HC Deb 25 October 1994 vol 248 cc597-8W
Mr. Wilson

To ask the Secretary of State for Scotland (1) if he will make a statement on the value, progress and penalties associated with the M74 contract awarded to Messrs. Castelli and Girola;

(2) which comparable projects carried out by Messrs. Castelli and Girola persuaded his Department that they were eligible for consideration as tenderers;

(3) if he will list those occasions and locations on which officials of his Department met representatives of Messrs. Castelli and Girola prior to the award of the M74 contract;

(4) if he will list the value of tenders submitted for the M74 contract which was secured by Messrs. Castelli and Girola;

(5) what steps he took to ascertain that Messrs. Castelli and Girola were competent contractors, prior to the awarding of the M74 contract.

Lord James Douglas-Hamilton

The requirements of the European Union procurement directive have meant that our major road construction contracts are open to tenders from companies throughout the EEC. In 1992 a joint venture company formed by Castelli and Girola submitted an application for inclusion in the tender list for the contract to upgrade the A74 to motorway between Eaglesfield and Kirkpatrick Fleming.

To support their tender application they submitted considerable documentation covering numerous examples of major road contracts carried out by each firm. Scottish Office officials met representatives of the joint venture in October 1991 in Edinburgh regarding an earlier application for an A74(M) contract and satisfied themselves that they were major contractors with worldwide experience of road construction. The two companies were also subjected to the normal vetting procedures with regard to their financial standing.

The value of the successful tender submitted by the joint venture was £23,403,562. Other tenders submitted for the contract were:

  • £24,902,956
  • £26,186,241
  • £26,789,409
  • £29,517,413
  • £29,994,952
  • £30,343,045
Although well advanced, the contract is running late and the completion date next month will not be met. The penalty for late completion without mitigating circumstances is £250,000 per month.