Published on 13 Nov 2014 Sections ,

Big questions for Boris over billion dollar property deal

Political Correspondent

Exclusive: Boris Johnson is under fire over his handling of a £1bn deal for a Chinese firm to redevelop a huge site on London’s historic Royal Albert Dock.

This follows an investigation by Channel 4 News into the track record in China of the firm which won the contract – ABP – and into whether ABP were given favourable treatment during the tender process.

There are also questions over donations to the Conservative Party from an Anglo-Chinese businesswoman who acted as adviser to ABP.

Sir Alistair Graham, a former chairman of the government’s Committee on Standards in Public Life, suggested to Channel 4 News there should be an independent investigation into the tendering process for the development, which will take place on publicly-owned land.

“It has the smell of a semi-corrupt arrangement, doesn’t it?” he told Channel 4 News:

“If, in fact, somebody is going through a sham process to ensure that someone they want to be successful in the process, but it’s not a level playing field for UK companies, and there have been some financial transactions of an intimate nature then that smells to me of a semi corrupt arrangement.”

In May 2013 the Greater London Authority granted Advanced Business Park – known as ABP – the tender to develop the 35-acre site at the Royal Albert Dock, a derelict site opposite London’s City Airport. The development was hailed by Boris Johnson as “a beacon for investors”, and ABP hope that the site will become an important forum for scores of Chinese firms operating in Britain. The project will include 3.2 million square feet of office space, leisure facilities, and 845 residential flats. It is thought to be China’s largest property investment in the UK.

ABP’s human rights record

Our film raises serious concerns about ABP’s human rights record in China. We discovered that ABP, and their partners in Chinese local government, were involved in the forced removal of some residents from their homes at the site of their one completed development in Beijing. We have obtained amateur video footage, shot by a resident, of demolition teams tearing down a family’s home with all their possessions inside, on Christmas Day 2010. The family also say they were denied fair compensation for losing their home. We have substantial legal paperwork detailing their efforts to secure proper compensation in the Chinese courts.

Boris Johnson confirmed to me in an interview for Channel 4 News that neither he, nor the Greater London Authority (which Johnson runs), assessed ABP’s human rights record in China as part of the evaluation process.

Johnson also said ABP’s human rights record in China “wasn’t relevant to the tendering process.” But the Mayor promised to “look at” any new information.

Sir Alastair Graham disagrees: “Of course, in any bidding process one of the first things you look at is the track record of what they have done. Are they a safe pair of hands, or have they got a style of operation that would be totally inappropriate and alien in the UK?”

Enquiries by Channel 4 News also suggest ABP had what could be perceived as an unfairly cosy relationship with London and Partners, Boris Johnson’s taxpayer funded agency set up to attract foreign investment to London. In particular, London and Partners has been sharing an office with ABP in Beijing since March 2012.

London and Partners was involved in the marketing of the project, and was described as a “stakeholder” in the tender process. Channel 4 News has official documentation which show that they were asked to make an assessment of ABP’s claims that the company had lined up other Chinese companies that would take space in the new development – a critical aspect of ABP’s pitch.

What’s more, Tongbo Liu, the former head of London and Partners, who used to act as Boris Johnson’s personal representative in China, left the agency to work for ABP in March 2012, while the tender process was still going on. He has told us that ABP took over the lease of the office at the same time paying 70 per cent of the rent.

‘They are a subsidiary of the Mayor’

We have confirmation from London and Partners that ABP currently have the lease of the London and Partners office in Beijing and L&P pay 30 per cent of the rent. In a statement we were told that ABP moved into the office in Beijing in 2011, but that the two bodies had separate leases with the landlords until January 2013.

Nicky Gavron, Labour’s most senior member on the Greater London Assembly, told us: “The Mayor set up London and Partners, and London and Partners are his inward investment arm, and he funds two thirds of them. So they are a subsidiary of the Mayor. The Mayor appoints the Chairman. So you would expect the Mayor to have a grip on the practices of London and Partners.”

Gavron added: “If there are questions raised about London and Partners, I think then it raises concerns about the Mayor’s overseeing of the practices of London and Partners.”

She agreed that the buck stopped with Boris Johnson. “When you are executive Mayor and a one-man band, it does.”

The Mayor of London Boris Johnson told me in an interview this week that the tendering process was “fair and square” and the development was good for London: “This area you are talking about in the Docklands, has basically been derelict for about 50 years,” he said.

“The proposal to develop it and create a new business park seems to us to be very positive and I think it will be a very great thing for London. It will represent a significant investment in the city. It will drive jobs, drive employment, enable us to get homes built, because when you get jobs, you can get homes going.”

Xuelin Black, married to the Home office minister

The third area our film explores is the role played by Xuelin Black, an Anglo-Chinese businesswoman who is married to the Home office minister Lord (Michael) Bates. Black suggested the Royal Dock site to the boss of ABP, Xu Weiping, and even registered a company called ABP London China to help push the project forward, though the company was dissolved two years later, and she says she established it without the knowledge of Xu Weiping.

Between 2010 and 2012 Xuelin Black gave donations which total at least £162,000 to the Conservative Party. Since ABP won the contract these big donations have dried up. She insists the money was hers, and didn’t come from ABP or Xu Weiping, and she says she has continued to give money to the Tories. But her donations are now about £5,000 a year, not enough to appear on the Electoral Commission’s public register of party donations.

Our revelations about the Royal Albert Dock development are unlikely to prove fatal to Boris Johnson, but they may add to his reputation for cutting corners. The post of Mayor of London was established to overcome bureaucratic hurdles and push through major projects like this.

But in his rush to bring big foreign investment to London at a time of recession, should Johnson have done more to examine ABP’s background, and did the cosiness of his people with ABP mean that the whole process was not a level playing field, and therefore unfair to the dozen other bidders for the development, most of whom were British.