Questions Raised Regarding Companies Involved in New Cancer Hospital Construction

A prominent Senedd politician has expressed “serious questions” regarding the involvement of two companies, previously penalized for bid rigging on construction endeavors, in the development of a Welsh hospital. One of the entities engaged in constructing the new Velindre Cancer Centre in Cardiff, along with the parent corporation of another involved firm, received penalties in Spain and Japan. Both organizations are currently contesting these fines. Adam Price stated that these companies ought to be dismissed from the contract if their appeals are unsuccessful. The Velindre NHS Trust informed a Senedd committee last week that it had adhered to legal requirements. The construction of the new Velindre Cancer Centre is underway in the northern part of the city, with an estimated cost of £885m. The project has previously drawn criticism from environmental activists and numerous cancer specialists who object to its chosen site. Nevertheless, health authorities assert that the facility will be a “world class facility” offering the “highest standard” of care. Kajima Partnerships, one of the companies involved in the hospital’s construction, has a parent company, Kajima Corporation, which was mandated to pay a fine of 250 million yen in March 2021. This penalty followed a conviction for violating competition regulations concerning work associated with a bullet-train project in Japan. The Tokyo High Court rejected an appeal by the company in March 2023, which contended that competition rules were inapplicable due to the absence of competitors and the private nature of the construction project. Nonetheless, Kajima Corporation is currently pursuing the case before the Japanese Supreme Court. Spanish construction conglomerate Sacyr is also participating in this undertaking. In July 2022, Sacyr was among six Spanish construction firms penalized by Spain’s competition regulator for conspiring on public contracts spanning a 25-year duration. Sacyr is likewise contesting this ruling. During the previous week, high-ranking officials from the Velindre NHS Trust informed the Senedd’s Public Accounts Committee that the trust had knowledge of the proceedings against Sacyr when it declared its selection of developers in July 2022. The trust became aware of the case involving Kajima Corporation in February 2023 through media reports, nearly two years subsequent to the company’s conviction. The trust asserted that its procedures had been executed “to the letter of the law”. They clarified that Kajima Corporation had no direct connection to the project, even though its subsidiary is among the firms carrying it out. Furthermore, they stated that since Sacyr’s appeal remains active, no legal impediment exists concerning the contract. Nevertheless, Sacyr is obligated to inform Velindre of “any change of circumstance.” As per the trust, should Sacyr’s appeal be unsuccessful, the company will be required to demonstrate that it has implemented corrective measures, a procedure referred to as “self-cleaning.” The trust informed the committee that both companies have, in any case, already undertaken such actions. Lauren Fear, the trust’s Interim Executive Director of Strategic Transformation, informed the committee: “If [Sacyr] were able to evidence that sufficient self-cleaning measures had been taken to satisfy all the requirements, then it would be likely that we would continue with that organisation.” She added: “If they didn’t, that would be grounds for termination of the contract at that stage.” In an interview with the BBC’s Politics Wales programme, committee member Adam Price remarked: “What’s the point of having procurement rules if companies facing the most serious charges end up with a major contract in Wales of this nature?” The Plaid Cymru Senedd member further stated that if the ultimate appeals are dismissed, the companies “should be removed from the contract and there need to be serious questions about our public procurement process in Wales.” He continued: “The reputation of the public sector, the reputation of government, is something precious and we should not be doing business with people that are convicted of these very serious crimes that causes damage to our reputation.” During his testimony to the committee, trust interim chief executive Carl James commented: “In terms of reputation, it’s everything, isn’t it?” He further stated: “We work for the NHS, so our reputation is sacrosanct, and we would never knowingly put that at risk.” James added: “What we’ve endeavoured to do all the way through this process is work with highly experienced, knowledgeable people who have done this before, and similar to the procurement process, what we will do and always will do as a public organisation is follow the rules to the letter of the law.” Dr Penny Owen, an advocate for the Co-locate Velindre campaign, which opposes the project, remarked: “You can say ‘we followed the letter of the law’, but that doesn’t necessarily mean that the public will think you’ve done the right thing.” Both Kajima and Sacyr directed the BBC to the Velindre trust’s statements concerning the issue. The Welsh government declared: “We have been assured Velindre NHS Trust followed procurement law throughout the procurement process.” Further coverage will be available on BBC Politics Wales on BBC One Wales at 10:00 GMT on 1 December and via iPlayer. Copyright 2024 BBC. All rights reserved. The BBC bears no responsibility for the content of external websites. Information regarding our approach to external linking is available.