DOUG COLLIE on yet another shattering blow for some Borders councillors
The flagship waste incinerator which was the scene of a 'due diligence' inspection by a large Scottish Borders Council delegation has developed so many technical glitches that its new owners have been forced to shut it down...and the plant will not fire up again until at least 2018.
Those readers who have been following the embarrassing fiasco linked to the local authority's 24-year contract with waste treatment "experts" New Earth Solutions will be aware of how impressed councillors and senior officers were on returning from their trip to the NES facility at Avonmouth, near Bristol in October 2014.
These representatives of tens of thousands of Borders electors declared themselves "illuminated and impressed" by what they had seen. A scaled down version of the dual Mechanical Biological Treatment (MBT) and Advanced Thermal Technology (ATT) model being pioneered in south-west England would provide the ideal solution for the Scottish Borders' waste disposal needs.
'Due diligence' had been achieved, council taxpayers were assured. However, subsequent investigative work by Not Just Sheep & Rugby has shown all was not well with the Avonmouth set-up before, during and after the much-heralded visit.
The spluttering ATT plant which is used to convert refuse derived fuel (RDF) into electricity via processes known as gasification and pyrolysis has been functioning at only a fraction of its full capacity, and NES offloaded it in 2015 to a new consortium, Avonmouth Bio Power (ABP). SBC's due diligence claims were already unravelling in spectacular fashion.
Now, any trace of credibility remaining with the delegation has disappeared with the bombshell news of the EfW (Energy from Waste) plant's closure which apparently occurred several months ago.
Avonmouth Bio Power's first set of accounts describe the calamitous issues and financial losses sustained into 2016. Yet members of SBC were convinced as far back as 2012 that Avonmouth's technology would soon propel the Borders to the summit of Scotland's waste treatment league.
A Strategic Report from ABP (Energy)'s directors explains that ever since the initial plant implementation, the inability of the NES MBT plant to keep the supplies of RDF within specification has driven development of the ATT plant's capability to accept a wider than intended and continually variable RDF specification.
"Whilst a number of improvements were achieved, the plant has consequently always operated at below its targeted design point. This has led to reduced thermal output and reduced availability. As a result throughput of RDF has not met the financial targets and the export of electricity has been significantly below expectations."
It is surely a matter of grave concern that similar problems and issues would almost certainly have cropped up at the Easter Langlee treatment facilities had they been delivered. So where is the documentary proof that the Borders delegation did indeed achieve 'due diligence'?
The ABP report points out that as NES Group were not in a position to improve the quality of RDF or provide sufficient funding to allow the plant to achieve its full operating and commercial performance, the ownership and financing of Avonmouth was restructured in July 2015 with Aurium Capital Markets and Australia's Macquarie Bank acquiring ownership together with Syngas Products, the technology supplier.
According to the report: "Funds were made available for capital expenditure on a material improvement programme, the first phase of which was undertaken in late 2015. This targeted improvements in availability, and the capability of taking waste and other material from multiple sources, to reduce the reliance on NES as the sole supplier of RDF.
"While these works were largely successful, the facility suffered from operational difficulties from completion through to January 2016 as a result of a fire at the neighbouring MBT, which materially disrupted feedstock supply, and therefore the plant's ability to operate even close to full capacity".
There were material improvements in operational performance. However, these tended to be sporadic and short-lived. "While there was scope for optimism at various stages, availability continued to be a problem predominantly due to the fuel issues mentioned previously.
"As a result in June 2016 the Board decided that a more fundamental approach was required to resolve the continuing operational and financial issues being experienced by the plant. It was agreed to suspend activity in order to undertake a major redevelopment programme, designed to address operational problems, including the potential switch of fuel supply from RDF - a key requirement of the development being that the site can operate on a readily available consistent feedstock.
"The detailed implementation plans for the redevelopment are currently being finalised and it is anticipated these works will commence during early 2017 and that operations at the plant may re-commence during 2018".
One wonders how those Borders councillors who presided over the New Earth farce, and who will be seeking re-election a few short months from now, will explain away their role in a tragic saga of incompetence which has cost local taxpayers millions of pounds.
Tuesday, 27 December 2016
Wednesday, 21 December 2016
Investigation into failed fund to take months, liquidators say
by EWAN LAMB
New information has emerged concerning the disastrous contract between Scottish Borders Council and failed waste treatment firm New Earth Solutions Group (NES) as liquidators and their legal advisers continue a complicated investigation into the collapse of the fund selected to bankroll a £21 million project at Galashiels.
It has been revealed that the original deal which Borders councillors signed in April 2011 for the construction of a Mechanical Biological Treatment (MBT) facility to process the region's rubbish was effectively dead in the water only nine months later due to funding issues.
In January 2012, the managing director of NES told the local authority his company could no longer obtain funding for the construction of the planned MBT, and the two stage process involving completion of the MBT ahead of an Advanced Thermal Technology (ATT) system to convert waste material into energy was not deliverable.
According to sections of a previously redacted council report which have now been released following Freedom of Information requests, this serious setback in the development process would result in months of discussions between the parties in a bid to find a way forward.
Eventually, in October 2012, elected members sanctioned a so-called Deed of Variation in the contract with NES so that MBT and ATT projects could be combined and integrated.
The contract amendment was meant to allow the multi-million pound project at Easter Langlee to finally reach financial closure. But two-and-a-half years later the fatally flawed revised deal had to be abandoned with NES unable to provide satisfactory technology and worthless offshore investment fund New Earth Recycling & Renewables [Infrastructure] PLC (NERR) unable to come up with the cash.
The collapse of the 24-year contract left local taxpayers at least £2.4 million out of pocket, the council choosing merely to write off the losses and move on without a full investigation, and with no interventions from independent watchdogs like Audit Scotland..
However, large swathes of this crucial report to councillors remain hidden underneath black ink with four complete pages and a number of appendices completely censored. It is difficult to see how this veil of secrecy can remain intact for much longer now that all of the businesses associated with the Borders fiasco - NES, NERR and parent organisation Premier Group (Isle of Man) Ltd - are all completely bust with their investors and shareholders unlikely to get a penny back.
NERR succumbed in July with the appointment of Deloitte as liquidators. A newly published update for creditors says: "The joint liquidators, alongside their legal advisers in the Isle of Man and UK. are continuing their investigations into the failure of the Company.
"However, this involves obtaining information and documentation from a variety of sources and a review of a considerable volume of documentation. It is therefore too early in the process to advise whether there are claims which can be brought by the joint liquidators against third parties which, if successful, would enable a return to be made to creditors and shareholders."
Deloitte anticipate providing a further update on their investigation into the failure of NERR towards the end of March 2017.
Meanwhile, the recently released material from SBC shows why the 'Deed of Variation' report was classified as confidential in October 2012. The document contains the following passage: " STATUS OF REPORT - As the contract with Scottish Borders Council represents New Earth Solutions' first project in Scotland, it will strengthen market confidence in NES' ability to deliver projects throughout the United Kingdom.
"Commercial and reputational damage would be caused to NES if the technical or financial details of this report were made public. Due to the confidentiality clauses that are in place within the contract, Scottish Borders Council could be liable for any commercial or reputational damage caused to NES".
New Earth put forward a list of factors which had allegedly rendered a stand-alone MBT facility untenable. These included the unacceptable level of returns for funders without the prospect of ATT and the revenues it would generate.
NES requested that in order for the MBT facility to be constructed the existing version of the project agreement would have to be changed to provide funders with the required return on investment.
"The project team's initial evaluation of the NES proposals indicated that if all of the proposals were conceded by SBC for the term of the contract, it would add an estimated (figure redacted) to the current value of the contract.
"This would mean that the original estimated cost avoidance against the 'do nothing' scenario (i.e. continue to landfill waste for 24 years) would be wiped out. These proposals were therefore unacceptable to the council and NES were informed of this".
The report reveals that negotiations continued without NES being able to provide council officers with a satisfactory solution. Discussions culminated with a letter from NES in MAy 2012 stating that due to irreconcilable differences the MBT only solution would be dropped and a fully integrated MBT and ATT solution would be delivered from day one subject to the appropriate permits and permissions.
New information has emerged concerning the disastrous contract between Scottish Borders Council and failed waste treatment firm New Earth Solutions Group (NES) as liquidators and their legal advisers continue a complicated investigation into the collapse of the fund selected to bankroll a £21 million project at Galashiels.
It has been revealed that the original deal which Borders councillors signed in April 2011 for the construction of a Mechanical Biological Treatment (MBT) facility to process the region's rubbish was effectively dead in the water only nine months later due to funding issues.
In January 2012, the managing director of NES told the local authority his company could no longer obtain funding for the construction of the planned MBT, and the two stage process involving completion of the MBT ahead of an Advanced Thermal Technology (ATT) system to convert waste material into energy was not deliverable.
According to sections of a previously redacted council report which have now been released following Freedom of Information requests, this serious setback in the development process would result in months of discussions between the parties in a bid to find a way forward.
Eventually, in October 2012, elected members sanctioned a so-called Deed of Variation in the contract with NES so that MBT and ATT projects could be combined and integrated.
