Sunday, 1 March 2015

Totting up the losses in the waste plant fiasco

Although Borders council leaders already admit they will have to write off £2 million as a result of the failure of the local authority's waste treatment contract with New Earth Solutions, there are already suggestions the financial implications could be far more extensive when other factors are taken into account.

There remain many unanswered questions after the plug was pulled last month on NES's planned £23 million investment at Easter Langlee after the scheme encountered insuperable technological and funding difficulties. It is the latest chapter in a long running story stretching back to 2002 when outline planning consent was first granted for an integrated materials recovery and composting facility at the site.

How much has the termination of the contract cost the company chosen by Scottish Borders Council to deliver the amended plans for an advanced thermal treatment ATT plant? NES must have ploughed considerable resources and many man hours into the process since landing the potentially plum job almost four years ago.

For example, planning applications in 2010 and again in 2013 were accompanied by fees of £14,000 and £10,800, although its not clear whether the company or the council as joint applicants covered those costs. In both cases the preparatory work by consultants, NES executives and local government staff must have accounted for a tidy sum. The firm seem unlikely to publish details of their losses, and would no doubt cite commercial confidentiality if they were asked.

The project's failure also means the Borders economy will miss out on jobs and the spending power of workers involved in the construction and operation of the ATT.

According to reports supporting the 2013 planning application 80 jobs would have been created for up to 18 months while the plant was being built. A back of the fag packet calculation suggests wages totalling some £2.5 million could have been paid out to the workforce over the period of the building contract.

The ATT was scheduled to employ up to 40 operational staff working in shifts 24-hours a day, seven days a week. Their salaries and wages could have totalled getting on for £1 million per annum.

The power plant was due to produce enough electricity to serve the equivalent of 2,500 homes, and up to 500 local houses "may be heated by the plant". This valuable resource, together with the associated benefits for the environment, has been forfeited, at least in the short term.

NES and the council claimed a significant proportion of the 25,000 tonnes of incoming waste from the Borders area would be diverted from landfill as a result of the revolutionary processes at Easter Langlee. It depends what is meant by significant.

But if say 50% of the total (12,500 tonnes) must now continue to be sent to landfill each year while the council 'goes back to the drawing board' to consider its options, then the charges accompanying this form of disposal will be considerable.

All in all the decision to abandon and tear up the contract between SBC and NES is certain to have noticeable knock-on effects in a number of quarters. Yet another reason why this controversial issue requires an independent investigation.

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