Wednesday, 27 April 2016

Lamont's landslide victory leaves SNP trailing


The two-horse race in Ettrick, Roxburgh & Berwickshire has taken on a different perspective after Tory candidate John Lamont trounced his SNP opponent Paul Wheelhouse in two separate counts.

The first calculation, which covers the last five years, shows Lamont made 2,367 separate claims for expenses as the constituency's MSP against only 870 by Wheelhouse who served as a list MSP covering the vast South of Scotland territory which stretches from Eyemouth in the east to Stranraer in the west.

Lamont's second stunning victory came when the value of the two politicians' claims were assessed by enumerators for monetary value. The result? Lamont (Con.) £152,838; Wheelhouse (SNP) £77,760.

Detailed analysis carried out by an irate taxpayer shows Lamont outscored Wheelhouse in terms of claims in each financial year from 2011/12 to 2015/16, and at the same time must have kept a couple of Holyrood bean counters fully occupied in scrutinising, approving, then signing off his allowances.

Lamont also thrashed Wheelhouse in the money stakes in each of the five years covered by our research, defeating the SNP hopeful by more than £2 to £1.

An economics expert said: "If it's value for money you're after at the forthcoming election, then it's no contest.

"I thought there might be something unique about Ettrick Roxburgh & Berwickshire in terms of the financial resources required to maintain the local MSP. So I looked at the claims of the serving SNP member in the neighbouring seat of Midlothian South, Tweeddale & Lauderdale [Christine Grahame], an electoral division with similar characteristics to Mr Lamont's constituency.

"But she only submitted 1,076 claims over the five years with a total value of £86,031. It's virtually a case of Buy One Get One Free (BOGOF) with the SNP compared to the cost of 'running' a Tory MSP".

A previous article published on this site concentrated on the respective allowances claims of the candidates during the first nine months of 2015/16 when Lamont defeated Wheelhouse by 369 invoices to 107, claiming £23,234 against £8,674. So our angry taxpayer thought it might be worth looking at some of the individual claims in greater detail.

Perhaps the one that stands out is the form he must have filled in to claim £1 (yes, one pound folks) to recover the cash he splashed out on a single copy of The Berwickshire News on April 27th last year.

That particular claim was accompanied by two others valued at £2 each for four copies of the Eskdale & Liddesdale Advertiser and four copies of the Selkirk Advertiser. Obviously a dedicated supporter of the local Press is Mr. Lamont [at taxpayers’ expense, of course]! A £2.94 taxi ride from Parliament to St. Andrew’s Square features in another of the claims listed.

Full details of all allowances claimed by our Parliamentarians are available on the legislature’s website. Good hunting!

In the meantime here's that Ettrick, Roxburgh & Berwickshire result in full  J.L. = John Lamont; P.W.= Paul Wheelhouse.

YEAR       J.L CLAIMS     J.L. CASH       P.W. CLAIMS     P.W. CASH

2011/12         230                   £28,688                84                        £11,431

2012/13         372                   £30,385               211                       £22,384

2013/14         716                   £33,676               269                       £18,368

2014/15         680                   £36,855               199                       £16,903

2015/16         369                   £23,234               107                        £8,674

TOTALS:    2,367                £152,838               870                       £77,760

CON.MAJ  1,497  and         £74,078

Funding issues? You bet there were!


The detailed proposals on how a £21 million Scottish Borders Council waste treatment facility was to be funded by contractors New Earth Solutions [NES] have been revealed in another leaked document which has been handed to Not Just Sheep & Rugby.

It appears the availability of cash for the originally agreed disastrous project hinged on the successful refinancing of the NES plant at Avonmouth near Bristol with the anticipated proceeds of £15 million from that exercise being returned to the council's approved funders, New Earth Recycling & Renewables (Infrastructure) Plc [NERR].

As we revealed only last week, NERR is the offshore fund 50% owned by a business registered at the Mossack Fonseca branch office in British Virgin Islands, the law firm directly linked to the "Panama Papers" tax dodging controversy.

The latest 'strictly private & confidential' report on a saga which has cost SBC taxpayers at least £2.5 million, is important as it dates from around the time when the original £65 million contract between SBC and NES was signed.. The document, drawn up by NES is headed Scottish Borders project - Update on New Earth's funding solution.

Unfortunately the money to pay for the combined conventional and thermal waste treatment centre planned for Easter Langlee, Galashiels, was still not in place four years after the report was drafted. The entire deal between council and contractor was abandoned in February 2015 because of insurmountable funding and technological problems.

