PFI: Firm denies blame for failed £20m police station bill talks
- 21 February 2013
- From the section South West Wales
Dyfed-Powys Police have failed in a bid to cut an annual bill of £700,000 for a station that is closed to the public, the BBC has learned.
The Ammanford station is costing Dyfed-Powys Police nearly a fifth of its property management budget under a £20m private finance initiative (PFI) deal.
The firm which built it - T Richard Jones Betws (TRJ) - denies blame for the failure of talks to cut the bill.
The station is closed to the public as part of force-wide budget cutbacks.
Opened in 2001, Ammanford police station was built under a PFI deal agreed between the then Dyfed-Powys Police Authority and local building firm TRJ.
Under the terms of the agreement, approved by the Home Office, TRJ used their own resources to build the station with the force agreeing to pay an annual fee to use the building and to pay for its maintenance.
The station cost TRJ around £2.7m to build, which they funded via a bank loan.
The agreement between Dyfed-Powys Police and TRJ sees the police force paying on average £700,000 a year for the building over 30 years.
The figure represents 18% of the force's estates budget, compared to 19% in rate payments and 23% on energy bills.
By the end of the 30-year deal, the station could end up costing Dyfed Powys Police an estimated £21.7m, depending on inflation.
The payments are made to a company related to TRJ called Dolef Cyfyngedig, which is run by the same directors.
Despite the expense, Ammanford is one of several Dyfed-Powys police stations where the front desk has been closed to the public as a cost-saving measure.
Instead, the only public access to police station facilities in Ammanford is at a mobile van in a local car park for four hours on Tuesdays and Fridays.
"I know I've inherited it and I know it's very expensive and it takes up a lot of my estates budget," said Dyfed-Powys Police and Crime Commissioner, Christopher Salmon.
"I know that what we've ended up with somehow is a state-of-the-art police station in the wrong place for the wrong price.
"It's deeply disappointing and particularly frustrating when obviously the police service is facing tough financial times as many public services are, we have this contract that we appear to be tied into that does cost us a lot of money."
But an investigation by BBC Wales has discovered that representatives from Dyfed-Powys Police and the then police authority met on more than one occasion with representatives of TRJ last year to try and renegotiate the terms of the deal.
Those negotiations were unsuccessful.
Speaking publicly about the deal for the first time TRJ and Dolef director Owain Jones denied they were to blame for the failure of the talks.
He also says that Dyfed-Powys Police set the terms of the contract.
"Because there is bank funding involved with the project it is not easy to renegotiate the deal," explained Mr Jones.
"We went back to the funders who have provided information that has been passed on to Dyfed-Powys with regards to the costs of their request for any renegotiation of their repayments.
"We have a contractual obligation with Dyfed-Powys and we're always available to meet with them and answer any of their requests.
"It was Dyfed-Powys that set the contract and we had to employ advisors then on our side to agree the contract."
As the new commissioner, Mr Salmon said he would make sure that "no stone is unturned" to see if the issue can be addressed in the future.
Acting Chief Constable Jackie Roberts acknowledged that the Ammanford station is "too costly" and "does not provide the public with value for money".
"In recent years my predecessor, Mr Ian Arundale, met with the contractors in an effort to renegotiate the terms of the contract," confirmed Ms Roberts.
"However, this proved unsuccessful and currently there is no basis upon which we can seek to vary the terms of the contract in the absence of the agreement of the contractors."
A Home Office spokesman said: "The funding for this PFI was agreed under a previous administration following an application by Dyfed-Powys Police Authority."