Thursday, 21 January 2016

Council's multi-million pound gamble confirmed


A senior executive at New Earth Solutions, the company handed a £65 million contract by Scottish Borders Council (SBC) to develop the region's waste management service, has confirmed that the technology which would have been used in a new treatment facility at Galashiels had still not been proven on a commercial scale when the deal was abandoned last February.

The admission, contained within an interview with a waste management trade magazine, backs up earlier claims and allegations that councillors in the Borders took a massive gamble with taxpayers' money when they decided to "buy" the untested 'energy-from-waste' system in October 2012 while it was still under development by NES technicians.

Apart from a terse joint statement from the council and New Earth which merely confirmed the 24-year contract had been ditched after running into specific technological and funding issues there has been no public pronouncement from the Dorset-based NES about the Borders fiasco. They have subsequently referred requests for information back to SBC.

The company was asked in 2010/11 to build a conventional treatment plant at Easter Langlee, Galashiels to deal with municipal waste generated by the region's households. It was to be the sixth venture by NES which, at the time, was already operating several identical facilities.

But at the same time businesses within the NES Group were investing £60 million in a bid to perfect a technology capable of converting waste into heat and power at a massive centre in Avonmouth, near Bristol.

SBC has yet to explain publicly why it agreed to radically alter its contract with NES to immediately include a version of the fledgling energy-from-waste set-up at Easter Langlee despite the lack of any apparent guarantee of success.

When the Avonmouth scheme failed to produce satisfactory results and was draining the financial lifeblood from the Group, the decision was taken last summer by NES' funders Premier Group Isle of Man to sell off the energy sector to a bank. The plant had failed to perform satisfactorily ever since coming on-stream in 2013.

In a lengthy and detailed interview with the Chartered Institute of Waste Management (CIWM) Journal, Richard Brooke, NES commercial director, explained why the company's first Scottish project did not materialise.

Mr. Brooke said: "The energy recovery scheme at Avonmouth was fully built out and is now operational. However, New Earth has now divested the Avonmouth energy plant in order to focus on optimising and expanding its waste business, which is seeing a strong demand from the local authority sector...and its shareholders, funders and management team can now focus on the company's profitable waste business.

"The development in Scotland that would have been New Earth's sixth facility did not come to fruition for a variety of reasons, most notably the drop off in the quantity of residual waste requiring treatment; and the specific energy technology to be built and operated was not ready to bring on-line on a commercial scale."

In a telling footnote, Mr. Brooke added: "After the demands and pressures of establishing companies and operations in the energy sector over the last few years, we want to 'get back to the knitting' of delivering waste treatment services to our local authority and commercial clients and managing our waste facilities to a high standard."

It seems SBC readily agreed to vary their contract with NES to include risky energy recovery in the deal when in fact the council should have stuck to the basic principles of waste treatment, or in Mr Brooke's words 'stayed with the knitting'.

Had they done so the Easter Langlee MBT (Mechanical Biological Treatment) plant, scheduled originally for completion in 2012, would have been operational. It had the capacity to divert up to 80% of Borders rubbish from landfill, thereby bringing valuable environmental benefits while saving the council a small fortune in landfill tax.

Instead the unexplained, disastrous gamble cost a frightening £2.4 million (at least) with no return by the time SBC was finally forced to tear up their bookie's slip!

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