According to the document: "Our funding solution remains to source 97.5% of the project capital expenditure requirement from our funding partner, NERR, and for New Earth to provide the remaining 2.5%. NERR remains committed to investing into the project, having executed various legal documents with New Earth coterminous with the contract award that demonstrates its commitment including the shareholders agreement."

The council is assured NERR's assets are healthy with a graph showing how the fund had grown from humble beginnings to a total of £71 million by June 2011.

"The funding requirement for the Scottish Borders project will be in the region of £21.5 million, with the first phase MBT [Mechanical Biological Treatment] facility costing in the region of £14 million", the document reveals.

NES's Avonmouth plant which impressed a SBC delegation during a site visit in October 2014 had also been 97.5% funded by the tax haven-based NERR fund, says the report.

New Earth had subsequently received six separate offers in respect of the Avonmouth refinancing, and terms had been agreed with the company's existing senior debt provider. The letter adds: "The proceeds of this £15 million refinancing, net of transaction costs, will be returned to NERR for subsequent re-investment into the Scottish Borders project.

"We believe that the positive response by banks to the Avonmouth refinancing opportunity vindicates our approach to using the NERR funding to 97.5% finance the construction and commission period and enables us to achieve better value senior debt terms post-commissioning. We fully expect to be able to successfully replicate this funding approach on the Scottish Borders project".

This revelation raises important questions. Why did this funding arrangement fail, and what action did the council and the contractor take to identify an alternative source to finance the vital environmental project? When did NES first indicate that NERR was incapable of delivering the £21.5 million? How many briefings were given to councilors as the project continued to descend into meltdown, and why did they allow the money-sapping delays to continue for almost four years?

But there is even more in the leaked document to give rise for concern.

It states: "Furthermore as part of the Avonmouth refinancing process we have received very strong interest from banks to provide long-term senior debt funding towards the construction, commissioning and operational periods of the Scottish Borders project.

"Through the £15 million Avonmouth refinancing and NERR subscriptions between June and September (£2.9 million per month) it is therefore envisaged that during quarter three of 2011 New Earth will complete its £21.5 million fundraising for the Scottish Borders project".

It is essential in light of this latest disturbing disclosure that SBC publishes the full secret account of the project's downfall. Taxpayers deserve nothing less. Were any of the banks asked to intervene and replace NERR as the funder?

There is even a fallback position outlined in the document. It explains: "Should closing the Avonmouth refinancing take longer than anticipated then the £14 million MBT element of the Scottish Borders project could still be funded from a combination of NERR subscriptions over the next few months and senior debt. Project construction is programmed to commence in autumn 2011.

"New Earth is hoping to close projects with a total capital expenditure in the region of £95 million during 2011 and into 2012 with Scottish Borders representing both the first and highest priority."

In those circumstances how could anything go wrong?

Wednesday, 20 April 2016

Unbelievable revelations in £2.4 million waste treatment tragedy

DOUG COLLIE reports on the latest FOI disclosures

The 'proving plant' for untried waste management technology which was to be used in a "cutting edge" treatment plant to serve the Scottish Borders had not even been installed at a research and development centre in Dorset in October 2014, more than two years after councillors decided the system was right for Galashiels.

This, and a number of other disturbing disclosures contained in documentation released under Freedom of Information, seems likely to generate more questions for Scottish Borders Council and waste "specialists" New Earth Solutions [NES] whose ill-fated contract had to be abandoned last year because of insurmountable funding and technological issues at a cost of at least £2.4 million..

The three confidential - and still heavily censored - pieces of paperwork are all linked to the weeks preceding the visit in 2014 by a large SBC delegation to the NES plants near Bristol, although the council maintains no reports were written after the party of elected members and officers returned home.

A detailed background paper running to 34 pages and dated October 3rd 2014 - the day of the visit - shows a nine-month moratorium on the 24-year contract was agreed in February 2014 and which was scheduled to run until the end of October 2014. This important step was never made public, and all debate and decisions relating to the moratorium were conducted in private.

The moratorium was designed "primarily to provide additional time to develop...(the rest of the sentence has been redacted), provide time to identify funding for the project, and to allow an extra period to secure the necessary certificate for the Easter Langlee plant from the Scottish Environment Protection Agency [SEPA].

However, when the original contract was signed, funders had been identified for the £21 million waste plant. They are named in council documents as New Earth Recycling & Renewables (Infrastructure) PLC [NERR], managed by Premier Group (Isle of Man).

And as Not Just Sheep & Rugby exclusively revealed this week NERR is 50% owned by Premier Group Distribution Inc., a business with its registered offices at a property in British Virgin Islands occupied by law firm Mossack Fonseca of "Panama Papers" fame.

