2.19 In October 1996, when the Agency decided to base the partnership on a joint venture company, they accepted that the scope of legal advice had to be increased to deal with issues arising from this new type of relationship between the public and private sectors. The principal increases were in the fields of commercial and company law concerned with establishing the joint venture company and setting out the relationship between the shareholders.
2.20 The Agency also found that establishing the joint venture company required additional professional advice from financial consultants, specifically in the fields of tax and public sector/private sector control of the joint venture company. In November 1996 the Agency estimated that the additional advice they would require would cost them £175,000, excluding VAT, but did not keep records detailed enough to show what they eventually paid.
2.21 The Agency set themselves a savings target in advance of their negotiations with CMG, but the absence of a competitor placed greater pressure on the negotiating team, which included at times up to nine external advisors, to secure prices that achieved the target savings. The negotiations cost the Agency approximately £1 million in fees for external advisors. This was approximately £200,000 more than that estimated by the Agency in August 1997, two months before the start of negotiations, and approximately twice their estimate when they restarted the project in July 1996.