APPENDIX E: REGIONAL PRIME CONTRACTING

The Defence Estates Regional Prime Contracting Programme is a method of introducing Public and Private Partnerships (PPP) to Britain's Defence industries. Under this programme, a single contractor is responsible for the design, integration and management of a facility, but the MoD would retain ownership and responsibility for the full capital and running costs.

In Scotland, the Regional Prime Contract was awarded to AMEC Turner Ltd, a joint venture between Turner Facilities Management and AMEC, one of the UK's largest international engineering services company in March 2003.

The contract is worth £460 million pounds over seven years from October 2003. It means that AMEC Turner is in charge of estate management, and construction and engineering services in every Ministry of Defence facility in Scotland. This includes work on capital works, known as "core works" and facilities management and property services, known as "core services".

Core services awarded in the contract include the maintenance of the whole of the Ministry of Defence's Scottish Estate, including major bases such as RAF Leuchars to unmanned communication links and weather masts. Core Works involve co-operation between AMEC Turner and the MoD in the building of a range of individual capital projects.

The Regional Prime Contract for Scotland was the first of five Regional Prime Contracts to be awarded and the first major capital project to be completed as part of the contract was the SSN berthing facility at Faslane. AMEC was responsible for the concept design of a jetty to accommodate the new Astute Class Submarines. This was developed into the Prime Contract for the full design and construction of the jetty. The project involved the provision of a new floating jetty, which included specialised cranes, all electrical and mechanical services, as well as a jetty support building.

AMEC has a history of providing engineering and technical services to the defence sector and has recently been involved in consultancy work for the MoD's next generation of aircraft carriers. The company also provides design, project delivery and maintenance support to clients in the oil and gas industry. This includes three of the world's biggest oil companies, Shell, BP and Exxon.

The non-executive chairman of AMEC is Sydney Gillibrand CBE who was previously vice-chairman of British Aerospace plc. He also holds the position of chairman of TAG Aviation as well as being a non-executive director in a number of other companies including ICL and Messier- Dowry, an aircraft-engineering firm that manufactures landing gear systems. Messier-Dowry landing gear systems are used on a number of military aircraft including the Eurofighter Typhoon and the Panavia Tornado. In 1991, Sydney Gillibrand co-wrote a book with Gerald A. Johnston entitled The Atlantic Partnership: An Industrial Perspective on Transatlantic Defence Cooperation.

AMEC's chief executive is Peter Mason, who was previously an executive director of BICC plc and chairman and chief executive of Balfour Beatty Limited. He was appointed to the position of CEO of AMEC in March 1996. Mr Mason is also a board member of British Trade International and chairman of the UK Government's export drive for the overseas sales of UK goods for the railway industry. Peter Mason is a major supporter of the British Government's Private Finance Initiative scheme, and much of this type of work goes through AMEC's Investment Division. AMEC built the first PFI hospital, opened in June 2000 by Tony Blair.

Others on the AMEC board of directors include Liz Airey, previously financial director of Monument Oil and Gas Ltd, and Martha Hesse, President of Hesse Gas Company. In 1986 President Reagan appointed Ms Hesse chairman of the U.S. Federal Energy Regulatory Commission. In addition to this, Martha Hesse was assistant secretary for management and administration at the US Department of Energy.

AMEC has worked on defence projects all over the world, including rescue and recovery support at the Pentagon in Washington D.C. after September 11. Also in the United States, AMEC has been involved in developing a Homeland Security Programme to plan, protect, respond and/or restore operations related to a myriad of emergency situations including natural disasters and terrorist attacks.
AMEC is also currently involved in the rebuilding of Iraq, and was awarded a $780 million share of a $1.6 billion contract with Fluor, a U.S. engineering company that donated to the Republican party in the run up to the 2000 U.S. Presidential election.

In January 2005 AMEC announced that it expected an increase in profits for 2005. For the first time, the results of AMEC's business in Iraq would be included to give the company an estimated pre-tax profit of £125.5 million.