By the time the briefing notes were written the Easter Langlee project was already years behind schedule and SBC was in danger of being unable to meet Government imposed landfill diversion targets. But NES appeared to be offering a temporary alternative solution to rubbish disposal in the Borders.

One of the documents states: "Prior to commencement of treatment operations at Easter Langlee there is an option for the interim treatment of some of SBC's 'black bag' residual waste by third parties sub-contracted to NES. New Earth can arrange the bulk haulage from SBC's transfer stations. No additional cost to SBC, recycling and landfill diversion benefits for SBC".

NES goes on to tell the council: "Scottish Borders is an important project for New Earth and we are committed to delivering it. We have a route map to deliver the Easter Langlee facility by....(rest of sentence redacted). The paying public apparently have no right to know the date NES had in mind for completion of the plant.

A great deal of confusion seems to exist when the various waste management strategies for the Borders are placed side by side.

The 2014 version, according to the "commercially sensitive" papers, offers a solution which "means that the council does not have to transport all of its waste out of the region to be treated to meet legislative requirements, as this does not represent value for money in the long term".

But this environmentally unfriendly way of overcoming decades of dither and needless expenditure had become 'flavour of the month' by the summer of 2015 when the latest efforts to come up with a practical strategy was launched. If approved, hundreds of lorry movements per month will be required to take Borders rubbish elsewhere for treatment.

A previously unseen briefing note from NES for councillors dated September 2nd 2014 gives the impression the troubled contract remained intact when in fact it was falling apart at the seams and should have been torn up months earlier.

The Bristol delegation is told: "On October 31st NES will provide a new funding strategy and an energy from waste technology development strategy". So neither were in place three and a half years after elected members penned the original deal with NES, but they were content to allow the never ending saga to drag on..

And the note continues: "The council then has until January 31st 2015 to consider the proposals. The parties then have until March 31st 2015 to agree a new Deed of Variation to the existing contract".

A section headed THE TECHNOLOGY, which has been liberally redacted, says the so-called 'proving plant' for the Easter Langlee plant would be installed on land adjacent to New Earth's waste treatment facility at Canford, Dorset.

"Operational experience with the fully integrated 'proving plant' is key to delivering New Earth's first commercial scale...(redaction) at Easter Langlee". In other words the form of technology chosen by Borders council members when they first amended the contract in October 2012 had still not been road tested 24 months later.

A further passage in the document entitled THE TECHNOLOGY DEVELOPMENT could have proved informative had the censor not daubed much of it with thick black ink. It states: "The outline timetable for the development of the Canford 'proving plant' and subsequently Easter Langlee is as follows".

A series of dates - March 2015, October 2015, January 2016, February 2016 and August 2017 is visible. But the 'events' linked to each date have been obliterated thereby rendering the material worthless from a council taxpayer's point of view.

It seems the cover-up is set to continue.

Tuesday, 19 April 2016

No expense spared by Borders Tory MSP!


Featuring a story you're unlikely to read in tomorrow's Scottish Daily Mail


John Lamont, the Tory hopeful in Ettrick, Roxburgh & Berwickshire constituency claimed more in members' expenses than Nicola Sturgeon, Ruth Davidson and Kezia Dugdale put together during the first nine months of the 2015/16 financial year.

A trawl through the Scottish Parliament's financial records shows most of the Conservatives elected in 2011 - many of them as list rather than constituency MSPs - are among the highest claimers of expenses across the political spectrum.

Whether they represent value for money is entirely a separate issue for debate.

The statistics covering the period April 1st to December 31st 2015 show Mr. Lamont handed in 369 separate claims (that's more than one per day) totalling £23,234.11. These included £10,427 for office costs and £5,900 for travel expenses.

A random sample of 33 members who served mainland seats and are representative of all political parties at Holyrood failed to produce a higher figure than Mr. Lamont's. And it was usually his Tory colleagues who featured near the top of the expenses league.

Two other members of the Conservative group, Alex Fergusson (Galloway & West Dumfries) and John Scott (Ayr) claimed £19,519 and £18,485 respectively.

Turning to the list MPs, the Tories again appear to have raked in more than most with Murdo Fraser (Mid Scotland & Fife) on £18,756; Jackson Carlaw (West Scotland) at £14,386; Alex Johnstone (North-east Scotland) £17,143 and Mary Scanlan (Highlands & Islands) £16,608.

