium Dome and Associated Land
12 January 2005
The second attempt to find a worthwhile use for the Millennium
Dome and associated land on the Greenwich Peninsula avoided many of
the problems of the earlier abortive sale competition. It has led
to a deal which looks capable of meeting government’s objectives as
the Peninsula is developed over the next two decades, Sir John
Bourn, head of the National Audit Office, reported today.
In reaching the deal with Meridian Delta Ltd and the Anschutz
Entertainment Group, English Partnerships learned lessons from the
first sale process and adopted a different approach. Given weak
market interest, the decision not to run another open competition,
but to inform the sale through comprehensive market testing, was
reasonable. Although not in a strong bargaining position, English
Partnerships avoided deal drift during negotiations with Meridian
Delta and Anschutz and concluded from their appraisals that the
proposed deal should be better than the main alternatives.
Achieving such a large and complex deal has taken since December
2001 when Meridian Delta Ltd became preferred bidder. It
encompasses most of the northern Greenwich Peninsula and at 190
acres, including some 20 acres held by the private sector, is much
larger and more suited to long term development of the site than
the original offer of only the Dome and the 68 acres beneath and
next to it. English Partnerships did not actively promote the full
amount of publicly owned land that might have been available to any
individual bidder. They did this in order to maintain interest in
the Dome and its immediate surroundings, basing this on ongoing
professional advice that this would be commercially prudent, as the
process evolved.
The NAO concludes that the deal addresses the Government’s
objectives: to realise receipts to the taxpayer (estimated returns
to the public sector over the lifetime of the deal are over £550m
in cash terms, or £216 million if discounted to present values),
and to ensure the development of the Dome and the surrounding area.
English Partnerships has contracted with a very strong private
sector consortium, and it is good that the current scheme provides
a comprehensive development plan for the northern Greenwich
Peninsula.
The agreement requires the retention of the Dome until at least
2018, at which point the partners can decide to retain or demolish
it. The report concludes that this is sensible, given the various
constraints on development of the Peninsula site.
There are still obligations and risks that need to be managed.
Doing the deal is only the start of the story. The ultimate success
of the deal depends on how well those obligations and risks will be
managed. But the agreement provides a contractual basis for
achieving the government’s objectives.
The report also sets out the main factors which led to the
failure of the first competition in 2001. Too many parties were
involved in the decision making and key players such as the New
Millennium Experience Company and English Partnerships did not have
the same aims. Furthermore, the stated objectives which bidders
were asked to meet were too complicated and difficulties at the New
Millennium Experience Company, including the incomplete record of
assets and liabilities, affected the first competition.
Sir John Bourn said:
"In difficult circumstances following the failure of the
first competition, English Partnerships and the Office of the
Deputy Prime Minister have worked hard to get a deal. There are
risks still to be managed but local residents, and indeed the
taxpayer, stand to benefit from it."
Notes for Editors:
- Meridian Delta Limited is a joint venture company between Lend
Lease, an Australian listed real estate company, and Quintain
Estates and Development plc. Lend Lease holds a 51% stake in
Meridian Delta with Quintain the remaining 49%.
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 01/05
All enquiries to Mark Strathdene, NAO Press Office:
Tel: 020 7798 7183
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