The contract amendment was meant to allow the multi-million pound project at Easter Langlee to finally reach financial closure. But two-and-a-half years later the fatally flawed revised deal had to be abandoned with NES unable to provide satisfactory technology and worthless offshore investment fund New Earth Recycling & Renewables [Infrastructure] PLC (NERR) unable to come up with the cash.
The collapse of the 24-year contract left local taxpayers at least £2.4 million out of pocket, the council choosing merely to write off the losses and move on without a full investigation, and with no interventions from independent watchdogs like Audit Scotland..
However, large swathes of this crucial report to councillors remain hidden underneath black ink with four complete pages and a number of appendices completely censored. It is difficult to see how this veil of secrecy can remain intact for much longer now that all of the businesses associated with the Borders fiasco - NES, NERR and parent organisation Premier Group (Isle of Man) Ltd - are all completely bust with their investors and shareholders unlikely to get a penny back.
NERR succumbed in July with the appointment of Deloitte as liquidators. A newly published update for creditors says: "The joint liquidators, alongside their legal advisers in the Isle of Man and UK. are continuing their investigations into the failure of the Company.
"However, this involves obtaining information and documentation from a variety of sources and a review of a considerable volume of documentation. It is therefore too early in the process to advise whether there are claims which can be brought by the joint liquidators against third parties which, if successful, would enable a return to be made to creditors and shareholders."
Deloitte anticipate providing a further update on their investigation into the failure of NERR towards the end of March 2017.
Meanwhile, the recently released material from SBC shows why the 'Deed of Variation' report was classified as confidential in October 2012. The document contains the following passage: " STATUS OF REPORT - As the contract with Scottish Borders Council represents New Earth Solutions' first project in Scotland, it will strengthen market confidence in NES' ability to deliver projects throughout the United Kingdom.
"Commercial and reputational damage would be caused to NES if the technical or financial details of this report were made public. Due to the confidentiality clauses that are in place within the contract, Scottish Borders Council could be liable for any commercial or reputational damage caused to NES".
New Earth put forward a list of factors which had allegedly rendered a stand-alone MBT facility untenable. These included the unacceptable level of returns for funders without the prospect of ATT and the revenues it would generate.
NES requested that in order for the MBT facility to be constructed the existing version of the project agreement would have to be changed to provide funders with the required return on investment.
"The project team's initial evaluation of the NES proposals indicated that if all of the proposals were conceded by SBC for the term of the contract, it would add an estimated (figure redacted) to the current value of the contract.
"This would mean that the original estimated cost avoidance against the 'do nothing' scenario (i.e. continue to landfill waste for 24 years) would be wiped out. These proposals were therefore unacceptable to the council and NES were informed of this".
The report reveals that negotiations continued without NES being able to provide council officers with a satisfactory solution. Discussions culminated with a letter from NES in MAy 2012 stating that due to irreconcilable differences the MBT only solution would be dropped and a fully integrated MBT and ATT solution would be delivered from day one subject to the appropriate permits and permissions.
Sunday, 18 December 2016
Spectacular collapse: now an inspector calls!
by DOUGLAS SHEPHERD
The dramatic financial collapse of a group of businesses linked to a multi-million pound waste management contract rubber stamped by Scottish Borders councillors has been followed by the appointment of liquidators to the off-shore parent company which is to be wound up.
Financial commentators have expressed shock and surprise following confirmation that directors of fund promoters and managers Premier Group (Isle of Man) Ltd have decided to call it a day only weeks after several of their investment entities crashed, leaving thousands of investors out of pocket.
Documents lodged with the Manx Companies Registry, copies of which have been acquired by Not Just Sheep & Rugby, show how the decision was taken to wind up Premier Group at a 45-minute meeting of the three shareholders, Jamie Sutton, John Bourbon and Michael Richardson. Messrs Bourbon and Richardson participated by telephone as Mr Sutton chaired the meeting.
According to an extract of minutes of the meeting a so-called extraordinary resolution, passed unanimously by the shareholders states: "as the company cannot, by reason of its proposed surrendering of regulatory licence and the reduced sources of income, continue in business, the Company be wound up voluntarily".
The day before the meeting directors Sutton and Richardson submitted a Declaration of Solvency to the Isle of Man regulatory authorities in which they did "solemnly and sincerely declare that we have made a full enquiry into the affairs of the Company and have formed the opinion that the company will be able to pay its debts in full within a period not exceeding 12 months".
The failed investment funds, which yielded Premier's bosses many millions of pounds in management fees over a number of years included the New Earth Recycling & Renewables [Infrastructure] Fund (NERR) and the Eco-Resources Fund which invested in bamboo plantations in Central America. Both Premier subsidiaries crashed spectacularly this year with liquidators appointed.
Scottish Borders Council had expected NERR to put up the £21 million for a waste treatment centre at Easter Langlee, Galashiels in a venture which finally collapsed in 2015 after four years without any progress whatsoever.
The council's dealings with NERR and the associated New Earth Solutions Group which was also under Premier Group control cost local taxpayers at least £2.4 million. Now SBC is planning to spend a further £4 million on a waste transfer station on the site of the failed project to handle the region's rubbish before it is hauled by road to a centre outwith the area for treatment.
It is believed New Earth Solutions, now in administration, lost an estimated £4 million as a direct result of the Borders venture.
Liquidators Deloitte are currently investigating the NERR collapse, but have indicated there will be no return for investors.
Not Just Sheep & Rugby can now report that dealings linked to the Eco-Resources Fund are to be the subject of a separate investigation by order of the Isle of Man High Court following an application from the Isle of Man Financial Services Authority (IOMFSA).
Insolvency practitioner Paul Shimmin has been named as the inspector who will look into the affairs of the defendants (Eco-Resources Fund), and will submit reports to the Court. He has also been instructed to investigate the conduct of the fund's manager (Premier Group IOM Ltd), its administrator (Moore Fund Administration IOM) and its custodian Kleinwort Benson (Guernsey) Ltd.
The court order states: "The inspector shall deliver an interim report within one month of his appointment and thereafter further interim reports at monthly intervals to the Court with a copy to the claimant (IOMFSA)."
Mr Shimmin is also asked to report on any matter which comes to his attention during the course of the investigation which he considers ought to be presented to the Court. The claimant has liberty to add to or modify the scope of the investigation.
The last Eco-Resources Fund accounts to be published (covering 2014) show the managers collected fees of £90,906 from the loss-making entity. In their role as promoters Premier Group received £681,797 (up from £163,053 in 2013). The Fund also paid out a performance fee of £598,175 while sales and marketing costs of £1,843,371 (2013 £905,897) were levied.
The fee paid to Moore as administrators was £121,339 while custodian Kleinwort Benson picked up £30,091.
The dramatic financial collapse of a group of businesses linked to a multi-million pound waste management contract rubber stamped by Scottish Borders councillors has been followed by the appointment of liquidators to the off-shore parent company which is to be wound up.
Financial commentators have expressed shock and surprise following confirmation that directors of fund promoters and managers Premier Group (Isle of Man) Ltd have decided to call it a day only weeks after several of their investment entities crashed, leaving thousands of investors out of pocket.
Documents lodged with the Manx Companies Registry, copies of which have been acquired by Not Just Sheep & Rugby, show how the decision was taken to wind up Premier Group at a 45-minute meeting of the three shareholders, Jamie Sutton, John Bourbon and Michael Richardson. Messrs Bourbon and Richardson participated by telephone as Mr Sutton chaired the meeting.
According to an extract of minutes of the meeting a so-called extraordinary resolution, passed unanimously by the shareholders states: "as the company cannot, by reason of its proposed surrendering of regulatory licence and the reduced sources of income, continue in business, the Company be wound up voluntarily".
The day before the meeting directors Sutton and Richardson submitted a Declaration of Solvency to the Isle of Man regulatory authorities in which they did "solemnly and sincerely declare that we have made a full enquiry into the affairs of the Company and have formed the opinion that the company will be able to pay its debts in full within a period not exceeding 12 months".
The failed investment funds, which yielded Premier's bosses many millions of pounds in management fees over a number of years included the New Earth Recycling & Renewables [Infrastructure] Fund (NERR) and the Eco-Resources Fund which invested in bamboo plantations in Central America. Both Premier subsidiaries crashed spectacularly this year with liquidators appointed.
Scottish Borders Council had expected NERR to put up the £21 million for a waste treatment centre at Easter Langlee, Galashiels in a venture which finally collapsed in 2015 after four years without any progress whatsoever.
The council's dealings with NERR and the associated New Earth Solutions Group which was also under Premier Group control cost local taxpayers at least £2.4 million. Now SBC is planning to spend a further £4 million on a waste transfer station on the site of the failed project to handle the region's rubbish before it is hauled by road to a centre outwith the area for treatment.
It is believed New Earth Solutions, now in administration, lost an estimated £4 million as a direct result of the Borders venture.
Liquidators Deloitte are currently investigating the NERR collapse, but have indicated there will be no return for investors.
