Attempts to acquire a KPMG report critical of Kier Highways, have been thwarted by an Information Tribunal. The ‘Project Verde’ audit, which followed allegations of contract non-compliance and exaggerating claims (to include adding uplifts not incurred) was considered to have been ‘provided to National Highways in confidence’ (exemption – Section 41 of the FoIA).
Kier Highways, not subject to the Freedom of Information Act, were however permitted to present arguments to the Tribunal and it was evident why Kier did not want the KPMG in the public domain. A senior executive within Kier advised the Tribunal the draft KPMG report contains, what he believed Kier had demonstrated to be, wholly incorrect, opinions that, if taken out of the context of Kier’s rebuttals supported by detailed information and evidence, would support the allegation that Kier was inflating its costs when making Green Claims to recover more than it had actually incurred. KPMG was accused of not understanding the simple processes, the issues we had conveyed to them (read the transcript here).
- Note: The tribunal has not decided Kier did not inflate claims, simply that the report, a draft, was obtained in confidence and therefore falls within the exemption.
Why the Authority failed to act upon the report and put an end to Kier’s conduct, remains unexplained. Incredibly, the ‘draft’ report was never finalized; a smoking gun if ever there was one?
The matter appeared to be less about commercial sensitivity and more concerned with commercial embarrassment; the report had the potential to damage the reputation of Kier which would harm its commercial interests significantly. However, it appears this had already occurred. Kier has been kicked off of the Area 9 contract by Highways England, when asked why, the same manager responded “Our quality submission was not as good as Colas” adding “and our price'”
The Kier manager made no mention of the corruption investigation reported shortly after the 11/01/20222 hearing:
Separate papers also show that workers employed by the main contractor, Kier, for another scheme ‘manipulated’ tender processes, awarded a subcontract worth £1.4 million in breach of rules and that this was ‘influenced by bribery’. The claims were in relation to a stretch of the M6, junctions 13 to 15, also being converted. The internal National Highways papers state: ‘Evidence found during this investigation supports the allegations made but is insufficient to identify individuals.’ Read more here.
Whilst the Tribunal accepted there is a clear public interest in transparency in relation to our concerns, in particular, how National Highways dealt with these concerns and therefore there is a public interest in the KPMG report and related correspondence, they concluded this public interest is limited. Really? 1,000’s of drivers, fleets, hauliers or their insurers (Third-Parties) have been subject to Kier’s conduct which the Authority failed to stop resulting in the contractor profiteering in the £millions.
When the conduct could be defended no longer, you might have expected National Highways to tell Kier to comply with the 07/2014 contract, the section that was to protect road users from such abuse. But no, the Authority changed the contract so Kier was no longer shackled by the common-cost (£) plus fixed uplift (%) process. Contrary to the ‘one rate for all’ approach of HHJ Godsmark (para. 25), National Highways effectively enabled the contractor to charges Third-Parties higher rates than they were presented. This then paved the way for their common lawyers, who had written about ‘Inflating Costs to Make a Profit‘, to demand these higher costs.
We will continue to stand up to the bully in the playground.
smoking gun image courtesy of Charles Knowles
Manager’s statement here (registered users)