Mr. Lamont's latest claims appear to be the continuation of a trend. In the past political opponents have dubbed him 'the most expensive' MSP in the Parliament following annual sums claimed of £30,385 in 2012/13, £33,676 in 2013/14 and £27,631 in 2014/15.

His out-of-pocket expenditure for 2015/16 (so far) leaves Sturgeon, Davidson and Dugdale trailing in his wake. The leaders' respective claims under the heading Member's expenses are a modest £9,712 for the former First Minister, £8,559 for Ms. Davidson and a totally paltry £2,064 for the Labour leader in Scotland. The combined spending of the three ladies comes to £20,355, well short of Mr. Lamont's achievements.

If that comparison appears unfair, how does his spending stack up against that of other Borders politicians from other parties?

Paul Wheelhouse, Mr. Lamont's SNP opponent at the May elections was a list member for the South of Scotland last time round. Like his Tory adversary, Mr.Wheelhouse has an office in Hawick.

The figures show Paul Wheelhouse submitted 107 claims totalling £8,674between April and December last year. Office costs came to £3,878 and travel swallowed up just £210, a fraction of Mr. Lamont's hefty £5,900. Yet the two men live a few miles apart in Coldstream (Lamont) and Ayton (Wheelhouse).

Meanwhile in neighbouring Midlothian South, Tweeddale & Lauderdale SNP MSP Christine Grahame, who is seeking re-election, submitted 122 itemised claims worth £12,196. Her office costs were £8,112 with travel claims amounting to £1,386.

The conclusion is that having Mr. Lamont as an MSP has cost more in expenses than Ms. Grahame and Mr. Wheelhouse combined. It will be up to the voters to decide which 'models' have produced value for money in the past and which ones might cost more to run in the future.

Sunday, 17 April 2016

Council's link to "Panama Papers" law firm


The offshore investment fund selected by Borders councillors to finance their £21 million waste treatment facility at Galashiels is 50% owned by a company registered at the British Virgin Islands offices of Mossack Fonseca, the law firm at the very heart of the 'Panama Papers' tax dodging scandal.

Our revelations concerning New Earth Recycling & Renewables (Infrastructure) PLC [NERR] and its fund are the result of investigations following a previous disclosure that up to six banks were excluded from the role of lenders for the Scottish Borders Council/New Earth Solutions [NES] project at Easter Langlee before the original contract was signed in March 2011.

The council was told in a report from specialist financiers working for NES that the terms offered by the banks represented poor value for both the company and the local authority.

"We therefore concur with New Earth's proposal to initially source 100% of the funding from the highly successful infrastructure investment funds [NERR] ahead of targeting subsequent re-financings," the report concluded.

But four years after the council signed their disastrous deal with NES, NERR still could not come up with the money for the state of the art waste treatment plant and the contract had to be torn up. We decided to try and find out more about NERR, managed by the Premier Group in the Isle of Man, another tax haven.

The documentation was difficult to track down, but eventually copies of reports were located on the Channel Islands Securities Exchange website where the Premier Group funds were listed in yet another offshore location with tax advantages.

The aim of NERR and its fund was, according to the 2014 annual accounts - the most recent to be published - to provide long-term growth by investing indirectly in recycling facilities, primarily in the UK, in the development of such facilities and in the technology associated with them.

While the SBC/NES contract was active the NERR fund invested solely in the Infrastructure PLC which in turn held investments in New Earth Solution Group companies, among them New Earth Solutions (Scottish Borders) Ltd, the firm specially set up to deliver the Easter Langlee plant.

But the paperwork studied by our team shows that the Sterling cell of the fund applied to be voluntarily de-listed from the Channel Islands Securities Exchange barely a year after Borders councillors sanctioned a major alteration to their waste contract with NES after being told bank lending was not an option for the original deal.

The payment of redemptions from the company ceased on November 7th 2013 and the business was then closed to subscriptions on January 8th 2014.

Were council members made aware of these events? If so why was the plug not pulled on the entire project at the time of the suspension of its funder rather than allowing the failed venture to stumble on without a backer for a further 15 months? Those are questions SBC could answer, but no doubt it will shelter behind the curtain of commercial confidentiality unless an independent investigation is ordered into the catastrophe.

The suspension of trading was brought into effect because NERR was unable to calculate a reliable asset value as discussions progressed on restructuring. The suspension remains in force to this day with fund investors unable to access their frozen cash deposits.

Those 2014 accounts also confirm that while it was trading NERR also held equity in the New Earth Solutions Group Ltd as well as an equity interest in NEAT Technology, the business whose untried form of incineration proved to be 'not fit for purpose' in the Borders scheme.

