Thursday, 16 July 2015

Did construction work really start on Borders waste plant?


At least another £1.1 million appears to have been lost on the disastrous Easter Langlee waste treatment project involving Scottish Borders Council and the New Earth Solutions Group, according to the latest revelations to emerge from the wreckage of the fiasco.

The local authority has casually written off at least £2 million of taxpayers' cash amid claims it did nothing wrong after terminating its £65 million contract with NES after the company could not deliver the waste treatment plant because of funding and technological issues.

But it appears from the audited accounts of the company set up specially to carry out the multi-million pound contract for SBC that a substantial amount of building work was under way at Easter Langlee at some point between the signing of the original contract in 2011 and the end of January 2014.

New Earth Solutions (Scottish Borders) Ltd was launched with just two £1 shares in 2011 to act as a so-called SPV (Special Purpose Vehicle) to steer the waste treatment project through the various development phases from a proposed start in January 2012 to completion twelve months later.

There may be no evidence whatsoever of any building work ever having taken place at the Galashiels site. But included in NES (Scottish Borders) latest published financial records is a puzzling entry which states: "Construction work in progress at 31/1/2014 £1,136,771".

Most of the money seems to have been sourced from shareholder loans (£1,136,360), and the accounts confidently state: "The business plan projections up to January 2016 demonstrate the company can trade within its facilities with the support of its major shareholder, New Earth Recycling & Renewables (Infrastructure) PLC."

But as Not Just Sheep & Rugby reported only last week the New Earth Recycling & Renewables (NERR) Fund has been suspended for many months and investors from around the world are trying desperately to extricate their cash, so far without success.

New Earth Solutions was asked: "What does this substantial sum of money refer to? Is it the amount owed to contractors?"

But Matthew Webb, from NES Group replied: "We are unable to respond to your questions. Please direct all questions to Scottish Borders Council".

It is difficult to comprehend how a public body could be expected to explain the presence of £1.136 million on the books of a private company. So it seems NES, like Scottish Borders Council, is not prepared to provide the paying public with an explanation for their expensive actions.

Meanwhile, back in the real world, there are further hints that failure to build the much needed plant could result in tens of thousands of tonnes of Borders rubbish having to be transported out of the region for treatment and disposal.

The topic of waste management has cropped up during the Scottish Government's consideration of the Scottish Borders Local Development Plan (LDP). Planning officials representing the Scottish Ministers have asked SBC to comment on the implications of the existence of a significant shortfall in waste management facilities, the emphasis being placed "on need over proximity", and the achievement of a sustainable strategy possibly involving waste crossing planning boundaries.

In a response published on the Government's planning website, the council's Barry Fotheringham says SBC recognises the shortfall in waste management facilities by identifying Easter Langlee landfill site as being strategically important to the Scottish Borders, safeguarding the site for waste management purposes.

Mr Fotheringham goes on to tell Scottish Ministers: "Easter Langlee landfill site currently benefits from detailed planning permission for the erection of an advanced thermal treatment plant which would process municipal waste producing residual electricity and heat.

"This would allow for Scottish Borders waste and secondary resources to be managed in the most appropriate centrally located installation by means of the most appropriate methods and technologies."

Unfortunately, there is a slight drawback, which Mr Fotheringham goes on to explain. He states: "However, it is worth noting that the contract between Scottish Borders Council and the thermal treatment plant provider has recently been terminated.

"This will require the council's Integrated Waste Management Strategy (IWMS) to be reviewed in the short, medium and long term. It also has implications for cross boundary transfer of waste materials to other local authorities for treatment which will be considered as part of the IWMS review."

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