Not Just Sheep & Rugby can now report that dealings linked to the Eco-Resources Fund are to be the subject of a separate investigation by order of the Isle of Man High Court following an application from the Isle of Man Financial Services Authority (IOMFSA).
Insolvency practitioner Paul Shimmin has been named as the inspector who will look into the affairs of the defendants (Eco-Resources Fund), and will submit reports to the Court. He has also been instructed to investigate the conduct of the fund's manager (Premier Group IOM Ltd), its administrator (Moore Fund Administration IOM) and its custodian Kleinwort Benson (Guernsey) Ltd.
The court order states: "The inspector shall deliver an interim report within one month of his appointment and thereafter further interim reports at monthly intervals to the Court with a copy to the claimant (IOMFSA)."
Mr Shimmin is also asked to report on any matter which comes to his attention during the course of the investigation which he considers ought to be presented to the Court. The claimant has liberty to add to or modify the scope of the investigation.
The last Eco-Resources Fund accounts to be published (covering 2014) show the managers collected fees of £90,906 from the loss-making entity. In their role as promoters Premier Group received £681,797 (up from £163,053 in 2013). The Fund also paid out a performance fee of £598,175 while sales and marketing costs of £1,843,371 (2013 £905,897) were levied.
The fee paid to Moore as administrators was £121,339 while custodian Kleinwort Benson picked up £30,091.
Tuesday, 13 December 2016
"Due diligence" claim fails data test
EXCLUSIVE - by DOUG COLLIE
Damning evidence that the Avonmouth Energy from Waste facility, inspected during a two-day "due diligence" visit by a Scottish Borders Council delegation, was performing badly before, during and after the jaunt appears to have been missed or ignored by eight councillors and a team of top officials.
Regular readers of Not Just Sheep & Rugby will be aware that the sixteen strong deputation who made the 700-mile round trip in October 2014 at a cost to taxpayers of £4,000, returned from the New Earth Solutions (NES) treatment plant near Bristol mightily impressed by what they had seen.
Council leader David Parker described the Avonmouth trip as “valuable and illuminating”.
But just four months later the plans for a scaled down version of Avonmouth at Easter Langlee, Galashiels, at an estimated cost of £21 million, were scrapped in chaos because the technology did not work and the funding could not be secured. At this point SBC had squandered at least £2.4 million: so much for "due diligence".
Statistics available from energy watchdog Ofgem would have shown the eight Borders councillors - Parker, Edgar, Brown, Paterson and Davidson from the ruling group, and Ballantyne, Mountford and Scott from the Tory opposition - just how poorly Avonmouth was functioning when compared to other fuelled stations.
Throughout 2014 the NES facility never operated at more than 22 per cent of its capacity measured in so-called Megawatt Hours (MWH) and averaged a meagre 15.91% over the calendar year. At the same time the average capacity achieved by fuelled stations in the UK stood at 52.08%, up from 48.25% in 2013.
Here are the monthly capacity percentages for 2014 for the Avonmouth energy facility, operated by New Earth Energy (West) Operations Ltd at the time. The facility was later "sold" for no monetary consideration to Avonmouth Bio Power Energy Ltd, the business which continues to run the plant.
January 2014 9.46%; February 13.99%; March 17.62%; April 14.71%; May 9.11%; June 16.066%; July 21.26%; August 18.69%; September 13.35%; October 20.57%; November 20.41%; December 15.72%.
According to the published data Avonmouth, which was commissioned in April 2013, registered an average production capacity of 11.89% between October 2015 and June of this year. In February 2015 - the month in which SBC and NES tore up their "revolutionary" contract the percentage was an equally unimpressive 18.78; it had slumped to 13.55% in August 2015 with the percentage recorded at an all time low of 4.36% in June 2016.
Did the council delegation ask for or seek to obtain these depressing statistics? After all Avonmouth was regarded as the cutting edge waste treatment centre which would propel SBC to the top of Scotland's recycling/energy from waste league tables.
As we reported recently, sections of confidential documents obtained via a Freedom of Information investigation conducted by the Scottish Information Commissioner, revealed the conclusions of in-house 'post mortems' conducted into the SBC/NES fiasco.
Apparently the delegation toured the wrong NES facility, and should have gone to NES Canford, more than 100 miles from Avonmouth. The report covering "lessons learned" tells us: "The visit was to demonstrate how a site worked. However Avonmouth did not show this in balance; instead it was being over positive".
It may be difficult to understand how the Ofgen data for Avonmouth could ever be construed as "over positive". And the figures certainly seem to provide conclusive proof that members of the SBC delegation failed in their "due diligence" mission.
Damning evidence that the Avonmouth Energy from Waste facility, inspected during a two-day "due diligence" visit by a Scottish Borders Council delegation, was performing badly before, during and after the jaunt appears to have been missed or ignored by eight councillors and a team of top officials.
Regular readers of Not Just Sheep & Rugby will be aware that the sixteen strong deputation who made the 700-mile round trip in October 2014 at a cost to taxpayers of £4,000, returned from the New Earth Solutions (NES) treatment plant near Bristol mightily impressed by what they had seen.
Council leader David Parker described the Avonmouth trip as “valuable and illuminating”.
“The integrated WTF is a really big deal for our council as
it will transform the way we deal with our waste and help us comply with our
zero waste obligations,” he told the Border Telegraph.
“It also involves a major investment, in partnership with
NES, which requires councillors to carry out due diligence and, in that
respect, the trip was necessary. I am satisfied after our visit that we are on
the right track and confident that the WTF will be up and running before the
2019 contract deadline, hopefully by mid-2017.”But just four months later the plans for a scaled down version of Avonmouth at Easter Langlee, Galashiels, at an estimated cost of £21 million, were scrapped in chaos because the technology did not work and the funding could not be secured. At this point SBC had squandered at least £2.4 million: so much for "due diligence".
Statistics available from energy watchdog Ofgem would have shown the eight Borders councillors - Parker, Edgar, Brown, Paterson and Davidson from the ruling group, and Ballantyne, Mountford and Scott from the Tory opposition - just how poorly Avonmouth was functioning when compared to other fuelled stations.
Throughout 2014 the NES facility never operated at more than 22 per cent of its capacity measured in so-called Megawatt Hours (MWH) and averaged a meagre 15.91% over the calendar year. At the same time the average capacity achieved by fuelled stations in the UK stood at 52.08%, up from 48.25% in 2013.
Here are the monthly capacity percentages for 2014 for the Avonmouth energy facility, operated by New Earth Energy (West) Operations Ltd at the time. The facility was later "sold" for no monetary consideration to Avonmouth Bio Power Energy Ltd, the business which continues to run the plant.
January 2014 9.46%; February 13.99%; March 17.62%; April 14.71%; May 9.11%; June 16.066%; July 21.26%; August 18.69%; September 13.35%; October 20.57%; November 20.41%; December 15.72%.
According to the published data Avonmouth, which was commissioned in April 2013, registered an average production capacity of 11.89% between October 2015 and June of this year. In February 2015 - the month in which SBC and NES tore up their "revolutionary" contract the percentage was an equally unimpressive 18.78; it had slumped to 13.55% in August 2015 with the percentage recorded at an all time low of 4.36% in June 2016.
Did the council delegation ask for or seek to obtain these depressing statistics? After all Avonmouth was regarded as the cutting edge waste treatment centre which would propel SBC to the top of Scotland's recycling/energy from waste league tables.
As we reported recently, sections of confidential documents obtained via a Freedom of Information investigation conducted by the Scottish Information Commissioner, revealed the conclusions of in-house 'post mortems' conducted into the SBC/NES fiasco.
Apparently the delegation toured the wrong NES facility, and should have gone to NES Canford, more than 100 miles from Avonmouth. The report covering "lessons learned" tells us: "The visit was to demonstrate how a site worked. However Avonmouth did not show this in balance; instead it was being over positive".
It may be difficult to understand how the Ofgen data for Avonmouth could ever be construed as "over positive". And the figures certainly seem to provide conclusive proof that members of the SBC delegation failed in their "due diligence" mission.
Monday, 5 December 2016
At a loss to explain collapsing funds
DOUGLAS SHEPHERD reports
The offshore fund managers who were supposed to come up with the cash for a £21 million waste treatment centre to serve the Scottish Borders have announced that for the fourth time in less than six months one of their collection of investment companies is to be wound up and liquidated.
Premier Group (Isle of Man) Ltd.'s website carries the upbeat banner headline "intelligent and innovative investment ideas". Perhaps those words convinced Scottish Borders Council that one of the financial casualties in Premier's stable - New Earth Recycling & Renewables [Infrastructure] PLC or NERR - could fund the all singing, all dancing treatment facility planned for Easter Langlee, Galashiels.
Investigative work by Not Just Sheep & Rugby staff has shown NERR never had the resources to bankroll the project which was terminated jointly by the Council and contractors New Earth Solutions Group (NESG) in February 2015.
And NERR finally succumbed to financial meltdown in July of this year when joint liquidators were appointed to oversee an organisation with debts/liabilities of at least £113 million. Warnings have already been issued that investors will get nothing back once the mess is sorted out and liquidators Deloitte are paid for their work.