The fund may have recorded a total loss of £30.3 million in the 12 months to June 2014, but the promoters and managers (Premier Group Isle of Man) still managed to run up fees and expenses totalling more than £6.7 million.

Promoters were paid £2.472 million (up from £1.965 million in 2013) while "sales and marketing" accounted for £3.937 million. In addition there was a management fee of £264,000.

At least one executive was a director of all of the companies and funds mentioned above from New Earth Solutions (Scottish Borders) Ltd. to Premier Group (Isle of Man) and beyond.

David Whitaker, the common denominator in all of the various businesses, and a colleague Michael Richardson also indirectly owned a company called Premier Group Distribution Inc (PGD) one of NERR's management shareholders. The records show 50% of the shares in NERR were held by PGD and a further 17% by B4 Sales Ltd, another firm indirectly owned by the two men.

PGD's registered address is the Akara Building in Wickham's Cay, British Virgin Islands, a property occupied by Mossack Fonseca & Co (BVI) Ltd, a branch of the law practice from which 11 million confidential documents related to offshore businesses and trusts were recently leaked into the public domain.

The "Panama Papers" contain details of thousands of offshore companies and secret transactions by individuals with allegations of tax avoidance and evasion on an industrial scale. The Mossack Fonseca operation in BVI is described as a holding company provider while B4 Sales is based in the offices of a similar provider called Newhaven Corporate Services.

Newhaven's website declares: "The nature of our business means that many of our clients prefer to remain anonymous".

Meanwhile Mossack Fonseca's BVI website lists the many advantages of registering a company in their jurisdiction. These include no requirement to file annual returns or financial statements; no requirement to hold annual general meetings of shareholders or directors; the company's accounting books, records and minutes may be kept in any place or country chosen by the director; no tax levied on international and banking transactions; and no capital gains tax, income or other kinds of taxes.

An attempt has already been made to force Scottish Borders Council to make available copies of risk assessments carried out by officials or by lawyers and specialists on their behalf to assemble background on New Earth Solutions and the Easter Langlee project lender based on the Isle of Man.

The council has refused to release any information, claiming there are over 3,000 relevant documents which renders the Freedom of Information request manifestly unreasonable. But these latest disclosures with links to the shady business world that is the British Virgin Islands surely means all of the paperwork associated with the disastrous New Earth Solutions contract MUST be opened up for public scrutiny.

Wednesday, 13 April 2016

Second leak adds more confusion to Borders fiasco


At least six banks expressed "strong interest" in providing between £14 and £21.5 million for the development of a state of the art waste treatment facility in the Scottish Borders, according to confidential documentation seen by Not Just Sheep & Rugby.

A second leaked report linked to the catastrophic Scottish Borders Council-New Earth Solutions Group contract, which has so far cost taxpayers £2.4 million, appears to contradict our recent revelations which were gleaned from a private council minute dated October 2012.

That minute shows councillors were warned bank funding to cover the cost of the original scheme - a conventional Mechanical Biological [MBT] plant producing compost-like material from domestic refuse - could no longer be secured. The only way to overcome the funding issue was to add an untested and unproven Advanced Thermal Technology [ATT] facility to be constructed in tandem with the MBT.

Elected members voted in favour of the radical contract change, but neither the funding problems nor technological difficulties associated with the ATT could be overcome and the entire project had to be abandoned in February 2015.

The latest "leak" concerns a six-page report sent to SBC in September 2010 by financial experts acting for New Earth Solutions [NES] before the original contract for the MBT was signed. The document is marked Private and confidential. It confirms that all banks were ruled out as potential funders ahead of the deal being clinched.

It describes how 25 financial institutions representing the majority of the UK project finance market had been supplied with information about two proposed NES schemes, a £26 million integrated waste treatment and energy recovery facility at Avonmouth (near Bristol) and a potential £14 million waste treatment facility at Galashiels, subject to NES being named as preferred bidder.

The document adds: "In the period following November 2009, New Earth has since incorporated energy recovery into its proposed solution with the capex [capital expenditure] increasing to £21.5 million accordingly".

However, under the terms of the original contract, signed in March 2011, the ATT which would generate heat and power from waste, was to be started within eight years of the MBT's completion.

The financial report reveals that after 15 institutions expressed an interest in receiving additional information, a short list of six potential funders who had shown strong interest was compiled.

Indicative offers were received from three banks, Investec, Royal Bank of Scotland and Bank of Ireland.

But the report from the specialists commissioned by NES concludes: "We believe that the financing terms that are currently available in the banking market represent poor value for money to both New Earth and Scottish Borders Council in respect of the current procurement process.

