Revealed: Plan to create national stadium would have ended in failure if retender plan had gone ahead
Wembley stadium would never have been rebuilt if proposals that the client should relet the contract had been pushed through, according to a report published today.

In a wide-ranging inquiry by the National Audit Office into the delays and troubles that have beset the project, the parliamentary spending watchdog concluded that it would have collapsed if experts had insisted on retendering.

The report also pinpointed failures by the client to follow proper business procedures and revealed the intense scrutiny to which the project has been subjected.

The NAO said the decision not to tender again, made early last year, was taken despite a critical report into the procurement of the scheme by David James, a specialist in corporate governance.

The report said that while James found that in normal circumstances retendering would have been appropriate, client Wembley National Stadium Limited said that course of action would have been "unfeasible for practical and financial reasons".

James agreed. He concluded in his report, published in May 2002, that proceeding with the contract agreed with Multiplex was the best-value option.

Retendering would have put at risk the commitment of the banks to the project

National Audit Office report

The report said: "Retendering would have been likely to take at least 12 months, jeopardise the contract prices that had been negotiated, and put at risk the commitment of the banks to the project … All in all Wembley National Stadium Limited felt that retendering would lead the project to collapse."

The audit commission document revealed the main findings of lawyer Berwin Leighton Paisner, which assisted James with his report into the decision to appoint Multiplex as contractor in September 2000.

The lawyer found that WNSL had:

  • Failed to adopt a formal procurement process, including the creating of proper documentation
  • Conducted a parallel procurement process, making it difficult to have fully competitive procurement
  • Held meetings and dialogues with Multiplex prior to a formal procurement process, potentially giving the firm a competitive advantage over other bidders.

The NAO report exposed the scrutiny to which the project was subjected.

Six reviews were undertaken in 2001 and 2002 to assess whether the government ought to give the project the go-ahead. The scheme was finally backed in September last year and work has started on site. The reviews were carried out by:

  • Businessman Patrick Carter, which decided whether the national stadium should be built in Wembley
  • PricewaterhouseCoopers, which advised on corporate governance
  • Citex and Sport Concepts, which evaluated whether a platform design for staging athletics was feasible
  • Cyril Sweett, which decided whether the Multiplex contract was value for money
  • Davis Langdon & Everest, which reviewed the delivery risks with the Multiplex contract
  • The Office for Government Commerce, which carried out a so-called "gateway review" over whether the project could be taken forward successfully.

On the money: Multiplex’s contract details

The fixed price for Multiplex’s contract for Wembley is £445m. If the contractor builds the stadium for less, it will keep the difference, but it will also have to bear the costs of any overrun, except if there is a change of design. If the stadium is handed over late, Multiplex will be liable, unless it is granted an extension. Multiplex has a £60m performance bond, underwritten by an insurance firm, if it fails to deliver the scheme.