There are “serious questions” over how two firms fined for rigging bids for construction projects came to be linked to the building of a Welsh hospital, a senior Senedd politician has said.
One of the companies developing the new Velindre Cancer Centre in Cardiff and the parent company of another were fined in Spain and Japan. Both are appealing against the fines.
Adam Price said they should be removed from the contract if their appeals are rejected.
Velindre NHS Trust told a Senedd committee last week it had followed the law.
The new Velindre Cancer Centre is being built in the north of the city at a cost of £885m.
The scheme has previously attracted criticism from environmental campaigners and many cancer experts who are opposed to its location.
However, health bosses say the centre will be a “world class facility” providing 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 fine of 250 million yen in March 2021, after being found guilty of breaking competition rules in relation to work linked to a bullet-train project in Japan.
An appeal by the company, arguing that competition rules did not apply because no competitors existed and this was a private construction project, was dismissed by the Tokyo High Court in March 2023.
However, Kajima Corporation is now taking the case to the Japanese Supreme Court.
The Spanish construction giant Sacyr is also involved in the project.
In July 2022, it was one of six Spanish building companies fined by Spain’s competition watchdog for colluding over public contracts over a 25-year period.
Sacyr is also appealing against the judgement.
Velindre Cancer Centre is due to open in 2027 [BBC]
Last week, senior managers from the Velindre NHS Trust told the 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 found out about the case against Kajima Corporation in February 2023 via the press – almost two years after the company was convicted.
The trust said its processes had been carried out “to the letter of the law”.
They explained Kajima Corporation had no link to the project despite its subsidiary being one of the companies delivering it.
They also said because Sacyr’s appeal is still live, there is no legal issue with the contract.
However, Sacyr must tell Velindre if there is “any change of circumstance”.
According to the trust, if Sacyr’s appeal fails, the firm will have to show it has taken steps to put things right – a process known as “self-cleaning”.
That is something both companies have already engaged in anyway, the trust told 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,” the trust’s Interim Executive Director of Strategic Transformation Lauren Fear told the committee.
“If they didn’t, that would be grounds for termination of the contract at that stage.”
‘Damage our reputation’
Speaking to the BBC’s Politics Wales programme, committee member Adam Price said: “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 added if the final appeals were rejected then the companies “should be removed from the contract and there need to be serious questions 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 that are convicted of these very serious crimes that causes damage to our reputation.”
What does the trust say?
In his evidence to the committee, trust interim chief executive Carl James said: “In terms of reputation, it’s everything, isn’t it?”
“We work for the NHS, so our reputation is sacrosanct, and we would never knowingly put that at risk.
“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, a member of the Co-locate Velindre campaign which opposes the scheme, said: “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 referred the BBC to the Velindre trust’s comments on the matter.
The Welsh government said: “We have been assured Velindre NHS Trust followed procurement law throughout the procurement process.”
More on BBC Politics Wales on BBC One Wales at 10:00 GMT on 1 December and iPlayer
