- Indictment: Power and Politics In the Construction Industry by David Morrell
Faber, 287 pp, £14.95, November 1987, ISBN 0 571 14985 5
The power stations and dams of the world are among the legacies of our time likely to remain for future generations of archaeologists, who will probably find the Pyramids less enigmatic than the enclosed concrete mausolea at places like Sellafield. Brunel’s statue adorns Paddington, but where and how would anyone commemorate the builders of Chernobyl? For the Kariba North Bank power station, however, there is now a memorial-David Morrell’s Indictment. Mr Morrell is the chairman of Mitchell Construction, the original contractors for the KNB project, and his book breaks ground unturned since Samuel Smiles’s Lives of the Engineers. In his pages, Mitchell Construction, in legal fiction a corporate ‘person’, comes to life like a character in a novel, persecuted and buffeted by mysteriously malign forces.
Indictment has a potential libel suit in almost every chapter, and in the context of current government paranoia there is an outside possibility of prosecution under the Official Secrets Act. It is Morrell’s own experience which has led him to conclude, despite his Tory background, that ‘the laws which rightly exist to protect the virtuous from defamation have become a shield behind which any amount of iniquity can be perpetrated without fear.’ He has documented his case so well that one can only presume that potential litigants are worried about the possibility of an ‘Oscar Wilde Scenario’ – i.e. that they would surface from a libel suit even less fragrant than they were when they went in. Either Morrell is a fiction writer of rare but paranoid talents, or he and his company were, as he says, the victims of a plot which included leading elements of Government, Industry and Finance, here and abroad, as well as many of our respected professionals, who seem to have valued prosperity over ease of mind. The book is as gripping as a thriller, but all the more frightening for its substantiated reality.
The Kariba Hydroelectric project, presented as a major contribution by the West to the industrialisation of Zambia, was in fact designed to supply huge amounts of cheap electricity to the blockaded Rhodesian regime. ‘The foreign exchange component was being provided by the World Bank, guaranteed by Her Majesty’s Government for what was quite simply the product of sanctions-breaking on a massive scale.’ Somehow, elements in the British Government and the World Bank worked together to sell the deal to the Zambians – and sold it so well that the Zambians helped to pay for the project. They even appointed a Rhodesian, Salisbury-based company, CAPCO, as agent for construction. In addition, the Zambians were supposed to wait 35 years for the first pay-off from their investment, while in the meantime providing Ian Smith’s Rhodesia with two-thirds of its power supplies. Indeed, it was only after acrimonious argument that the Zambians prevented CAPCO fixing the water intakes nine feet higher on their side of the Zambezi than on the Rhodesian side, which would have made the Zambians the first sufferers at a time of low water.
Morrell’s account has it that the instrument of Mitchell’s destruction was a stick of rock. The consulting engineers, Gibbs, warranted that their rock cores showed granite. They did no such thing, however, as Mitchell’s men discovered when the roof of the underground hall they were excavating began to fall on them. Gibbs refused to accept the evidence. Angus Paton, their chief consultant, later knighted, explained after one engineer was crushed to death that ‘we expect men to be killed on hydro-electric work.’ Gibbs dealt with a reported four-ton rock fall by claiming that it was a mere one ton that had fallen into the working area. ‘Mitchell’s probably had more tunnelling experience than any other contractor in the world,’ Morrell notes. ‘We had never before lost a man in a rock fall.’ Cripplingly for Mitchell’s, Gibbs refused to authorise payment for the extra work entailed by soft rock in the roof of the machine hall. Only later did it emerge that they could not authorise anything more than petty cash without the permission of their Rhodesian masters, CAPCO. Besides, they could not admit that the rock was soft because that would have been to admit their part in the erroneous geological report which warranted granite. They also knew that the Zambian company which had been lumbered with official responsibility simply did not have enough money to pay for the extra work. Meanwhile the Zambians realised the extent to which they had been conned, and, not unreasonably, lumped CAPCO, Gibbs and Mitchell’s together as a cabal of Westerners trying to take them for a ride.
The rock landed firmly on Mitchell’s desk. They were the ones who had pumped men, materials, expertise and cash into Kariba. Morrell and his fellow directors did what appeared to be the honourable thing and called in the receiver. The receiver then spent several years not pursuing Mitchell’s claims over Kariba, while dismembering the company and disposing of its parts at far less than cost. Only last year was the company returned to its directors, and given the opportunity to pursue legal remedies and thus to vindicate itself – only to find that it is now denied access to the details of the disadvantageous settlement which was made on its behalf while in receivership.