But new information obtained via Freedom of Information shows it had been stated as early as 2013 that the funding from NERR for Easter Langlee was no longer available meaning the ill-fated venture had no funder of last resort from that time.
However, it is claimed it was not in the Council's best interests to pull out of the contract within the first year "as this would have financially cost the authority millions of pounds". Involvement with the now bankrupt NESG did cost Borders council taxpayers £2.4 million while failure to deliver the Galashiels facility is said to have cost New Earth twice that figure. It is unlikely the public will ever know the true scale of either side's losses.
The 'death' of Premier's worthless NERR fund, which brought in generous fees for the company's top brass, has been quickly followed by the collapse of three other funds. Yet as of today this 'bust' threesome is still being promoted on that Premier Group website as opportunities to invest cash.
An Extraordinary General Meeting [EGM] of the so-called Premier Diversified Property Fund was arranged for September 26th to pass a motion to wind up the company voluntarily and to appoint a liquidator. The last published accounts for this particular operation showed losses of £13.6 million for the sterling sub-fund, E2.295 million for the Euro sub-fund and $1.231 million for the dollar sub-fund.
There was a similar fate awaiting the Premier Portfolio Fund PLC. An EGM was fixed for October 19th to wind the company up voluntarily with the appointment of a liquidator. The fund experienced a loss of £8.5 million in the year to June 2013 with a further loss of £531,000 in the twelve months to October 2014.
The latest financial casualty under the Premier umbrella is the Premier Eco Resources Fund in which shareholders were invited to take a stake in bamboo forests in faraway central America and South Africa.
Following desperate moves to save this outfit a notice has been published with details of an EGM on December 19th to consider a proposal to voluntarily wind up the fund "as the company cannot by reason of its liabilities continue in business". As of December 2014 the Eco Resources company had liabilities totalling £51.3 million, up from £36.9 million the previous year.
Investors have been told that an inspector is to be appointed by the Isle of Man authorities in a bid to investigate the circumstances surrounding the collapse of this Premier entity. Reports may also flow from the liquidation of the NERR fund while administrators continue to work at NESG.
We ask yet again: What was the nature of enquiries made by Scottish Borders Council before deciding in 2010/11 to sign a contract with NESG, and become linked to its offshore funding partner NERR and the controlling Premier Group?
The offshore fund managers who were supposed to come up with the cash for a £21 million waste treatment centre to serve the Scottish Borders have announced that for the fourth time in less than six months one of their collection of investment companies is to be wound up and liquidated.
Premier Group (Isle of Man) Ltd.'s website carries the upbeat banner headline "intelligent and innovative investment ideas". Perhaps those words convinced Scottish Borders Council that one of the financial casualties in Premier's stable - New Earth Recycling & Renewables [Infrastructure] PLC or NERR - could fund the all singing, all dancing treatment facility planned for Easter Langlee, Galashiels.
Investigative work by Not Just Sheep & Rugby staff has shown NERR never had the resources to bankroll the project which was terminated jointly by the Council and contractors New Earth Solutions Group (NESG) in February 2015.
And NERR finally succumbed to financial meltdown in July of this year when joint liquidators were appointed to oversee an organisation with debts/liabilities of at least £113 million. Warnings have already been issued that investors will get nothing back once the mess is sorted out and liquidators Deloitte are paid for their work.
But new information obtained via Freedom of Information shows it had been stated as early as 2013 that the funding from NERR for Easter Langlee was no longer available meaning the ill-fated venture had no funder of last resort from that time.
However, it is claimed it was not in the Council's best interests to pull out of the contract within the first year "as this would have financially cost the authority millions of pounds". Involvement with the now bankrupt NESG did cost Borders council taxpayers £2.4 million while failure to deliver the Galashiels facility is said to have cost New Earth twice that figure. It is unlikely the public will ever know the true scale of either side's losses.
The 'death' of Premier's worthless NERR fund, which brought in generous fees for the company's top brass, has been quickly followed by the collapse of three other funds. Yet as of today this 'bust' threesome is still being promoted on that Premier Group website as opportunities to invest cash.
An Extraordinary General Meeting [EGM] of the so-called Premier Diversified Property Fund was arranged for September 26th to pass a motion to wind up the company voluntarily and to appoint a liquidator. The last published accounts for this particular operation showed losses of £13.6 million for the sterling sub-fund, E2.295 million for the Euro sub-fund and $1.231 million for the dollar sub-fund.
There was a similar fate awaiting the Premier Portfolio Fund PLC. An EGM was fixed for October 19th to wind the company up voluntarily with the appointment of a liquidator. The fund experienced a loss of £8.5 million in the year to June 2013 with a further loss of £531,000 in the twelve months to October 2014.
The latest financial casualty under the Premier umbrella is the Premier Eco Resources Fund in which shareholders were invited to take a stake in bamboo forests in faraway central America and South Africa.
Following desperate moves to save this outfit a notice has been published with details of an EGM on December 19th to consider a proposal to voluntarily wind up the fund "as the company cannot by reason of its liabilities continue in business". As of December 2014 the Eco Resources company had liabilities totalling £51.3 million, up from £36.9 million the previous year.
Investors have been told that an inspector is to be appointed by the Isle of Man authorities in a bid to investigate the circumstances surrounding the collapse of this Premier entity. Reports may also flow from the liquidation of the NERR fund while administrators continue to work at NESG.
We ask yet again: What was the nature of enquiries made by Scottish Borders Council before deciding in 2010/11 to sign a contract with NESG, and become linked to its offshore funding partner NERR and the controlling Premier Group?
Tuesday, 29 November 2016
Borders waste treatment fiasco: post mortem (part two)
by DOUG COLLIE
A large delegation of councillors and senior local government officials from the Scottish Borders spent almost £4,000 of public money on a fact finding jaunt to the wrong south of England waste treatment plant, according to new information released via a Freedom of Information request.
The party made the trip to the New Earth Solutions Group's (NES) "pioneering" Avonmouth facility, near Bristol in October 2014, and returned impressed and convinced the plant would act as a blueprint for a £21 million project at Easter Langlee, Galashiels.
But just four months after the tour, including an overnight stay at an upmarket city hotel, the deal between council and contractors NES collapsed in disarray after it was confirmed the Avonmouth technology was not fit for purpose while the company could not secure funding for the project. Subsequently the 'misfiring' Avonmouth facility was offloaded by NES for no monetary consideration...so much for due diligence by the Borders party during an inspection which failed to produce a single written report or minute.
Extracts from a confidential account of a "lessons learnt" workshop, held in the Edinburgh law firm Brodies' office in April 2015, reveal a range of negative issues linked to the contract over its four-year life span. Brodies had been commissioned by the council to provide "expert" legal advice, and had collected fees totalling £679,000 by the time the entire venture was abandoned at a cost of £2.4 million to Borders taxpayers.
But large tracts of the information held in the document remain covered up after SBC was allowed to redact entire sections deemed outwith the scope of the FOI request. It means all the negative bullet points which flowed from a year long contract moratorium which SBC granted NES are blacked out while a section headed RISKS THAT REMAIN OPEN AT END OF PROJECT has been 100% censored. So much for FREEDOM of information!
But we are told the much vaunted members' visit should have been to the NES centre at Canford, in Dorset, 110 miles from Avonmouth. The report states - perhaps incredibly - "The visit was to demonstrate how a site worked. However Avonmouth did not show this in balance; instead it was being over positive". So who arranged the trip in the first place?
The loss of more than £2 million of public money is dealt with like this: "SBC occurred £2 million loss up to termination. However SBC did not incur the cost of NES losses etc. which could have amounted to double. The fact this was written off in reserves does mean there will not be any effect on services to customers: it will be business as usual".
There appears to have been a complete lack of concern that such a significant sum was squandered thanks to decisions taken by bungling councillors on recommendations made by ineffective or ill informed officers and advisers.
And how the entire costly debacle, complete with the list of issues outlined in our coverage of the "lessons learnt" documents managed to acquire a clean bill of health from external auditors appointed by Audit Scotland is surely beyond belief.
The report says the deal offered by NES was a market leader at the time. But one attendee at the 2015 workshop - the identity of the participants has been protected - queried whether the project team had been "blinded" by the deal on the table.
According to the document: "The reply to this would be no this was not the case. In hindsight the team could have requested more detailed modelling. However, time was against us. In hindsight the more appropriate course would have been to go down the route of a different contract structure such as DBOM (Design Build Operate Maintain)".
The Borders project was to have been financed by the Isle of Man-based New Earth Recycling & Renewables [NERR] infrastructure fund, which is now in the hands of liquidators Deloitte with no prospect of recovery for shareholders and investors.
The workshop was told that in late 2013 it was made clear the funding from NERR was no longer available, so there was now no funder of last resort.
An evaluation of the 12-month moratorium, which only delayed the inevitable cancellation of the deal, concludes "It was difficult to admit the project was going to fail especially after all the hours spent, plus the project also had a high profile. It was a brave decision to terminate, but there was the risk that come 2020 the council could still have been left with nothing.
"The lesson learnt is around good project management, that careful thought had been given and analysed, and the timescale appreciated that if the contract was not terminated the risks of continuing delivery failure would be too high."
