It took the Nazis to sink it, time and tide to hide it and a record-breaking salvage operation to reclaim it, but one of the biggest threats to the Government’s attempts to profit from the SS Gairsoppa’s silver bullion appears to have been the Department for Transport's procurement process.
Despite salvaging a vast amount of treasure from the sunken ship, the DfT actually appears to have lost millions on the deal.
Having settled out of court for £16m on a claim against the department over procuring services to salvage the treasure, and having only recieved £6m from the salvage proceeds, the Government seems to have lost £10m on the deal.
Labour MP and former defence minister Kevan Jones told Transport Network: 'This salvage has been incompetently handled by the Government and ministers now need to urgently explain why they’ve allowed the loss of so much taxpayers’ money. I will be writing to Meg Hillier, chair of the Commons Public Accounts Committee, asking if the committee can use its powers to look further into the matter.'
Background
In February 17, 1941 the SS Gairsoppa was sunk in the Atlantic by a German U-Boat. All souls except one were lost and the British ship's cargo of 2,800 bars of silver bullion, which it was carrying from India to help with the war effort, sunk beneath the waves.
The silver finally resurfaced in the last few years after the 412ft ship was eventually found three miles down on the seabed and 300 miles off the Irish coast.
After several years, the rescue operation on behalf of the Treasury recovered around £38.27m of silver bullion. Odyssey Marine Exploration reportedly kept 80% of the silver bullion they recovered and the Treasury was given 20%.
In 2014 Royal Mint historian Dr Kevin Clancy told the Telegraph: ‘This shipment of silver bullion should have got here 72 years ago and now it has finally come home.
‘I don't think anything like this has happened before - bullion destined for us which didn't make now finding its way here. It's a very romantic and evocative story.’
And that should have been that. Of course, you should never ask what happened after ‘happy ever after’ but Kevan Jones MP recently did just that.
The DfT was asked what the total cost to the Government was of the execution of the contract, including all legal costs incurred, payments to third parties in settlement of legal challenges and the [alleged] underpayment of fees due by Odyssey Marine Exploration of the salvage contract for SS Gairsoppa.
In response transport minister John Hayes revealed to parliament: ‘One unsuccessful bidder made a claim against the Department concerning the procurement for the original contract. The Department entered into an out of court settlement for £16m including costs. The legal costs incurred by the Government in relation to this litigation total £167,929.70.
‘The question as to whether or not Odyssey Marine Exploration underpaid funds due to the Government under the contract, which was awarded in January 2010, is disputed by the parties, and would accordingly need to be the subject of legal proceedings in the United Kingdom and possibly also in the United States of America to resolve. The issue is being kept under review.’
Salvage proceeds are paid into is the Marine and Aviation (War Risk) Fund Account administered by the DfT. The department declined to comment on the exact level of profit or loss resulting from the debacle but confirmed to Transport Network that the amount it received was £6,154,266.
This suggests the taxpayer is around £10m down. And with legal wranglings still continuing, the story isn't over yet.
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