The story begins unassumingly with something of the flavour of a company history. At first, it is difficult not to feel patronising when Morrell speaks proudly of his membership of the Midland Section of the Federation of Civil Engineering Contractors, and of their dinners: but it becomes clear that these meals had more than a little of the flavour of breakfast with the Borgias. The Federation was run by a self-appointing oligarchy of the large firms using a voting system reminiscent of the Teamsters. David Morrell became one of the awkward squad with his Quixotic notion that construction companies should put in real tenders, related to what the jobs would eventually cost.
‘Crusading,’ he realised, ‘was an unprofitable pastime,’ and he came up fair and square against the nudge-and-wink brigade, who thought that the purpose of inviting tenders was to lend a veneer of competition to the process by which they would themselves always get the contract: ‘it frequently appeared that bids were only being used to provide a semblance of respectability and to form a basis for arrangements with an already selected tenderer.’
In 1970, for example, Mitchell’s put in a tender for a steel works. It was the lowest by over a million pounds, but the contract was awarded to McAlpines after their bid had been ‘adjusted’ – ‘adjusted’ in such a way as to render it effectively meaningless, since the final result was a convoluted form of words for a cost-plus contract. ‘The award of the contract on this basis,’ Construction News declared, ‘is a simple licence to print money.’ The eventual cost of the project, Morrell discovered, was nearly twice what Mitchell’s tender had proposed.
These were the happy days of massive public works, when Labour ministers dined and ennobled the businessmen into whose pockets they poured tax money. Payments to smaller contractors, by contrast, were delayed to ease departmental cashflows. The larger contractors, led by McAlpine’s, were happy with this form of artificial selection, which kept the industrial dinosaurs well fed, white starving smaller potential rivals. The dinosaurs opposed attempts by people like Morrell to get the Federation to raise the matter with the Government, and deeply resented his arguments against the cost-plus system of ‘negotiated’ contract. He himself resisted implied invitations to join the club around the honey-pot, believing that the country’s economy needed competition, not monopolistic arrangements. Stockbrokers’ reports make his point for him: McAlpines, while boasting the industry’s highest profit margin on turnover, was 28th in the list on turnover per employee.
What the larger firms lacked in industrial efficiency was more than compensated for by political dexterity. The Dorchester Hotel, then owned by McAlpines, was the place where Sir Edwin McAlpine, ‘indulging his fascination with the manipulation of people and situations’, sat spinning ‘his extraordinary web’ as prime ministers, politicians and heads of nationalised industries came and went. One of the consequences of the Morrisonian model of the mixed economy is, or was, the immense powers of patronage placed in the hands of ministers and civil servants. Sometimes it is clear that outright corruption ruled on major contracts, but of course other forms of influence are more subtle and less traceable than those revealed by the activities of provincial architects like Poulson. As Morrell concludes, ‘for those who would seek a modicum of justice, the world is depressingly small at the top.’ No one needed to run an overt blacklist. A poisoned word at the dinner table could establish a company as broke, or cursed with a strike-happy work-force, or technically incompetent, and of course the joy of rumour as a weapon is that it is almost impossible to refute without giving the story further currency. Not surprisingly, Mitchell’s soon acquired just such a poisoned reputation in the oral culture of that part of our ruling caste which dealt with construction and contracting.
Morrell is convinced that privatisation ‘will progressively relieve the worst excesses’. But while Mitchell Construction suffered most obviously from the indifference of government, it was the malign influence of private industrialists which really sank it. It was, for example, the head of Thomson Newspapers who, he alleges, reprimanded the editor of the trade newspaper, who had had the temerity to ventilate Morrell’s views on competition. Nor is waste a government prerogative. Morrell himself cites an outstanding example from the heart of British finance capital: the cost of the Lloyd’s Building has risen from its original contract price of £76 million to over £191 million on latest estimates.
These glimpses of how our money is spent set the scene for the events surrounding the Kariba project, and explain how it was that a corporate but incorporeal entity came to be murdered. They also explain why the deed was not followed with a hue and cry, but with a financial anatomising of the victim by a series of named parties whose interests seem to have been closely tied in with those of the many enemies made during Morrell’s crusading career. The construction industry’s rumour mills still brand him as an obsessive. The acid test is that he remains unsued for indictment, which implies a solid and reasonable cause for obsession.