"We therefore concur with New Earth's proposal to initially source 100% of the funding from the highly successful infrastructure investment funds ahead of targeting subsequent re-financings."

Therefore by September 2010, six months before the deal was signed, it appears all of the banks which had shown enthusiasm for the project had been ruled out of the equation and the entire multi-million pound Easter Langlee venture rested on the ability of the offshore fund New Earth Recycling & Renewables (Infrastructure) PLC [NERR] to come up with the money.

As everyone now knows, despite the radical alteration to the contract - approved by SBC's elected members - to include ATT, the Isle of Man-controlled fund could not deliver while the ATT system itself was not fit for purpose.

In 2012 NERR boasted of having assets in excess of £100 million. But by November 2013 the fund was suspended leaving investors unable to access their money. That remains the position to this day.

We showed this latest "leak" to a consultant who told us: "Perhaps NERR did not want to fund the Borders project. But banks will generally fund this type of facility. Maybe NES did not like the terms as they may not have made sufficient profit".

COMING NEXT: Did Borders councillors know about NERR's tax haven links?

Sunday, 10 April 2016

Leaked document sheds new light on Borders waste disaster


The £14 million waste treatment facility which Scottish Borders Council intended building at Galashiels had encountered significant funding issues only nine months after the original contract was signed, according to a leaked confidential document.

Contents of a private minute from a full council meeting in October 2012 have been mailed anonymously to Bill Chisholm, the retired Borders journalist who has been investigating the loss of £2.4 million resulting from the local authority's disastrous liaison with waste management 'specialists' New Earth Solutions.

It seems the unauthorised leak is designed to show the council in a good light as selected passages from the minute are highlighted with a marker pen. But Borders taxpayers who are picking up the tab for the unmitigated failure by their elected representatives may be more interested in the story the two-page document has to tell.

Apparently the decision to abandon the project in February 2015 and tear up the £65 million 24-year contract with NES was only taken after a three-year period in which the two parties to the deal were desperately trying to attract and pin down a financial backer.

The contents of the secret minute are crucial in the entire saga as they reveal why councillors sanctioned a so-called Deed of Variation in the contract to include a form of incineration known as Advanced Thermal Technology (ATT) capable of generating heat and power, as well as a conventional Mechanical Biological Treatment (MBT) facility - as originally envisaged - at Easter Langlee.

It is now clear that SBC had to tweak the terms of their waste management contract solely for the benefit of a private company which simply could not come up with the cash to develop a vital environmental facility for the Scottish Borders. But should NES have been given a three-year breathing space or would it have been better for all concerned if the council had taken a hard line and kicked the contract into touch in 2012?

Efforts to uncover detailed reasons for the failure of the entire project have been ongoing for more than 12 months with SBC steadfastly refusing to release any significant information via the Freedom of Information route. The council maintains its dealings with NES - the company has also refused to comment when asked questions - must remain confidential until 2021 thanks to a special clause in their discredited and now defunct contract.

The loss of millions of pounds of public money, spent by SBC on costly consultants, high earning lawyers and other expensive specialist companies seems to be a matter of no consequence to Audit Scotland, the public expenditure watchdog, which has declined to conduct an investigation into the fiasco.

The leaked minute is based on a detailed report to councillors dated 25 October 2012, and which was compiled by Director of Environment & Infrastructure Rob Dickson. But the report itself remains confidential.

A previous report, also considered by the full council in private on 24 March 2011, resulted in elected members approving proposals for the MBT facility which was designed to divert 80% of Borders rubbish from landfill by transforming the garbage into a compost-like material. This tried and tested form of treatment has already been deployed successfully in many parts of the United Kingdom.

The 2011 document identifies the financial backer for the Borders project as New Earth Recycling & Renewables (Infrastructure) PLC, (NERR) a fund controlled and administered off-shore by Premier Group (Isle of Man) which in turn had links to a company in the British Virgin Islands. At that stage all of the arrangements for the MBT were in place with construction work due to commence later in the year.

But the October 2012 council record reveals: "The report[from Mr. Dickson] outlined the background to the contract and advised that New Earth Solutions had indicated in January 2012 that a MBT facility from service commencement without ATT meant that the project could no longer get bank funding and therefore to allow project delivery the existing contract required to be changed".

It is surely vital to know whether councillors were made aware of the funding crisis in January 2012 or whether they were kept in the dark for ten months until the October meeting.

