A report published today by the National Audit Office, the public finance watchdog, reveals the company that bought the building in October 1993 is no nearer deciding its future. In evidence to the NAO, Shirayama Shokusan says it could take 20 years or more to develop it.
The company views County Hall "as a very long-term investment" and has no "illusions or expectations in making any profit from this investment - even for more than two decades. The speed of the redevelopment will thus entirely depend upon matters outside the ordinary short-sighted business objectives".
No independent checks were made on the Osaka-based company's financial worth before it agreed to pay £60m. The NAO found it was allowed to defer payment of £10m after banks withdrew support. The seller, the London Residuary Body, a quango, told the Department of the Environment of the deferral but the Government chose not to release the information.
Allowing the Japanese to postpone £10m was in sharp contrast to the treatment meted out to the London School of Economics, which wanted to move there. Its £65m bid was rejected.
Shirayama first planned to create a 600-room hotel with Richard Branson, the boss of Virgin. That proposal was scrapped, to the fury of Mr Branson and the embarrassment of the Government, and replaced with an idea for a South-east Asia Trade Centre. That, too, has been ditched in favour of "a family leisure centre" including Europe's biggest aquarium, a hi-tech children's museum, a multi-media exhibition and a hotel. Even that is not definite. Inevidence to the NAO, Shirayama says no "firm concept/decision" will be reached until October. The company says it is still weighing the options.
As Shirayama was a privatecompany, no information about its financial standing that could be independently checked was available to the Residuary Body. Nor, the NAO says, "was such information obtainable from government sources".
In May 1993, the Japanese asked to reduce the price to £42m. The Residuary Body refused, but later said it was prepared to defer £10m. That deferred amount would start to be paid out of the profits of the hotel and other businesses on the site from 1997, or by 2012 at the latest. As the company has indicated it does not expect to make any profit for two decades, the Residuary Body will not get its money until 2012.
The Commons Public Accounts Committee will quiz officials about the sale early next month. Alan Milburn MP, a committee member, said: "It is outrageous that the disposal of a prime national site ... should have been subject to a secret agreement between an unaccountable quango and an overseas property company."Reuse content