And the report adds: "Robustness of process during the termination reduced the risk of a claim from NES. Currently (April 2015) two months have passed without a claim: however they have up to five years".
The party made the trip to the New Earth Solutions Group's (NES) "pioneering" Avonmouth facility, near Bristol in October 2014, and returned impressed and convinced the plant would act as a blueprint for a £21 million project at Easter Langlee, Galashiels.
But just four months after the tour, including an overnight stay at an upmarket city hotel, the deal between council and contractors NES collapsed in disarray after it was confirmed the Avonmouth technology was not fit for purpose while the company could not secure funding for the project. Subsequently the 'misfiring' Avonmouth facility was offloaded by NES for no monetary consideration...so much for due diligence by the Borders party during an inspection which failed to produce a single written report or minute.
Extracts from a confidential account of a "lessons learnt" workshop, held in the Edinburgh law firm Brodies' office in April 2015, reveal a range of negative issues linked to the contract over its four-year life span. Brodies had been commissioned by the council to provide "expert" legal advice, and had collected fees totalling £679,000 by the time the entire venture was abandoned at a cost of £2.4 million to Borders taxpayers.
But large tracts of the information held in the document remain covered up after SBC was allowed to redact entire sections deemed outwith the scope of the FOI request. It means all the negative bullet points which flowed from a year long contract moratorium which SBC granted NES are blacked out while a section headed RISKS THAT REMAIN OPEN AT END OF PROJECT has been 100% censored. So much for FREEDOM of information!
But we are told the much vaunted members' visit should have been to the NES centre at Canford, in Dorset, 110 miles from Avonmouth. The report states - perhaps incredibly - "The visit was to demonstrate how a site worked. However Avonmouth did not show this in balance; instead it was being over positive". So who arranged the trip in the first place?
The loss of more than £2 million of public money is dealt with like this: "SBC occurred £2 million loss up to termination. However SBC did not incur the cost of NES losses etc. which could have amounted to double. The fact this was written off in reserves does mean there will not be any effect on services to customers: it will be business as usual".
There appears to have been a complete lack of concern that such a significant sum was squandered thanks to decisions taken by bungling councillors on recommendations made by ineffective or ill informed officers and advisers.
And how the entire costly debacle, complete with the list of issues outlined in our coverage of the "lessons learnt" documents managed to acquire a clean bill of health from external auditors appointed by Audit Scotland is surely beyond belief.
The report says the deal offered by NES was a market leader at the time. But one attendee at the 2015 workshop - the identity of the participants has been protected - queried whether the project team had been "blinded" by the deal on the table.
According to the document: "The reply to this would be no this was not the case. In hindsight the team could have requested more detailed modelling. However, time was against us. In hindsight the more appropriate course would have been to go down the route of a different contract structure such as DBOM (Design Build Operate Maintain)".
The Borders project was to have been financed by the Isle of Man-based New Earth Recycling & Renewables [NERR] infrastructure fund, which is now in the hands of liquidators Deloitte with no prospect of recovery for shareholders and investors.
The workshop was told that in late 2013 it was made clear the funding from NERR was no longer available, so there was now no funder of last resort.
An evaluation of the 12-month moratorium, which only delayed the inevitable cancellation of the deal, concludes "It was difficult to admit the project was going to fail especially after all the hours spent, plus the project also had a high profile. It was a brave decision to terminate, but there was the risk that come 2020 the council could still have been left with nothing.
"The lesson learnt is around good project management, that careful thought had been given and analysed, and the timescale appreciated that if the contract was not terminated the risks of continuing delivery failure would be too high."
And the report adds: "Robustness of process during the termination reduced the risk of a claim from NES. Currently (April 2015) two months have passed without a claim: however they have up to five years".
Monday, 28 November 2016
Borders waste treatment fiasco: 'post mortem' (part one)
EWAN LAMB reports
Two heavily censored documents containing the findings of separate "lessons learnt" workshops during and after Scottish Borders Council's disastrous £80 million waste treatment contract with penniless New Earth Solutions Group have been released in response to a Freedom of Information request.
The local authority attempted to keep the damaging material under wraps. But following a ruling by the Scottish Information Commissioner six weeks ago, SBC has provided redacted copies of the requested reports.
Generous applications of black ink to obliterate entire passages and even parts of sentences make the reports from 2011 and 2015 difficult to comprehend. But there is enough evidence in the untouched sections to show a catalogue of issues during the six-year duration of the ill-fated and costly relationship between council and contractor.
In part one of our coverage of the reports we will deal with the September 27th 2011 workshop which tackled "lessons learnt" from the procurement of the never-to-be-built £21 million waste treatment project at Easter Langlee, Galashiels. The non-project was to cost Borders taxpayers £2.4 million, a sum written off in cavalier fashion as the second part of the story will show.
The identities of those officers who participated in the workshops have been kept secret so all contributions to the debate are from anonymous individuals.
For example, at the beginning of the 2011 document "(black square to hide name) highlighted that lessons learnt can be positive and the officers who were involved in other large projects brought good experience to the project". Another speaker agreed there had been a positive change when officers were brought into the project. Readers can only speculate as to the role of officials prior to their involvement.
In an apparently worrying revelation we are told: "The group agreed that one of the main problems at the start seemed to be that the project board consisted wholly of external agency staff and due to the level of seniority of the membership (Acting Director of Technical Services, Acting Head of Environment) it was difficult to challenge the decision making process".
Yet at the end of the day these 'outsiders' had picked up hundreds of thousands of pounds in fees - paid for by local council taxpayers - and even though the project was a complete failure they presumably knew what they were doing.
According to the 'post mortem' report this structure generated a number of issues:
*Lack of operational understanding of the council's needs.
*Conflict of interests.
*No project ownership.
*No responsibility for project consequences.
*Officers were kept at arms length and were not given...(rest of sentence redacted).
To the layman this probably sounds like a recipe for the disaster which developed over the lifetime of the contract as New Earth Solutions had neither the technology nor the funding to deliver the vital piece of Borders infrastructure.
A team member claimed there had been no consistence in the terms and conditions that the agency and consultants were commissioned under. The report adds: "As the frameworks are now in place, it will help overcome these issues, but importantly the appropriate informed officers need to write a robust brief to ensure the consultants deliver what you actually require
"-- indicated that it was important to get project support in place to free up the project manager to make better use of his time, unfortunately it took at least nine months for this to happen".
Then, another list of specific issues are laid out.
*No profiling of capital budget. Progress was not reported to the appropriate council committees.
*The PM (project manager) allowed consultants to write their own briefs.
*The consultant did not identify that a remediation strategy was required for the site. This was a risk that sat with the council.
*Bonus contract for consultants. There are other alternatives.
*No insurance expertise within the team, which was a crucial element when officers became involved.
*No realistic programme in place.
*No business case development.
Surely this damning evidence begs the question "Where were the Borders elected members who were supposed to be in charge of the project? Did any of them even bother to raise questions with consultants or officials? It seems they were content to take a back seat and abdicate responsibility.
COMING NEXT...
How a Scottish Borders Council delegation was taken on an expensive two-day site visit to the WRONG "over positive"New Earth Solutions facility 110 miles from the plant they should have toured!
Thursday, 10 November 2016
Borders council's "bankers" under investigation
by DOUGLAS SHEPHERD
The offshore business chosen by Scottish Borders councillors to bankroll a £21 million waste management project is now the subject of an investigation by financial regulators after the collapse of a second investment fund controlled by the company.
News of the probe into the affairs of the Premier Group (Isle of Man) Eco Resources Fund is contained in a letter to shareholders which can be read on the Channel Islands Stock Exchange website. As we reported in recent days the Fund invited deposits of cash in a venture involving several bamboo plantations in Central America and South Africa.
The fate of the Eco Resources Fund - efforts to attract new investors appears to have failed - follows the demise of Premier's New Earth Recycling & Renewables [Infrastructure] Fund (NERR) which is now in the hands of liquidators Deloutte with reports being submitted to the Isle of Man courts.
Although Premier Group's directors received millions of pounds in management and promotion fees for running the two funds, hundreds of investors seem unlikely to get any of their money back.
Scottish Borders Council clearly believed NERR could finance a much needed waste processing plant at Easter Langlee, Galashiels. But in fact cash from NERR's coffers was being used to prop up council contractors New Earth Solutions [NES] which is now in administration with millions of pounds of debt.
While NES and NERR provided the council with a string of excuses for delays to the waste management project, the local authority was squandering at least £2.4 million of public money, mainly on expensive lawyers and consultants. Eventually the entire deal was abandoned when it became clear NES and NERR could neither fund the project nor provide the necessary technology.
The latest debacle involving the problems facing the "bamboo" fund have been emerging in recent weeks, a short time after the NERR fund's liquidation.
The latest missive from Premier Group director Jamie Sutton begins: "Over the last few weeks I have spoken to a number of you, discussing the lack of liquidity affecting the Fund and the urgent need for further investment in order to continue."