The next section of the leaked minute reads: "The project team had been negotiating a solution to resolve this situation with NES since 12 January 2012. It was believed that a best value agreement had now been reached whereby NES would now deliver Mechanical Treatment and Advanced Thermal Treatment (integrated facility) from service commencement.

"There was no additional revenue cost associated with this proposed Deed of Variation, but timescales were elongated and the capital programme associated with the project required to be re-phased".

However, there is no indication given in the minute as to why the funding from NERR was no longer available for a MBT-only development.

A specialist contacted by Not Just Sheep & Rugby commented: " It is ironic that NERR, who only lend to New Earth projects and technology, would not fund an MBT only project when they do this all the time with other NES facilities."

And despite the radical contract amendment nodded through by councillors there was still no guarantee of funding without further changes to the deal.

For the minute states: "New Earth Solutions believed that these contract amendments would allow the contract to reach financial close for the delivery of the MBT and ATT facility, but funders still needed to complete their due diligence review of the existing contract and these proposed changes, so further contract changes might be required."

The report to councillors went on: "The proposed changes to the project still represented best value for the council to meet the legislative and financial drivers. The new integrated facility would actually deliver added benefits and reduce risk to the council".

Again, the minute does not go into detail about these alleged benefits. It has been suggested  that such a radical change to the contract means consideration should have been given to going back to square one and inviting fresh tenders for the project.

The very informative minute claims the delay in delivery of the new Borders waste facility actually benefitted the council as there was no increase to operational costs and delivery coincided closer to the point at which it became cheaper to treat waste than landfilling it [2017/18].

One of the innovations among many, which elected members believed would turn Scottish Borders Council into national leaders in the waste management sector. was the fact that the incinerator would produce heat and power for a district heating scheme in and around Galashiels. The formation of a business reveling in the name Scottish Borders District Heating Company Ltd in April 2013 was to have been the vehicle to bring cheap energy to hundreds of homes, public buildings and commercial premises.

But in October 2012, six months before the new company was launched, the SBC minute records: "Members noted that there were no arrangements for any housing developer to use the heat produced by the new facility and asked that they be kept updated on any developments in this area".

Not Just Sheep & Rugby can update councillors on that aspect of their botched waste strategy. Scottish Borders District Heating Company Ltd. is currently in the process of being struck off the Register of Companies never having traded. The total value of the company was £100, and all of the shares were owned by New Earth Solutions Group.

Thursday, 7 April 2016

Cabinet Office joins Borders councillors on the naughty step

EWAN LAMB watches more dunces caps being handed out

There was a soupcon of much needed relief this week for those members of Scottish Borders Council who signed up for a useless form of waste disposal by incineration when the equally gullible Westminster Cabinet Office found itself embarrassed and out of pocket as another "revolutionary" form of thermal technology bit the dust.

While Scottish Borders Council [SBC] - or should that be local residents - had their fingers burned to the tune of at least £2.5 million after elected members fell for untested gasification and pyrolysis techniques, it has emerged that an American corporation revelling in the name Air Products has been forced to exit the largest energy from waste project in the world, nursing losses of a billion dollars.

The partly built treatment complex on Teesside is being abandoned and sold off after the operators encountered insuperable technological difficulties. It seems this highly controversial method of dealing with municipal rubbish remains unworkable in 2016, three years AFTER Borders councillors opted for it.

The disastrous end to this UK Government-backed venture will rekindle painful memories for all those involved in the Borders own version of 'Advanced Thermal Technology' [ATT] which ended in tears and a financial millstone for taxpayers in February 2015 when a 24-year contract between the council and New Earth Solutions had to be abandoned.

A waste treatment plant planned for Easter Langlee, Galashiels, was undeliverable, again due to technological difficulties and the inability of the NES financial backers to put up the cash.

The Borders plant was to have been based on the (falsely) acclaimed NES facility at Avonmouth, Bristol which certainly impressed former Secretary of State for Energy and Climate Change Ed Davey. He declared in 2013: "The 13MW Advanced Thermal Conversion project in Avonmouth delivered by New Earth Solutions is an example of the excellent renewable energy projects being built in the south west of England".

Oops! We can only assume Mr. Davey is blissfully unaware that the problematic Avonmouth incinerator, which also left Borders councilors gobsmacked, has had to be offloaded by NES because it was so costly, and under-performed on a regular basis.

Just like Borders elected members, Mr Davey and his Coalition Cabinet colleagues fell for gasification hook line and sinker in 2013.

In an extremely upbeat news release Tory minister Francis Maude announced: "A new deal was agreed today that will significantly lower the cost government pays for energy and create hundreds of local jobs."

