A whistleblower exposed a conflict of interest at the heart of a £170m High Speed 2 contract, it emerged yesterday, triggering fresh criticism of the government’s handling of procurement on its flagship £56bn rail project.
American firm CH2M was awarded the development partner contract on HS2 in February, beating Bechtel and a joint venture between Mace and Turner & Townsend.
At a Transport Select Committee session yesterday, it was revealed that a whistleblower had alerted Mace to the possibility of a conflict of interest regarding HS2’s former chief of staff Chris Reynolds.
Reynolds left in June last year and then took up a role at CH2M in September. Mace queried the award after being alerted to Reynolds’ move, and that eventually led to CH2M’s withdrawal of its interest from the contract in March. CH2M had told HS2 Reynolds had a minimal role in the preparation of the tender, but was going to be used if it was successful with the bid, which HS2 did not find satisfactory.
Transport secretary Chris Grayling told the committee: “The company involved here has just lost a very substantial piece of business as a result of a breach in the rules, that has, in this particular circumstance come to our attention because somebody inside the organisation told one of the other bidders.”
Grayling said the onus was “first and foremost” on the firms bidding to conform to the rules, rather than on the Department for Transport (DfT) or HS2 to look for possible concerns.
Chair of the committee Louise Ellman expressed her incredulity that the onus to flag any issues lay with the bidders as opposed to the government or HS2, “the procurer of this major, major contract with very large amounts of public money” behind it.
“Is that right? Who is responsible for identifying conflicts of interest, apart from whistleblowers or the media? Who within the company?” she asked.
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “The DfT must take far greater responsibility for the mess that is HS2.
“When multi-million pound contracts are being handed out, the very least you would expect from the government is that thorough due diligence is undertaken to ensure taxpayers’ money is properly looked after.”
Shadow transport secretary Andy McDonald said: “It is remarkable for the transport secretary to be so out of step with HS2 chair David Higgins and claim that the failings around the conflict of interest scandal at HS2 Ltd are nothing to do with him. This cavalier attitude towards the nation’s finances risks undermining public support in important infrastructure projects like HS2.”