No doubt readers can guess what follows. Mr Sutton continues: "Although several of you gave serious consideration to committing additional money, regrettably no firm commitments were forthcoming. As a result, the Fund board has been left with no option other than to commence the process to put the Fund into liquidation.
"You will receive formal notices about the liquidation process next week and a date will be set, most likely in early December, for the meeting to put the Fund into liquidation".
More than 3,200 investors in NERR are caught up in the liquidation of that particularly entity, and no doubt hundreds if not thousands more will be hit by this latest Premier Group financial disaster.
Mr Sutton tells the bamboo punters: "Throughout the recent past, the Board has been in regular contact with the Isle of Man Financial Supervision Authority (FSA). Today we were informed by the FSA that they have made an application to the High Court in the Isle of Man for the appointment of an inspector to fully investigate the background and events leading to the current situation".
According to the letter, the Board welcomes the appointment of the inspector and will be co-operating fully with him with regard to the investigation.
Mr Sutton then invites potential investors to get involved in "confidential discussions" in a bid to keep the Fund's subsidiary ERF Ltd. outside the liquidation process. The future of ERF and its ability to progress the plantations is entirely reliant on new funding from new investment, he warns.
The circular concludes: "The Board very much regrets this outcome for the Fund's investors and other stakeholders. However, despite concerted efforts for a considerable period of time, it has not been possible to resolve the liquidity situation and secure a future for the Fund".
It is believed some $36 million was invested in the Eco Fund which paid $3 million in fees to Premier Group and its associates in recent times.
Meanwhile Deloitte's have promised further updates on the liquidation of the NERR fund which had around £59 million invested in NES, including ownership via a solitary £1 share of New Earth Solutions (Scottish Borders) Ltd, the business specially set up in 2011 to deliver the Easter Langlee project.
Thursday, 3 November 2016
Risky technology means bankruptcies and broken promises
by DOUG COLLIE
The risky and untried gasification and pyrolysis technologies which Borders councillors sanctioned for a failed waste treatment project are synonymous with bankruptcies and broken promises, according to evidence assembled by a national network which campaigns against incineration of refuse.
A damning briefing note from the United Kingdom Without Incineration Network [UKWIN] includes a section dedicated to the now defunct New Earth Solutions Group whose management presided over several failed schemes linked to their useless so-called NEAT technology.
According to UKWIN, investigations and Freedom of Information revelations following the collapse of Scottish Borders Council's multi-million pound contract with New Earth make it clear the local authority should never have relied on the company's unproven gasification system to treat the region's waste.
The briefing note says: "The failed Easter Langlee gasification project cost Scottish Borders Council at least £2.4 million with nothing to show for it".
UKWIN's document entitled GASIFICATION FAILURES IN THE UK: BANKRUPTCIES AND ABANDONMENT catalogues a whole list of failed projects throughout the length and breadth of the country. The money wasted by public bodies and private companies must run into many billions of pounds.
In the case of New Earth Solutions, Easter Langlee was just one of four abandoned gasification projects, the others had been planned for Merseyside, Dorset and Kent. And yet elected members on Scottish Borders Council were convinced the misfiring, incompetent system would make them the leading waste management authority in Scotland, devoting millions of pounds of public money to a spectacular failure.
By June 2016 New Earth Group had entered administration with huge debts and no prospect of repayment. Within a matter of weeks the closely linked offshore investment fund - New Earth Recycling & Renewables [Infrastructure] PLC - which was supposed to finance the £21 million Borders venture, plunged into liquidation.
UKWIN is an organisation with around 100 campaign groups opposed to waste incineration. The network has built up a detailed overview of the gasification and pyrolysis sector with intimate and detailed knowledge of numerous incineration proposals and waste companies.
Shlomo
Dowen, National Coordinator of UKWIN, commented: “Promoters of gasification and
pyrolysis schemes often cite existing and past projects to bolster support for
their new proposals, but don’t like to mention that those other projects were
actually embarrassing failures.
"Gasification and pyrolysis is an expensive
misstep when it comes to waste management, because even if someone ever manages
to get the ill-fated technology to work it would still have all of the problems
of more conventional waste incineration. As with all forms of incineration,
these technologies would result in shocking levels of CO2 being released and
would rely upon destroying valuable material that should be recycled, composted
or re-used”.
UKWIN argues that because companies do not like to talk about their failures it is often hard to find out what went wrong. They cite the Air Products debacle on Tees-side which is said to have cost the company $1 billion before that brand of so-called Advanced Thermal Technology was abandoned.
The full briefing note can be read on UKWIN's website at:
Tuesday, 1 November 2016
Will bamboo join NERR on financial scrapheap?
EWAN LAMB reports
A second 'eco-friendly' fund run by the Premier Group Isle of Man stable is facing oblivion only weeks after shareholders in their recycling and renewables investment facility learned there was no chance of recovering millions of pounds in the wake of liquidators being appointed.
Premier Group is the offshore outfit which was supposed to fund Scottish Borders Council's £21 million waste treatment facility on the outskirts of Galashiels until the local authority's deal with 'specialists' New Earth Solutions Group unravelled and was binned in February 2015.
Unfortunately Borders councillors seemed blissfully unaware for more than four years that the New Earth Recycling & Renewables Infrastructure PLC (NERR) was incapable of funding the project. The elected members presided over the loss of at least £2.4 million of taxpayers' money before abandoning the deal and the strategy on which it was based.
Much of the money raked in by NERR's directors from investors was being used to provide loans to the equally incompetent New Earth Solutions Group which could not deliver the technology needed to build the Easter Langlee plant. When the loans could not be repaid to NERR and other lenders NES Group was forced into receivership earlier this year.
Now it has emerged that Premier's Eco Resources Fund which allowed investors to risk large wads of money in bamboo plantations in Nicaragua and South Africa had until yesterday (Monday October 31st) to raise substantial amounts of extra finance otherwise it too could face the prospect of liquidation.
The Halloween deadline must have been particularly scary for investors worldwide who may lose their cash before the bamboo is harvested.
Last year Not Just Sheep & Rugby revealed the $36 million Eco Resources Fund handed over almost $3 million in fees to the fund's directors in their capacity as managers and promoters.
Those payments were made against a gloomy financial background outlined in the Fund's annual accounts. The report revealed there had been a "disappointingly high" level of redemption requests from investors, and the directors had closed the fund to redemptions until the liquidity position improved, possibly by 2017. In the meantime a further $15 million would be required to guarantee success.
There has been a series of circulars to investors in recent months, the most recent issued in October. According to Jamie Sutton, a director of Premier Group, attempts to secure a new lending facility was proving "very difficult" and was nowhere near conclusion.
He wrote: "The risk to the Fund is that this lending facility will not conclude or that it will not conclude in a timescale that is satisfactory for the Fund. The directors are now exploring options to raise new capital from shareholders."
Mr Sutton warned that as a minimum, $500,000 in cash had to be secured by the end of October. A previous missive, sent out on October 5th claimed the Fund was looking to raise up to $30 million in additional investment to repay the lenders who put up the money for the plantation costs and to fund future expenses before the bamboo crops produced a profit.
However, the latest letter from Mr Sutton concludes: "Should loan negotiations not be successful or should new investment not be committed then a board meeting has been set for 1st November 2016. If nothing changes from the current situation, it is therefore likely the directors will seek approval from the Management Shareholder to wind up the Fund and appoint a liquidator".
As previously disclosed in these columns the Management Shareholder in this case, and in the case of the now liquidated NERR Fund is Premier Distribution Inc., registered in the tax haven of British Virgin Islands, based in the offices of law firm Mossack Fonseca, and featured in the 'Panama Papers' files available on the internet.
Sunday, 16 October 2016
Contractor demanded money from Borders council
DOUG COLLIE reports
Scottish Borders Council has been instructed to release more 'confidential' material linked to its disastrous waste management contract with penniless New Earth Solutions Group following a six-month investigation by Scotland's Information Commissioner.
And the Decision Notice from Commissioner Rosemary Agnew reveals for the first time that New Earth's management requested an unspecified sum of money from SBC at some point during the four year partnership which cost taxpayers millions of pounds.
However, no doubt the council will be greatly relieved that details of how much cash was demanded, the reasons for the request, and whether the money was handed over, are to remain secret for now after they maintained in their submission to Ms Agnew that the sum should not be disclosed even though their former contractors have since crashed out of business with huge unpaid debts.
SBC had also refused to provide details of the lessons learned from the waste management fiasco in response to a Freedom of Information request. Now some of the documentation assembled from the "post-mortem" must be provided by November 28th after Ms Agnew ruled the council had wrongly withheld information.
But so far as the NES cash demand is concerned, the Commissioner's decision notice states: "The Commissioner is satisfied that the information is not required in order to understand any of the lessons learned by the council, and she finds that its disclosure is not required in the public interest".
The FOI request asked for: "Information contained in Council documents, reports, emails and other written correspondence detailing the ‘lessons learned’ from the Council’s unfortunate experience with a contractor who could not deliver either the technology or the funding for the region’s vital modern waste facility at Easter Langlee”.
