Call for publication of report on botched £30m procurement deal

Martin Shipton

A leading councillor has called for the publication of a report into a botched procurement exercise involving a former power station that has cost taxpayers more than £6m.

The Cardiff Capital Region abandoned its defence to a legal challenge over the awarding of a £30m contract to demolish Aberthaw Power Station in the Vale of Glamorgan, and agreed to pay £5.25m to the losing bidder, the Brown and Mason Group. Legal and other professional costs pushed the sum to over £6m.

The city region, made up of the 10 local authorities of south-east Wales, acquired the former coal-powered station – which occupies a 500-acre site between Barry and Llantwit Major – from energy giant RWE in 2022 for £8m.

Through its subsidiary business, CCR Energy, it then entered a competitive procurement process, which saw Erith winning the contract to demolish the plant, as part of plans to eventually turn the site into a green energy park.

The city region is also facing a six-figure bill for an independent review into the Aberthaw procurement process, which has been carried out by professional advisory firm Deloitte. The report has not been published.

At the time the contract was awarded to Erith – which will benefit from the scrap value of the power station – the city region’s accountable body was Cardiff Council. It carried out the procurement process for the demolition contract on behalf of the city region and CCR Energy, supported by external legal advice. The £6.16m and the Deloitte report have been financed by the city region from its own positive balance sheet. Through its £1.2bn City Deal – which is close to being fully invested – the lion’s share of around £700m has gone towards the £1bn South Wales Metro rail electrification project.

The remaining £500m was allocated to its wider investment fund, which as well as grants has investing equity and provided loans to companies operating across the region.

Reinvestment

By the end of its current 2025/26 financial year the interest and capital returns are forecast to reach £30m and will be used for reinvestment purposes. However, the current overall cost associated with the botched Aberthaw procurement is money that can no longer be deployed to back the growth of businesses in the region – and potentially reinvested multiple times.

A Cardiff Capital Region spokesperson said last September before the Deloitte report was complete: “As part of our mission to drive sustainable economic growth, Cardiff Capital Region (CCR) has developed future-focused initiatives to drive innovation and high-quality job creation across south east Wales. This includes the transformation of the former Aberthaw Power Station site into a flagship green energy park – an ambitious redevelopment that reflects CCR’s commitment to renewable energy, skills development, and new technologies.

“A legal challenge was brought by an unsuccessful bidder following a procurement exercise for the demolition contract, which was awarded in 2023. Subsequently, CCR and its accountable body at the time, Cardiff Council, agreed a global settlement. CCR will indemnify Cardiff Council in respect of its related legal and professional services costs in the sum of £909,983.

“These costs have been fully funded from commercial returns and interest accrued on capital balances, with no impact on core CCR programme budgets or any requirement for further public funding. The forthcoming independent review (by Deloitte) is examining the procurement process in full. Its recommendations will ensure that all issues have been identified and acted upon appropriately.”

‘Hidden’

Councillor Rodney Berman, leader of the Liberal Democrat Group on Cardiff council and the lead Welsh Liberal Democrat Senedd candidate for Caerdydd Ffynnon Taf, told Nation.Cymru: “I am concerned we haven’t had a chance to see this report. Something went badly wrong with the way the procurement was handled leading to millions of pounds of taxpayers’ cash being lost, so it’s vital we learn any lessons from what happened.

“And just like with the Epstein files, we don’t know what might be hidden from us if details aren’t placed in the public domain.

“As Cardiff council’s leader of the opposition, I hope I and other councillors have a chance to learn from any independent assessment of how this calamity happened on the Labour-run local authority’s watch. We need to ensure we take all possible steps to prevent something like this from happening again – so I sincerely hope this report will now be published without delay.”