French bid to build the new GCHQ

A FRENCH water company and a bank have joined up to vie with Group 4 security and BT for the contract to build and equip a new pounds 300m home for GCHQ, Britain's most important intelligence facility.

The Foreign Secretary, Robin Cook, will decide in the next few weeks which of the two shortlisted consortia should take over the two Cheltenham- based GCHQ sites, redevelop them, build a new headquarters and run it for 30 years.

Residents of the Cotswold spa town, concerned about the future use of the sites, have dubbed the two rival plans for the new buildings the "H block" and the "doughnut" on account of their shapes.

One consortium, GSL, would place security at the revamped GCHQ in the hands of Group 4, while giving BT responsibility for the communications and computer infra- structure supporting GCHQ as it eavesdrops on the world.

The other, The Oakley Partnership, was assembled by a British subsidiary of Vivendi, formerly known as Compagnie Generale des Eaux, a French water company, with finance provided by the French bank Societe Generale and technology support from Syntegra, a subsidiary of BT, although BT now says it has withdrawn.

GCHQ occupies two sites at Oakley and Benhall, four miles apart on opposite sides of Cheltenham. Bidding to take over and redevelop the headquarters began after the Government announced that it wanted to consolidate its work on one site and would welcome a partnership with the private sector. Under the terms of the Government's Private Finance Initiative, private capital and expertise are used to build government buildings.

GCHQ has been based in Cheltenham since 1952. Its premises consist of single-storey army huts and the odd nondescript office block. Sixteen applicants put forward proposals, and the final two represent consolidating at Benhall (GSL) or at Oakley. A third option, to build on a greenfield site within 10 miles, is a theoretical possibility, but an unpopular one.

Cheltenham residents have found it difficult to discover exactly what the Oakley Partnership is proposing. It has released limited information, complying with planning law but going no further. But the town has dubbed its proposed buildings "the H block" because of their floor plan. It intends to build four five-storey Terry Farrell-designed blocks between the existing buildings and the beginning of the Cotswold Area of Outstanding Natural Beauty. Then it will decant staff to the new building. Demolished, GCHQ Oakley will become a car park. The whole of Benhall will be sold, probably for housing.

The GSL consortium proposes to build a ring-shaped GCHQ ("the doughnut") within the Benhall site and then sell Oakley for housing and a supermarket. BT already provides GCHQ's telephone systems. Indeed, signals, eavesdropping and the national telephone company have been linked for years.

GSL has produced brochures, a model and a website, and run public and private meetings around Cheltenham. It also has the local newspaper firmly on its side. Oakley, on the other hand, seem to be appealing to an older tradition of secrecy, shared by both property and the secret services.

Ted Stevens, a local PR consultant, has led the GSL presentations, accompanied by consortium members. He knows that success in the Private Finance Initiative will depend on maximising receipts from the spare land as much as on successfully building, equipping and managing the building for the contract term of 30 years.

"It will be a decision based on the quality of the building and of the technology that you provide, but always partly based on cost. If you don't maximise the return you get on the sites left over, you are unlikely to get it," he said.

GCHQ concurs. "Under Treasury guidance we have to make this decision in terms of value for money," said a spokeswoman. The union, too, has got the picture. "I wouldn't say we were happy," said Caroline Cornell, the Public & Commercial Services Union representative at GCHQ, "but that's the way it is."

Since the end of the Cold War, GCHQ has been trying to find a role, or rather to justify its existing function. Recently it was reported that GCHQ had collected information from the mobile phone of the fugitive Kenneth Noye in Spain. GCHQ would neither confirm nor deny this, but it acknowledges that it now combats crime. Its latest project is Echelon, which allows it to intercept calls, e-mails and faxes by searching for key words.

GCHQ itself appears to be undergoing a period of openness. It has reinstated union recognition. It advertises jobs. It has a press office that answers questions.

But it will not comment on the consortium bids. "We are in an invidious position," said the GCHQ spokeswoman, explaining that she could not even comment on the details of the open planning applications that have been made in GCHQ's name.

Security implications of the redevelopment are already emerging. GCHQ has a security team examining those aspects of the move, along with teams considering everything else from transport to the canteen. In time-honoured fashion, they do not speak to one another while producing their reports.