He was telling the electorate how a 20-year contract (sound familiar?) with Air Products was expected to deliver £84 million in savings through an 'innovative fixed agreement that will provide stability in what the public sector pays for energy'.

So how is Mr. Maude feeling now that all of his grand plans for savings from burning garbage lie in tatters? Will he be any more apologetic than SBC after falling for a parallel version of snake oil salesmanship, a technique involving generous helpings of hype linked to claims of miraculous powers? Why does it always seem to be the public sector which falls for this type of hokum? I think we should be told...

In an article about the latest ATT disaster, Shlomo Dowen, national co-ordinator of the United Kingdom Without Incinerators' Network (UKWIN) says it appears a great deal of money has been wasted on a scheme that the Government expected would save money.

This called into question the wisdom of the UK depending on such unreliable facilities for either energy generation or waste management, said Mr. Dowen.

He added: "Air Products' decision to ditch gasification is reminiscent of New Earth Solutions, who decided in July 2015 to ditch their gasification business because, after years of trying, they could not get their technology to work. Many other gasification and pyrolysis have involved companies with less diverse portfolios, and simply ended with the company going bankrupt".

In a hard hitting comment published in a specialist magazine Mr Dowen warns: "Gasification and pyrolysis are synonymous with technology failures, bankruptcies and broken promises. We hope this latest admission of defeat acts as a wake up call for the Government who have been unwisely stoking the whole misadventure with environmentally harmful subsidies and other unwarranted financial support."

Tuesday, 5 April 2016

From nought to 3,000 in no time at all!


A Freedom of Information request to Scottish Borders Council produced no fewer than 3,000 separate documents linked to the requester's simple query about the authority's disastrous dalliance with waste management 'specialists' New Earth Solutions[NES].

Because of the sheer volume of paperwork, SBC claimed the request - seeking information about risk assessments carried out before the £65 million contract was awarded to NES and prior to a radical change in the deal in 2012 - was 'manifestly unreasonable'.

The veritable mountain of confidential information which SBC has linked to the request contrasts sharply with a recent case involving another aspect of the many facetted catastrophe in which the council maintained nothing had been written down during and after a visit by councillors and officials to inspect the misfiring NES plant near Bristol. This was the facility on which a waste disposal solution for the Borders was to be based.

In a submission to the Scottish Information Commissioner [SIC], council officers provided copies of the 3,000 documents and emphasized the sheer scale of the work required to copy, collate and redact the information so that it could be provided to the FOI requester.

A written decision notice from Commissioner Rosemary Agnew states: "The Council argued that the cost of complying with the request, in terms of officers' time being diverted from its core functions, would be significantly disproportionate".

And yet SBC presumably found the time to pore over the 3,000 separate reports which were eventually sent to the SIC's investigators. So did that process interfere with core functions?

The report continues: "The Commissioner acknowledges that the requester is only seeking information that encapsulates the steps taken by the Council to manage risk or demonstrate that the Council was aware of the risks associated with the NES waste management project, and that he believes this should be available in a few key documents".

In fact the requester had been told by a procurement expert that there should only be between five and ten financial reports and perhaps between three and eight technology reports.

Either before or after the ill-fated "due diligence" trip to Bristol it emerged that NES and its funders could not finance the proposed incinerator at Galashiels while the brand of technology selected for the venture was not fit for purpose.

The council's reluctance or refusal to make risk assessments public leads to the conclusion that elected members agreed to take a series of huge risks prior to the loss of millions of pounds of taxpayers' money when the scheme collapsed in chaos in February 2015.

To date SBC has refused to release a single page of documentation of any significance which would explain the financial debacle to those who are footing the bill. The council continues to rely on its catch-all confidentiality clause with NES which is set to run until 2021.

The Commissioner concludes: "On balance, while there are strong public interest arguments in favour of disclosure of the information covered by the request, the Commissioner accepts, that in the circumstances of this case, these are outweighed by the public interest in preventing the disproportionate levels of disruption to the Council's functions that would result if the necessary staff resources were diverted to provide all the information requested."

However, Ms. Agnew does require the council to provide the requester with advice and assistance to help him narrow the scope of his request. Unfortunately members of the public are unaware of the information held by public authorities and so are placed at a considerable disadvantage.

In a very short space of time SBC has deployed two entirely different strategies in a bid to escape scrutiny, first by claiming briefings concerning the Bristol jaunt were all conducted verbally, and then by subjecting the SIC to a blizzard of paperwork under the heading 'Risk Assessments'. Neither  strategy should be allowed to prevail.