There are “serious questions” about how two companies fined for rigging construction tenders were linked to the construction of a hospital in Wales, a senior Senedd politician has said.
One of the companies developing the new Velindre Cancer Center in Cardiff and the parent company of another company were fined in Spain and Japan. Both are appealing against the fines.
Adam Price said they should be removed from the contract if their appeal is rejected.
Velindre NHS Trust told a Senedd committee last week that it had followed the law.
The new Velindre Cancer Center is being built in the north of the city at a cost of £885 million.
The plan has previously drawn criticism from environmentalists and many cancer experts who oppose its location.
However, health bosses say the center will be a “world-class facility” that will provide the “highest standard” of care.
One of the companies building the new hospital is Kajima Partnerships, whose parent company – Kajima Corporation – was ordered to pay a 250 million yen fine in March 2021 after being found guilty of violating competition rules regarding employment which was related to a bullet train project in Japan.
An appeal by the company, which argued that competition rules did not apply because there were no competitors and it was a private construction project, was rejected by the Tokyo High Court in March 2023.
However, Kajima Corporation has now taken the case to the Japanese Supreme Court.
Spanish construction giant Sacyr is also involved in the project.
In July 2022, it was one of six Spanish construction companies fined by Spain’s competition watchdog for colluding over public procurement contracts over a 25-year period.
Sacyr is also appealing the verdict.
The Velindre Cancer Center will open in 2027 [BBC]
Last week, senior managers at Velindre NHS Trust told Senedd’s Public Accounts Committee that the trust was aware of the case against Sacyr when it announced its choice of developers in July 2022.
The trust learned about the case against Kajima Corporation through the press in February 2023 – almost two years after the company was convicted.
The trust said its processes were carried out “to the letter of the law”.
They explained that Kajima Corporation had no link to the project, despite its subsidiary being one of the companies implementing the project.
They also said there is no legal issue with the contract because Sacyr’s appeal is still pending.
However, Sacyr must tell Velindre if there is “any change in circumstances”.
According to the trust, if Sacyr’s appeal fails, the company will have to demonstrate that it has taken steps to put things right – a process known as ‘self-cleansing’.
That is something that both companies are already working on, the trust told the committee.
“Like [Sacyr] If we could demonstrate that sufficient self-cleansing measures had been put in place to meet all the requirements then it would be likely that we would continue with that organisation,” the trust’s interim director of Strategic Transformation, Lauren Fear, told the committee .
“If they didn’t do that, that would be grounds for terminating the contract at that stage.”
‘Damage our reputation’
Speaking to the BBC’s Politics Wales programme, committee member Adam Price said: “What is the point of having procurement rules if companies facing the most serious allegations end up getting a major contract of this nature in Wales?”
The member for Plaid Cymru Senedd added that if the latest appeals are rejected, the companies should be “removed from the contract and serious questions should be raised about our public procurement process in Wales”.
“The reputation of the public sector, the reputation of government, is something precious and we should not be doing business with people convicted of these very serious crimes that damage our reputation.”
What does confidence say?
In his testimony to the committee, trust interim chief executive Carl James said: “In terms of reputation, that’s it, isn’t it?”
‘We work for the NHS so our reputation is sacred and we would never knowingly compromise it.
“What we have tried to do throughout this whole process is work with very experienced, knowledgeable people who have done this before, and what we, as with the tender process, as a public organization will do and always will do, is follow it rules according to the letter of the law.”
Dr. Penny Owen, member of the Co-locate Velindre campaign which opposes the plan, said: “You can say ‘we followed the letter of the law’ but that doesn’t necessarily mean the public will think you did it . the right thing.”
Both Kajima and Sacyr referred the BBC to the Velindre Trust’s comments on the matter.
The Welsh Government said: “We have been assured that Velindre NHS Trust has followed procurement legislation throughout the tender process.”
More about BBC Politics Wales on BBC One Wales at 10am GMT on December 1 and iPlayer
