May 17, 2020

Eurostar stake sold by UK government for 757 million

European procurement
Eurostar
rail freight
Royal Mail
Admin
2 min
The sale of the treasury share has raised a sizeable amount, as PM David Cameron continues to sell off public assets
Follow @SamJermy and @SupplyChainD on Twitter.The UK government has announced it has sold all its shares in Eurostar to an Anglo-Canadian consortium in...

Follow @SamJermy and @SupplyChainD on Twitter.

 

The UK government has announced it has sold all its shares in Eurostar to an Anglo-Canadian consortium in what will be a £757 million deal.

Under the agreement Caisse de depot et placement du Quebec (CDPQ) and Hermes Infrastructure have agreed to acquire the Government's 40 percent holding for £585.1m. In addition, Eurostar will redeem the Government's preference share, raising a further £172m.

The government has been trying to rid itself of the Eurostar stake since 2013 when it outlined in the Autumn Statement and National Infrastructure Plan that it hoped to make £20 billion from corporate and financial asset sales by 2020.

Chancellor of the Exchequer George Osborne said: "It's great that we have reached an agreement to sell the UK's shareholding in Eurostar that delivers a fantastic deal for UK taxpayers that exceeds expectations.

"Investing in the best quality infrastructure for Britain, getting the best value for money for the taxpayer and tackling our country's debts are key parts of our long term economic plan, and in today's agreement, we are delivering on all three."

The remainder of Eurostar is owned by SNCF, the French state-owned rail operator, which controls 55 percent, and the Belgian government.

Manuel Cortes, leader of the TSSA rail union, added: "The reason that France and Belgium already own the majority stake in Eurostar is that they believe in running a publicly owned railway for the benefit of everybody.

"One-eyed Osborne, on the other hand, prefers the private English model where fat cat bosses are at the front of the queue, way ahead of the passengers".

The news comes off the back of the publicly owned East Coast mainline service being privatised ahead of the UK general election in May, with the service delivering over £1 billion in the five years the rail service was in public hands. Last year, the £2 billion sale of the 500 year old British postal service Royal Mail was criticised in many quarters as it emerged the company was undervalued by at least £200 million.

What do you think? Is the sale of the Eurostar stake a good or bad deal? Tell us your reactions by following via @SupplyChainD on Twitter.

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Jun 10, 2021

Will Public Procurement Budgets Increase in 2021?

supplychain
Procurement
budgets
strategies
3 min
Often overlooked, government procurement professionals will play a critical role in helping communities, and local businesses recover from the pandemic

Procurement is more than just a private enterprise. COVID-19 reminded us that sourcing materials is an essential part of the government’s role. Throughout 2022, tiny departments sourced massive amounts of personal protective equipment (PPE), medical supplies, and emergency vaccines and testing kits. Even non-procurement professionals were pulled into the fray, as frantic timelines demanded nothing less. 

According to Celeste Frye, co-founder and CEO of Public Works Partners, the crisis brought procurement to the attention of skilled employees who had never considered it. As non-procurement personnel stepped up to help their coworkers, many found that they’d stumbled upon a critical and rewarding job. “Existing public employees have seen the essential nature of the work”, Frye said. “[They’ve] gained some critical skills and possibly [grown] interested in pursuing procurement as a longer-term career”. 

Small, Local Suppliers Take Charge

Frye, whose firm helps organisations engage stakeholders and develop long-term procurement strategies, thinks it well worth the effort to open one’s mind to new opportunities. Cooperative contracts, for instance, can help public departments and municipalities save money, time, and effort. By joining together with other towns or cities in the region, public procurement teams aggregate their purchasing power and can drive better deals. 

These cooperative contracts have the added benefit of advancing equity. Smaller suppliers that struggle to compete with established firms for government contracts can act as subcontractors, helping big suppliers fulfil bits of the project. Once they get their foot in the door, small, local, and disadvantaged suppliers can then leverage that government relationship to take on additional projects. 

Especially as governments start to pay attention to procurement resilience, public procurement departments must expand their requests for proposals (RFPs) to take into account innovative solutions and diverse suppliers. According to Frye, Public Works Partners—a certified female-owned firm—has benefitted from local and state requirements that specify diversity. 

Post-Pandemic Funding Swells Procurement Budgets 

And the pandemic won’t be the end of it. City governments need to build sustainable energy infrastructure such as solar panels, charging stations, and recycling plants, ensure that masks and medicines are never in short supply, and source new technologies to keep up with cloud and cybersecurity concerns. 

Public procurement budgets will likely increase to match demand. As Peter Ware, Partner and Head of Government at Browne Jacobson, explained, “in a non-pandemic world, the [U.K.] government spends on average around £290 billion on outsourced services, goods, and works...anywhere between 10% and 14% of Gross Domestic Product (GDP). Post-pandemic, city procurement will only increase as national governments provide local divisions with emergency funding.
And in truth, government employees might jump at the opportunity. Frye noted that public procurement could give immediate feedback on new programmes: “[Procurement] is where new laws and policies ‘hit the road’ and are implemented”, she said. “Professionals in these fields get the satisfaction of creating real change and seeing quantifiable outcomes of their work”.

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