Future Hospital contract agreements (FOI)

Request

There's a lot of speculation that the construction of the proposed future hospital is to be built by an alliance, one of whom is McAlpine, and that circa one million pounds a month of tax payers money is being paid to this company as a penalty for delaying the start of the project. I'm aware that there's a lot of fake news around these days, so can you clarify this point.

Response

There is a Pre-Construction Services Agreement (PCSA) in place with J3 which is a joint venture consortium; which includes Sir Robert McAlpine, FES Limited and the Garenne Group.

The contract is based on a standard New Engineering Contract 3, Option E (NEC3) with optional Z clauses.

The ‘Z Clauses’ are additional conditions of the contract which amend, alter, add or delete clauses contained in Schedules 1 and 2 and they take priority over the standard form Professional Services Contract Option E.

Provisions relating to any penalties are contained within these Z clauses. These clauses are exempt under the Articles 33(a), 33(b), 34 and 26 of the Freedom of Information (Jersey) Law 2011.

Articles applied

Article 33 Commercial interests

Information is qualified exempt information if –

(a) it constitutes a trade secret; or

(b) its disclosure would, or would be likely to, prejudice the commercial interests of a

person (including the scheduled public authority holding the information).

Article 33a – Trade Secret

The Z clauses have been drafted by Shepherd & Wedderburn, LPP. They deliver expert legal advice to commercial, public sector and private clients. Not all of the clauses drafted by Shepherd and Wedderburn have been exclusively used for this contract and as such they consider that they have certain intellectual property rights. Disclosure of these clauses though the process of a Freedom of Information response would likely confer a competitive advantage to rivals and would therefore be prejudicial to their professional services business.

It is considered that the likely consequences of disclosure far outweigh the interests of the public in this case.

Article 33b – Commercial Interests

The J3 Ltd Contract is a live contract documenting the current commercial position of all the parties. The market in which J3 Ltd and its constituent companies and onward supply chain (local, national and international) operate within is highly competitive therefore the release of the commercially sensitive terms and conditions of contract would significantly disadvantage all parties’ ability to compete in any future tender process whether in Jersey or overseas should the contract be made public.

Article 34 The economy

Information is qualified exempt information if its disclosure would, or would be likely to, prejudice –

(a) the economic interests of Jersey; or

(b) the financial interests of the States of Jersey.

The release of the sensitive commercial terms and conditions of the contract, at this point, will significantly disadvantage the States of Jersey’s ability to retain commercial advantage in any future tender process leading to the inability to secure best value for the tax payer and this will likely prejudice the States of Jersey finances as its bargaining power decreases.

It is considered that the likely prejudices to J3 Ltd and to the Jersey Economy outweigh the argument in favour of release of the contract in the public interest.

Article 26 Information supplied in confidence

Information is absolutely exempt information if –

(a) it was obtained by the scheduled public authority from another person (including another public authority); and

(b) the disclosure of the information to the public by the scheduled public authority holding it would constitute a breach of confidence actionable by that or any other person.

The States of Jersey tender information stated that the information received would be kept confidential. Should the States of Jersey release the commercial terms and conditions of contract in this instance, it would likely have a negative impact on the reputation of the States of Jersey.

It considered that the likely negative impact to Jersey’s reputation outweighs the argument in favour of release of the contract in the public interest.