After refusing the request the council had to supply all of the relevant information to the SIC. But SBC claimed there was no written report detailing the lessons learned. These would be taken forward by staff to be incorporated in future projects.
Ms Agnew's report includes the following reasons given by SBC for keeping the lessons learned information under wraps.
"The Council maintained that, having considered the matter repeatedly, the public interest in withholding the information was so significant that it outweighed the disclosure of the information in this case. The purpose of a “lessons learned” workshop is to ensure that a project can be properly and thoroughly scrutinised with honesty and objectivity. It argued that the most full and frank disclosure and discussion will always take place in circumstances where those participating in that conversation are free to speak honestly, safe in the knowledge that the information will be used for its proper purpose and will not find itself placed in a public environment.
"The Council submitted that there is a significant public interest in ensuring that where projects have been completed (whether successfully or otherwise), this conversation is able to take place and the fullest rewards of such a conversation are able to be achieved. This way, a public authority can ensure that it is best placed to critically review its own actions, and the public can be assured that such conversations take place. The Council submitted that the public interest in a local body being able to critically review its own actions is substantial, and this interest will be significantly weakened if the content of these conversations find their way directly into the public domain."
Ms Agnew acknowledged it was important that authorities were not deterred from reviewing their actions and decisions (especially in situations which have not had a positive outcome), in order that the knowledge and experience gained from past projects can be utilised in future projects. The Commissioner considered it was in the public interest for authorities to be able to continually improve their performance in order to increase their efficiency.
However, the FOI requester had indicated he did not require the names of Council officers, where they appeared in the withheld information. The Commissioner considered that if staff names were not disclosed, then it was far less likely that staff would be inhibited from fully engaging in a similar process in the future.
In her ruling Ms Agnew goes on to state: "the Commissioner notes that there is information in section 1.3 of Annex 1 which does not embody formal “lessons” gained from the workshops, but describes the personal reflections and experiences of the staff involved. These comments cannot be seen as organisational learning, but more accurately reflect frank discussions between officers about their own experiences at various times during the project.
"Its disclosure would not be in the public interest: it would not add to public understanding of the Council’s assessment of its overall performance, as the discussions focus on individual experiences. In addition, the Commissioner considers that disclosure of this kind of information may well lead to the harm anticipated by the Council, as officers may not wish to contribute their thoughts so freely in future if they consider that personal reflections and discussions which do not relate to an organisational learning point may be disclosed, even with their names redacted."
But she also writes: " With regard to the remaining content of Annex 1 and Annex 2, the Commissioner notes that both contain organisational “lessons” from the Council’s handling of the NES project.
"The Commissioner considers that disclosure of these “lessons” are in the public interest, as they indicate that the Council has evaluated its handling of the NES project and they demonstrate how this evaluation will be used to improve the management of future waste treatment contracts. The Commissioner notes that the cancellation of the NES contract led to the Council “writing off” several million pounds of tax payers’ money, and, in the circumstances, she considers that disclosure of the lessons learned during this process is in the public interest.
"The Commissioner finds that the public interest in disclosure outweighs the public interest in maintaining the exception and withholding the information. Accordingly, she finds that the Council was not entitled to withhold the information under consideration. She now requires the Council to disclose parts of Annex 1 and 2. The Commissioner will provide the Council with marked up copies of Annex 1 and 2 to indicate what information is to be disclosed."
Scottish Borders Council has been instructed to release more 'confidential' material linked to its disastrous waste management contract with penniless New Earth Solutions Group following a six-month investigation by Scotland's Information Commissioner.
And the Decision Notice from Commissioner Rosemary Agnew reveals for the first time that New Earth's management requested an unspecified sum of money from SBC at some point during the four year partnership which cost taxpayers millions of pounds.
However, no doubt the council will be greatly relieved that details of how much cash was demanded, the reasons for the request, and whether the money was handed over, are to remain secret for now after they maintained in their submission to Ms Agnew that the sum should not be disclosed even though their former contractors have since crashed out of business with huge unpaid debts.
SBC had also refused to provide details of the lessons learned from the waste management fiasco in response to a Freedom of Information request. Now some of the documentation assembled from the "post-mortem" must be provided by November 28th after Ms Agnew ruled the council had wrongly withheld information.
But so far as the NES cash demand is concerned, the Commissioner's decision notice states: "The Commissioner is satisfied that the information is not required in order to understand any of the lessons learned by the council, and she finds that its disclosure is not required in the public interest".
The FOI request asked for: "Information contained in Council documents, reports, emails and other written correspondence detailing the ‘lessons learned’ from the Council’s unfortunate experience with a contractor who could not deliver either the technology or the funding for the region’s vital modern waste facility at Easter Langlee”.
After refusing the request the council had to supply all of the relevant information to the SIC. But SBC claimed there was no written report detailing the lessons learned. These would be taken forward by staff to be incorporated in future projects.
Ms Agnew's report includes the following reasons given by SBC for keeping the lessons learned information under wraps.
"The Council maintained that, having considered the matter repeatedly, the public interest in withholding the information was so significant that it outweighed the disclosure of the information in this case. The purpose of a “lessons learned” workshop is to ensure that a project can be properly and thoroughly scrutinised with honesty and objectivity. It argued that the most full and frank disclosure and discussion will always take place in circumstances where those participating in that conversation are free to speak honestly, safe in the knowledge that the information will be used for its proper purpose and will not find itself placed in a public environment.
"The Council submitted that there is a significant public interest in ensuring that where projects have been completed (whether successfully or otherwise), this conversation is able to take place and the fullest rewards of such a conversation are able to be achieved. This way, a public authority can ensure that it is best placed to critically review its own actions, and the public can be assured that such conversations take place. The Council submitted that the public interest in a local body being able to critically review its own actions is substantial, and this interest will be significantly weakened if the content of these conversations find their way directly into the public domain."
Ms Agnew acknowledged it was important that authorities were not deterred from reviewing their actions and decisions (especially in situations which have not had a positive outcome), in order that the knowledge and experience gained from past projects can be utilised in future projects. The Commissioner considered it was in the public interest for authorities to be able to continually improve their performance in order to increase their efficiency.
However, the FOI requester had indicated he did not require the names of Council officers, where they appeared in the withheld information. The Commissioner considered that if staff names were not disclosed, then it was far less likely that staff would be inhibited from fully engaging in a similar process in the future.
In her ruling Ms Agnew goes on to state: "the Commissioner notes that there is information in section 1.3 of Annex 1 which does not embody formal “lessons” gained from the workshops, but describes the personal reflections and experiences of the staff involved. These comments cannot be seen as organisational learning, but more accurately reflect frank discussions between officers about their own experiences at various times during the project.
"Its disclosure would not be in the public interest: it would not add to public understanding of the Council’s assessment of its overall performance, as the discussions focus on individual experiences. In addition, the Commissioner considers that disclosure of this kind of information may well lead to the harm anticipated by the Council, as officers may not wish to contribute their thoughts so freely in future if they consider that personal reflections and discussions which do not relate to an organisational learning point may be disclosed, even with their names redacted."
But she also writes: " With regard to the remaining content of Annex 1 and Annex 2, the Commissioner notes that both contain organisational “lessons” from the Council’s handling of the NES project.
"The Commissioner considers that disclosure of these “lessons” are in the public interest, as they indicate that the Council has evaluated its handling of the NES project and they demonstrate how this evaluation will be used to improve the management of future waste treatment contracts. The Commissioner notes that the cancellation of the NES contract led to the Council “writing off” several million pounds of tax payers’ money, and, in the circumstances, she considers that disclosure of the lessons learned during this process is in the public interest.
"The Commissioner finds that the public interest in disclosure outweighs the public interest in maintaining the exception and withholding the information. Accordingly, she finds that the Council was not entitled to withhold the information under consideration. She now requires the Council to disclose parts of Annex 1 and 2. The Commissioner will provide the Council with marked up copies of Annex 1 and 2 to indicate what information is to be disclosed."
Sunday, 9 October 2016
Future of Scott's Abbotsford now seems secure
by DOUGLAS SHEPHERD
Only a decade ago one of the best known stately homes in the Scottish Borders faced an uncertain future following the death of novelist Sir Walter Scott's last direct descendant.
But now the fortunes of Abbotsford House where Scott penned many of his best known works appear to have been completely transformed following a £12 million regeneration project funded by national agencies, and the reopening of the Borders Railway which is already bringing hundreds of extra paying customers to the imposing house on the banks of the Tweed.
The latest set of accounts for The Abbotsford Trust, tasked with looking after Abbotsford since the death of Dame Jean Maxwell Scott shows that for the second year running 40,000 individuals paid to go round the house and garden in 2015, almost double the numbers in some of the years before the ambitious renewal scheme began.
And according to the Trustees an estimated additional 30,000 visited the free exhibition and wider estate. The annual report says: "This was helped considerably by the opening of the Borders Railway on September 9th 2015 and associated national publicity by VisitScotland, Scotrail and Scottish Borders Council".
In 2014 the Trust reported a large overall surplus of £791,000. The impressive financial performance was repeated in 2015 with a recorded surplus of £784,000.
