De La Rue chief questions viability of Gemalto pricing
Monday, March 26, 2018
Petitions calling for a government re-think on the UK passport contract have now reached more than 175,000 signatures, while De La Rue chief executive Martin Sutherland has questioned the viability of preferred bidder Gemalto’s pricing.
Unite the union’s petition had reached 17,558 signatories by this morning (26 March), the Daily Mail’s petition had amassed 130,505 expressions of support, while a third petition on the government’s e-petition site had clocked up 27,978 supporters.
It is likely that an urgent question will be granted in Parliament today, requiring Home Secretary Amber Rudd to explain the decision to MPs.
Incumbent supplier De La Rue was outbid by rival Gemalto, which is headquartered in France and listed on the Paris and Amsterdam stock exchanges. The company has five locations in the UK.
Gemalto is in the process of being acquired by French multinational Thales, in a deal that is expected to be completed in the second half of this year.
According to the Home Office, the savings to the tax payer will be between £100m-£120m, or the equivalent of £833,000-£1m a month over the length of the contract.
However, De La Rue chief executive Martin Sutherland questioned the viability of Gemalto’s pricing, which he described as “incredulously low”.
He said: “These are such tight margins, or even negative margins, that’s just not a viable business. It’s an incredulously low price.
“This bid is so low that you have to question whether it’s viable,” he said.
De La Rue’s Gateshead site employs more than 600 staff, of which around 200 are involved in the production of UK passports.
Sutherland said De La Rue would appeal the decision and was in the process of assessing its options.
Stephen Metcalfe MP, who is chair of the All-Party Parliamentary Print Group, told PrintWeek that the outcome of the tender process was “incredibly disappointing”.
“As chair of the APPPG I will be writing to the Home Office to ask for an explanation,” he said.
“I find it incredibly disappointing that the UK, with our long history and heritage as a leading print nation, has been unable to win this contract.”