by DOUGLAS SHEPHERD
Waste disposal contractors selected by Scottish Borders Council to deliver a £80 million contract over 24 years could not afford the capital for a modest insurance policy associated with the project, it has been revealed.
The shock disclosure - outlined in just thirteen words - has been made after the Council was told to release information previously classified as top secret following an unsuccessful attempt to block a Freedom of Information (FOI) request.
This newly published information seems certain to represent an acute embarrassment for councillors and leading officers associated with the ill-fated Easter Langlee waste management plans which were abandoned in February 2015 at a cost of more than £2 million to the public purse. At the end of the day the contractor was unable to fund the project and technical issues associated with it could not be overcome.
The information which SBC was keen to suppress dates back to March 2012, shortly after the multi-million pound deal with waste management "specialists" New Earth Solutions (NES), of Verwood, Dorset, was signed.
Before an operating certificate could be secured from the Scottish Environment Protection Agency for the "state of the art" waste management centre to serve the Borders, NES was supposed to provide an insurance guarantee of up to £315,000 to cover the cost of potential environmental incidents at the plant or to pay for the removal of waste in the event of NES crashing out of business.
So it was both unusual and puzzling when it came to light that in fact SBC - not their contractors - had to step in and provide SEPA with the necessary 'Letter of Undertaking'.
When a FOI request was submitted to the council earlier this year the requester was told a report covering the topic was confidential and would not be released due to 'commercial sensitivity'.
Rosemary Agnew, the Scottish Information Commissioner, was asked to intervene, and during the course of her inquiries SBC did release parts of the secret document, written originally by their Director of Environment & Infrastructure.
But they insisted part of a sentence would continue to remain "off limits", claiming its publication would be likely to cause substantial harm to the legitimate economic interests of NES. The Commissioner threw out SBC's arguments for withholding the material and gave the local authority until January 15 to comply with her decision.
Three weeks after Ms Agnew's decision notice was issued SBC released copies of the thirteen missing words from the secret document.
The relevant paragraph with the previously redacted words in capital letters reads as follows: "NES cannot obtain £315k of insurance without incurring costs that would have to be passed back directly to the council, NOR CAN THEY AFFORD TO HOLD THE CAPITAL ASIDE TO COVER THIS REQUIREMENT.
"As the council are ultimately responsible for the facility, the authority is being sought to issue a letter of comfort/guarantee to SEPA to cover this requirement, without the need for a fixed bond".
The undertaking was required to ensure the permit was obtained, and SEPA would
not issue a certificate without it.
The confidential report states: “The bond requirement is a recent
requirement by SEPA for private sector companies”.
If NES could not afford the insurance premium for a £315,000 guarantee in March 2012, how did SBC expect the company to finance even a fraction of the massive waste management project which was so vital to the environment of the Scottish Borders?
But despite this potentially explosive insight into NES's 'financial health' not a single councillor appears to have asked questions or demanded assurances that the firm could deliver the facility.
A former council insider commented: "The case for full disclosure is now more pressing than ever. It seems clear those responsible for this fiasco failed to ensure NES was even capable of paying an insurance premium. Alarm bells should have been ringing not long after the original contract was awarded. Yet SBC stuck with NES for three long and costly years before the balloon went up".