by Edward Simpkins
Nomura, buyer of the MOD married quarters, has been eliminated from the three-strong shortlist for the massive DSS Prime PFI project, but the DSS has failed to select a winner.
A final decision on who has won the right to buy and operate the 1.7m m2 (18.2m sq ft) DSS estate is not now expected until the end of July. Nomura’s Opus consortium includes Jones Lang Wootton and Healey & Baker along with Procord, Phoenix Inns and Tarmac Servicemaster.
A preferred bidder was supposed to be announced this week, but the project timetable was thrown into doubt after the General Election was called. Last week, the DSS concluded that two bids were too close to separate, but Nomura’s Opus consortium was rejected.
The remaining bidders in the race are Partnership Property Management – led by Goldman Sachs and including Berkeley Group, Amec and Richard Ellis – and the Mapeley Holdings consortium, which features Burford and Argent, DTZ Debenham Thorpe and Daiwa, plus financiers NationsBank and Bankers Trust.
“Somehow or other the competing bids hit the mark better,” said a spokesman for Opus.
The cost of bidding is put at several million pounds, but it is difficult to arrive at an exact figure because some members of consortia often contribute sweat equity. Agents at Healey & Baker spent several weeks valuing benefit offices in the North.
John Mason, managing the Prime scheme at the DSS, said: “Opus was certainly very competitive, but two of the bidders were extremely close in terms of price and quality.” He denied that the DSS had shied away from making a decision so soon before the election.
It had been expected that only the winning bidder would have to carry out detailed surveys of the estate, but Mason said: “Elements of conditionality – things that could alter the price such as bids subject to structural surveys – need to be teased out.”
He added that other issues to be resolved with the two remaining bidders include the quality of service delivery, the element of risk transfer, and price. “Hopefully they will sharpen their pencils and make the price a little more aggressive,” he said.
