Welsh land sale faces inquiry

FRAUD-SQUAD officers are investigating a deal involving the sale of land owned by the Welsh Development Agency to Merthyr Tydfil Borough Council. The investigation got under way as the Welsh Secretary, Ron Davies, ordered the agency not to complete a contract, drawn up in February 1996, covering the sale of two sites on the western fringe of the town.

It throws doubt on plans to build a pounds 35m store, leisure centre and swimming pool, offering the prospect of 800 jobs. Having purchased the land, the council intended to sell it to developers Highstar Developments (Merthyr), which invited bids from supermarket companies, with Sainsbury being selected. The developers later told the authority the Sainsbury bid was not the highest, leaving the council the prospect of finding an extra pounds 1m towards the scheme. Alan Baynham, an independent member of the Labour-controlled authority, said yesterday: "The whole procedure was riddled with inaccuracies." Frustrated after failing to receive information from the authority, he took his fears to the district auditor. "I came across a firm that had made a higher bid than Sainsbury's."

Mr Davies said: "It is not in the public interest to complete the contract until the matter has been fully considered and resolved." His department would co-operate fully with the police and the district auditor.