Saturday, 15 August 2015

Easter Langlee revelations as losses continue to grow


The "pioneering" technology company which was supposed to provide the Scottish Borders with a state-of-the-art waste treatment plant at Easter Langlee believed a string of planned incinerators in the UK would generate in excess of £900 million of revenue in five years following a £150 million capital expenditure programme.

But while NEAT Technology Group was outlining these highly ambitious and undeliverable claims, the company was, at the same time, failing to convince Scotland's environmental watchdog that its 'revolutionary' pyrolisis and gasification processes were fit for purpose.

It has now been revealed that NEAT Technology - the business has since changed its name to Syngas Products Group Ltd - spent £20,300 in an unsuccessful bid to persuade the Scottish Environment Protection Agency (SEPA) to vary an operating certificate for the Galashiels plant to allow the controversial energy recovery facility to be developed.

The application to SEPA was lodged in May 2013 by New Earth Solutions (Scottish Borders) Ltd, a £1 company set up by Scottish Borders Council's contractors to build the multi-million pound plant. But SEPA remained unconvinced the "cutting edge"technology was safe and suitable. The certificate had still not been issued when the application was withdrawn in February 2015 and SBC abandoned the deal having spent millions of pounds of public money on the failed venture.

During the 21 months of negotiations SEPA served three separate further information notices on the company and remained dissatisfied by limited emission data while also expressing concern over the potential noise impact of the whole Easter Langlee installation given its close proximity to housing.

Last month it was revealed the prototype plant at Avonmouth, near Bristol was performing so poorly that New Earth is in talks to sell it off to an Australian bank and an unnamed institution. The Group's controllers warned: "Given the continuing poor performance of Avonmouth ERF and the need for further significant capital expenditure, which still carries significant risk as to its ultimate success, the terms of any sale are unfortunately likely to be unfavourable for shareholders."

Further research by Not Just Sheep & Rugby shows that while the Galashiels project was still 'live' and after a delegation of Borders councillors and senior offices toured the Avonmouth plant in October 2014, NEAT Technology produced a glowing account of the future potential of their unproven energy recovery techniques.

The directors' report for the period June 2013 to June 2014 (lodged at Companies House in December 2014) proudly declared "[The company] is at the forefront of advanced thermal waste-to-energy technology delivering advanced thermal treatment of residual household and commercial waste. NEAT uses proven and patent protected technology developed for the recovery of renewable energy from waste."

Yet only two months after that report was written the Borders project was dead in the water. It again poses questions over the standard of the 'due diligence' carried out by SBC before, during and after the Avonmouth trip at taxpayers' expense.

But NEAT's claims did not stop there. The report explained the Avonmouth plant would yield significant cost reductions in 2014/15 and in future years, and provide NEAT with a strong royalty income stream.

Following Avonmouth's completion NES was planning to roll out renewable energy recovery to all of its existing and proposed waste treatment sites using NEAT technology. A second incinerator would be built at Avonmouth together with similar facilities at Canford (Dorset) and at Galashiels.

According to the extremely upbeat report: "In total, NES Group's current waste treatment facilities have the potential to supply 40 megawatts of renewable energy. This will require substantial capital expenditure of £150 million with the potential to generate a renewable energy business with revenues in excess of £900 million over the next five years."

It seems those involved in the Borders waste treatment project, including "experts" who cost the council hundreds of thousands of pounds in consultancy fees were firmly convinced by NEAT's own publicity. Perhaps SBC should try to recover the taxpayers' money squandered on engaging so-called environmental, technical and legal wizards to serve on their project team.

It is unclear whether SBC bothered to read NEAT Technology's 2013/14 accounts which accompanied the predictions of such a rosy future. If they had taken the trouble to scrutinise the books they might have noticed that the company had recorded a whopping £7.986 million loss on the year.

But that did not prevent NEAT from shelling out "directors' emoluments" of £1.354 million to the five members of the board. The highest paid director received £231,000 but the Group loss after tax stood at £13.907 million with a shareholders' deficit of £13.897 million recorded.

Syngas Products does not appear to have modified its claims for the incineration methods that have resulted in huge problems for NES at Avonmouth. Today the "new" company's website tells potential customers and investors: "Syngas Products (formerly NEAT Technology) is at the forefront of advanced thermal waste-to-energy technology delivery".

Now where have we heard that before? It's to be hoped potential buyers of the risky technology are less gullible than SBC.

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