THE organisation responsible for managing and maintaining Wales’ environment may have breached state aid rules by awarding a £39 million contract without going out to tender, a report has found.

Earlier this year a report by the Wales Audit Office found Natural Resources Wales (NRW) had awarded a 10-year contract to sell timber to a sawmill to a firm in 2014 without allowing other companies to bid.

Although NRW disputed the findings, a further report by the Welsh Assembly’s Public Accounts Committee found the organisation only sought advice on state aid rules after the issue was raised by the Wales Audit Office.

The committee, which is chaired by Monmouth AM Nick Ramsay, has demanded NRW carry out a full review of how it awards contracts.

The Conservative AM said: “There are serious concerns that NRW’s decision-making and contracting processes are unsatisfactory.

“This leads us to conclude that a serious error of judgement was applied in awarding a substantial contract to an individual sawmill operator without a full and open retendering exercise or robust market testing.

“NRW should undertake a full evaluation of the governance arrangements surrounding contracting processes and review its delegation arrangements alongside its awareness raising of state aid law, public law and the processes for awarding contracts.”

Responding, an NRW spokesman said: “We have already put in place an action plan to address the issues raised by the Auditor General for Wales and we will ensure that this also covers the recommendations made by the Committee which we accept in full.

“We accept that there are matters that need to be addressed but there has been no complacency by NRW in responding to the issues raised by the Auditor General, we were dealing with a very serious situation with larch disease at the time, and needed to act quickly.

“Our recent Timber Marketing Plan has significantly changed the way we operate, and we have incorporated the lessons learned from the previous contracts."