curse of wembley strikes again Not sure whether the following...

curse of wembley strikes again Not sure whether the following was posted here before, but I placed it on another forum on 30/5/05. If the local construction companies in UK were right, the fixed price contract signed by Multiplex had an inherent loss of 150 million sterling pounds at the outset. As the costs of materials and labour have gone up since, the eventual total loss will be at least another 10% higher.

The penalties for non completion will soon kick in, at a further pound stg. 3 million per month payable should the program run on beyond March 2006.



Curse of Wembley strikes again
Media in London 30/5/05

Two sports ministers, the chief executive of the FA and the chairman of the stadium development company have all lost their jobs over the continuing saga that is Wembley. But the Multiplex founder's loss is the greatest of all, reports Steven Downes

So, the Curse of Wembley has claimed yet another victim. In Australia today, John Roberts, who founded construction firm Multiplex 43 years ago, was forced to stand down as executive chairman as the company was forced to admit that its losses on the benighted project would be at least £20 million.

Mr Roberts is in good company.

The Curse of Wembley might first have been detected in the mid-1990s, affecting Sir Brian Wolfson. During his reign as chairman of Wembley plc, the company which operated the old stadium and owned the site, Sir Brian had to deal with many of the costly business problems one might expect from running a dilapidated sports venue that, instead of being "the Stadium of Legends" of repute, was more often regarded as the stadium of fag-ends.

But at least the plc managed to sell off the site for £120 million of Lottery cash and Sir Brian got out with his reputation reasonably intact.

Not so Kevin Keegan, whose last match as manager of the England football team was an ignominious defeat against Germany, in the final game played at the old Wembley.

Sports ministers Chris Smith and Kate Hoey later lost their jobs, largely because they were unable to pull together the disparate interests of the numerous sports bodies who laid claim to a stake in the new National Stadium.

And even when one sports body, the Football Association, took on principle responsibility for the project, its chief executive, Adam Crozier, paid for the move with his job, as his board grew squeamish about the mounting costs.

It should not be forgotten that the new Wembley was conceived as a multi-sport, multi-purpose 100,000-seater venue which was to be the centrepiece of London’s Olympic bid, and was to have staged its first major event in 2003 with the world athletics championships.

Ken Bates, the colourful hotelier and property developer and then owner of Chelsea, was the man appointed by the Football Association to head up Wembley National Stadium Ltd once the site had been bought for the nation.

Mr Bates made short work of kicking out what he saw as expensive elements of the project – such as the running track – and instead introduced schemes for lavish hotel and conference facilities that saw the development price soar at one point to approaching £1 billion. It should be noted that in the time it took to discuss what might be included in the Wembley Stadium redevelopment, the Millennium Stadium in Cardiff was planned, designed and built, and all for £110 million.

It was Mr Bates, during his time in charge, who appointed Multiplex as contractors. It was to be the Australians’ first project of such scale in Europe, although they had built Sydney’s Olympic Stadium.

Multiplex clearly got the contract on price, as British contractors shied away from the irksome project and none believed it could be delivered for less than £650 million. Multiplex (who coincidentally at the time had offices at Stamford Bridge, the home of Mr Bates’s Chelsea, where they were building a new stand), said that they could build the new Wembley for just £500 million. There were gasps of disbelief from their rivals.

Yet even after delivering such a favourable deal, Mr Bates was not immune from the Curse of Wembley, as he soon lost his position with the FA, famously accusing his detractors as he left, saying, "Even Jesus Christ suffered only one Pontius Pilate - I had a whole team of them."

Mr Bates’s Wembley vision was thereafter stripped of some of its more expensive elements, such as the hotel.

But even with the pared down version, today Multiplex was forced to admit that it would not be able to deliver Wembley, at least in terms of cost, as it anticipates a costs overrun of at least £20 million. Whether they deliver the stadium in time for next year's FA Cup final remains moot.

The hit to Multiplex's bottom line saw the company suspend its stock from the Sydney exchange earlier today after seeing its shares lose some 42 per cent of their value so far this year – equivalent to A$2 billion in total.

Poor old Mr Roberts. Not only has his shareholding been hit and his job been lost, but his family has even guaranteed to cover Multiplex’s losses on the project of up to £20 million. Maybe this was one contract that Multiplex could have done without winning.