Wednesday, 2 September 2015

Councillors ignored risk warnings from top officials


The chief executive of Scottish Borders Council has confirmed publicly that elected members were made aware of the risks associated with the energy recovery technology to be installed in the now abandoned waste treatment facility at Galashiels before they decided to gamble with millions of pounds of public money.

According to a report in this week's Border Telegraph Conservative member Gavin Logan sought clarification of what councillors were told when they signed up for a radical variation in their 24-year contract with New Earth Solutions Group.

The Telegraph report says that during a council debate last week, Mr Logan asked "Were councillors told the technology was untested and high risk?" He was assured by chief executive Tracey Logan that all elected members had been made aware of the risk.

If that was the case then why did the full council vote unanimously to take such a huge gamble on October 25th 2012 - a gamble which has already cost taxpayers over £2 million and will involve spending many millions more as the local authority pursues an alternative waste management strategy?

Those warnings that NEAT (New Earth Advanced Technology) represented a potentially dangerous path for the authority appear to contrast sharply with the recommendation to council that day from the director of Environment & Infrastructure and a team of other senior officers.

A very heavily redacted (censored) version of that document, obtained under Freedom of Information legislation, states under the heading RECOMMENDATIONS:

"I recommend that the Council [a] - (this recommendation is completely blacked out); [b] Agrees that the proposed changes to the project still represent value for money in the current market; [c] Agrees to issue a Contract Variation, within the parameters set out in this report, to New Earth Solutions to deliver the facility at Easter Langlee.

[d] Agrees to delegate powers to the Chief Executive, Director of Environment and Infrastructure, Chief Financial Officer and the Head of Legal and Democratic Services to vary the existing Contract within the parameters set out in this report; [e] Agrees to re-profile and increase the current Capital budget, as per the table overleaf, to cover the additional risk sharing proposal in (more black ink).

Far from pointing up risks and dangers, the report declares: "The proposed changes to the project still represent best value for the Council, to meet the legislative and financial drivers. The new integrated facility will actually deliver added benefits and reduced risk to the Council.

"Once funding is in place and the construction contracts have been signed the main contract does provide the Council with better protection from future changes in the financial viability of the project for New Earth Solutions. Therefore, this proposed Deed of Variation will provide New Earth Solutions with a fundable project that should provide the Council with an assured Waste Treatment Facility".

A ringing endorsement in anyone's language with no mention of untried and untested technology in any sections of the report which escaped the censor's liberal use of indelible black ink.

The upbeat enthusiasm for the contract variation to include NEAT at Easter Langlee soon proved to be completely misplaced. At that stage the only other facility of its type at Avonmouth, near Bristol, had yet to generate its first ampere or watt of electricity.

Within a short period of time the technology turned out to be a troublesome failure, and now the pilot plant is on the verge of being sold at a bargain basement price with heavy losses for shareholders and investors.

But as reported in these columns previously, a delegation from the Borders which toured the Bristol energy recovery facility last October returned convinced the technology would allow SBC to become a national leader in the field of waste management.

Just four months later (February 2015) the contract with NES was shredded and those dreams of civic glory were smashed to smithereens. The multi-million pound gamble with other people's cash had blown up in councillors' faces. But no-one accepts responsibility or is held to account.

This week's Telegraph reports that SBC chief finance officer David Robertson told last Thursday's council meeting: "After carrying out due diligence we concluded the technology for the advance treatment plant was untested and the firm had been unable to finance the project". No mention of the £2 million squandered.

The councillors may be keen to move on and put an end to the New Earth saga. But there are still numerous unanswered questions concerning one of the biggest financial disasters in the annals of Borders local government. The paying public demand and deserve answers.

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