Police probe cancelled £5bn helicopter PFI

The £5bn Private Finance Initiative for UK search and rescue helicopter services has been cancelled following claims of ‘irregularities’. A member of the preferred bid team – believed to be CHC Helicopter – is understood to have been wrongly given access to ‘commercially sensitive’ information. The matter is now under police investigation.

Ministry of Defence police have been called in to investigate the cancellation of the UK’s planned £5 billion (€5.7 billion; $7.9 billion) search and rescue helicopter Private Finance Initiative (PFI) after a member of preferred bid team, Soteria, admitted it had been assisted by a former government insider to obtain “commercially sensitive” information .

Helicopter PFI: 
cloudy circumstances

It is understood that CHC Helicopter, a helicopter transport services firm, gained access to information held by the project teams of the Ministry of Defence and Department of Transport which related to their evaluation of bids. Evidence emerged that a former member of one of these project teams had actively assisted the Soteria consortium, which also included Royal Bank of Scotland and French defence contractor Thales.

According to sources quoted in various media reports, the Coalition government still wants to see the privatisation go ahead but that it would not be right to proceed with the current procurement process. It is said to be considering how to maintain the continuity of services while pondering its options in relation to long-term arrangements.

Soteria had been due to take over search and rescue services from 2012 for 25 years, overseeing a process that would involve the replacement of Sea King helicopters with Sikorsky S-92As. The services are currently provided by the Royal Air Force, Royal Navy and the Maritime and Coastguard Agency.

In June last year, the search and rescue PFI was one of 12 projects to be “suspended or referred for consideration” by the UK Treasury in the wake of a government spending review. Chief Secretary to the Treasury Danny Alexander said at the time that the project was to be reviewed “as a matter of urgency”. By November of last year, it was being reported that the decision had been made to go ahead with the project.

Soteria said it was disappointed by the decision to now cancel the project and indicated that it would be prepared to bid again.