The Trust's subsidiary The Abbotsford Trading Company, which operates the Abbotsford gift shop, lettings, weddings and corporate events also achieved a profit of £16,873, "thereby continuing the trend of improvement, and beginning to show some positive return on the Trustees' investments".
In a section of the report headed Future Plans, the Trust writes: "The Trustees seek to improve and adjust the visitor experience, notably in the garden and grounds (which could not be achieved in the main capital project) as well as seeking to maximise the opportunities from the reopening of the Borders Railway.The Trustees believe there is now a firm foundation of visitor numbers to build on".
Many of the visitors from around the world who flock to Abbotsford come to view the outstanding collection of heritage assets housed there. These include statues, paintings and valuable historical artefacts collected by Scott during his lifetime.
The 2015 report reveals there was an important addition to the collection last year. This was a harp which originally belonged to Scott's daughter Anne, and was purchased following a donation received for the purpose.
Anne Scott (1803-1833) took charge of the Abbotsford household after her elder sister married. Anne, reportedly afflicted by a weak constitution, cared for her mother who died in 1826, and is said to have been profoundly affected by her father's passing in 1832.
The accounts put the market value of Abbotsford and its environs at £3.845 million. But the report acknowledges: "Due to the historical connection it is likely the property could realise significantly more than this if it were to be sold on the open market".
Monday, 26 September 2016
Council just one of 3,253 losers after offshore fund's collapse
by DOUG COLLIE
A total of 3,252 investors who placed their money and their trust in a now bankrupt investment fund have joined Scottish Borders Council as victims of the Premier New Earth Recycling & Renewables [Infrastructure] PLC or NERR's liquidation.
The sheer scale of the financial losses now facing the fund's creditors - SBC is not a creditor but managed to lose £2.4 million of public money as a result of NERR's failure to finance a £21 million waste treatment facility at Galashiels - have been laid bare following a major investigation by Sunday Times journalist Ali Hussain.
In an article which was published on the front page of the paper's Money section at the weekend, the story of how a couple lost more than £350,000 of their life savings after they were advised to invest in NERR makes disturbing and sickening reading.
David and Sheila Solomon, from Cornwall, have been left with just £3,000 from their respective pension pots although the Financial Ombudsman Service has instructed the company which advised them to make good the sum of £497,000. So far, according to the Sunday Times, they have not received a penny of the compensation due to them.
As Not Just Sheep & Rugby has reported on numerous occasions, the Solomons' were just two of many investors who were persuaded to put their money in NERR, a fund managed by Premier Group (Isle of Man) but ultimately controlled by a Premier Group offshoot in British Virgin Islands.
The worthless fund was earmarked to provide the millions needed by its business partner New Earth Solutions Group (NESG) to deliver a state-of-the-art waste processing centre on the Easter Langlee landfill site. But the council was fed different excuses during a four year liaison with NESG and NERR before finally binning the £80 million contract in February 2015.
The protracted dealings with SBC proved fruitful for the bosses at Premier Isle of Man. A liquidators' report shows they took many millions in management and promotion fees while NERR was failing its investors and clients, including the Borders local authority.
Deloitte, the NERR liquidators told the Sunday Times: "There appears to be little prospect of any meaningful recovery from the fund's investments", revealing that there are 3,252 registered investors in NERR.
Their money was loaned by NERR to the debt-ridden NESG which staged its own dramatic financial collapse a few days before NERR went belly up. Scores of creditors owed millions by New Earth Solutions will also have to whistle for their cash. The two-pronged debacle has left many small businesses struggling while a significant number of individuals have complained about the advice they were given to the financial Ombudsman.
The promotion of funds like NERR which was an Unregulated Collective Investment Scheme (UCIS) was outlawed in 2013 near to the time when NERR was suspended by its managers, a move which meant money could not be recovered from the fund's coffers.
In a second distressing case covered in the Sunday Times story, the financial adviser who brought heartache and misery to Mr. and Mrs. Solomons - MFS Partnership - also told an 82-year-old woman to invest £99,000 of her £125,000 savings in NERR. The lady has subsequently died, but the Ombudsman found in her family's favour.
According to the article. lawyers for MFS have warned that if the Solomons demanded their full payment immediately it would make the Partnership insolvent. But MFS insisted it had every attention of paying the couple the Ombudsman's award contained in a ruling which was issued six months ago. He described NERR as "high risk".
Correspondence seen by the newspaper shows concern was being expressed as far back as 2011 over the advice provided to the couple based on documentation related to the fund. That was also the year in which SBC signed the contract with NESG and its funder.
Saturday, 24 September 2016
Borders council's shocking environmental record continues
EXCLUSIVE by EWAN LAMB
Greenhouse gas emissions from Scottish Borders Council's landfill site reached their highest levels for seven years in 2015 while the authority's recycling performance remained close to the bottom of Scotland's waste treatment league table at a pathetic 37.3%, nine percentage points below the national average.
Statistics newly released by the Scottish Environment Protection Agency (SEPA) reveal an 11 per cent increase in methane gas being emitted from the Easter Langlee site where 30,355 tonnes or 60.9% of the region's household waste was landfilled last year.
The figure for methane was recorded at 403,000 kg, a staggering 40 times above the reporting threshold of 10,000 kg. It is the highest total for methane since 2009 and compares with the 2014 level of 361,000 kg.
Much of the rest of Scotland may be meeting their greenhouse gases reduction targets. But there is no sign that is happening in the Borders where environmental issues appear to be given a low priority.
The picture is equally concerning when it comes to deadly chlorofluorocarbons [CFCs] and hydrochlorofluorocarbons [HCFCs] produced at the Easter Langlee site. In both cases the totals emitted in 2015 were the highest for several years.
The reporting threshold for CFCs and HCFCs is 1 kg per annum. The CFCs logged at the Borders treatment centre added up to 34 kg in 2015, well up on the 31.1 kg recorded in 2014. The figures for the previous two years were 27.5 kg (2013) and 32.8 kg (2012).
HCFC emissions increased by an alarming 44% in the space of 12 months, up from 23.9 kg in 2014 to 34.6 kg last year. The 2015 return was also considerably higher than in 2013 (26.5 kg) and 2012 (28.3 kg).
Waste data returns, also published on SEPA's website do not show Scottish Borders in a good light. Just 18,600 of the 49,848 tonnes of household rubbish generated were recycled. And a paltry 892 tonnes (1.8%) were diverted from landfill.
The 37.3% recycled represents a marginal improvement from 36.7% in 2014 when 49,952 tonnes of waste were collected and 30,666 were landfilled. Only 940 tonnes (1.9%) were diverted from landfill.
Not Just Sheep & Rugby looked at the statistics for SBC's immediate local government neighbours to see how they performed in 2015.
Dumfries & Galloway generated 74,092 tonnes of waste, landfilled 21,767 tonnes (29.4%), recycled 20,091 tonnes (27.1%) but diverted the remaining 32,235 tonnes (43.5%) from landfill.
East Lothian generated 50,906 tonnes of waste, landfilled 22,526 tonnes (44.2%), recycled 26,163 tonnes (51.4%) and diverted 2,217 tonnes (4.4%) from landfill.
Midlothian generated 42,076 tonnes of waste, landfilled 14,227 tonnes (33.8%), recycled 20,136 tonnes (47.9%) and diverted 7,714 tonnes (18.3%) from landfill.
And yet the Borders' appalling record could have been very different had the council managed to provide its population with a modern treatment facility at Easter Langlee instead of becoming involved in their disastrous partnership with New Earth Solutions Group between 2011 and 2015,
The original intention was to develop a conventional processing centre which would have diverted at least 80 per cent of waste from landfill. Had the plant been completed on time in 2013 then those disgraceful emission levels would probably have been decreasing in line with the rest of the country.
Instead elected members sanctioned a contract variation which they thought would bring them glory as the leading waste disposal authority in Scotland. But the (not so) advanced thermal technology let them down badly while the (now liquidated) funding company could not come up with the £21 million needed to build the Galashiels facility.
The contract was abandoned in disarray, and just to compound matters the same set of councillors also voted to scrap garden waste collections - the only authority in Scotland to do so.
Those awful statistics on recycling, landfilling and greenhouse gas emissions are a direct result of that flawed decision making. But there seems to be little or no pressure from Government agencies on SBC to turn around its dreadful record of recent years.
Sunday, 18 September 2016
30-year "war" over the king of fish
by DOUG COLLIE
A war of words between the "landed gentry" who own the world renowned salmon fishing beats on the River Tweed and a dwindling band of fishermen in North-east England accused of intercepting tens of thousands of fish heading for Scottish rivers looks set to continue for at least another six years.
The Atlantic salmon in question may be 'wild' but the riparian owners of those lucrative angling waters continue to pile pressure on the UK Government to speed up the complete removal of drift net licences and beach netting on the Northumberland, Durham and Yorkshire coasts.
For their part the working fishermen of the north-east claim the angling proprietors are motivated by pure greed, and that there is no scientific argument for the demise of their 'traditional' methods of catching salmon and sea trout which have been a way of life for countless decades.
Publication of the number of salmon caught by the English drift nets and the T & J or fixed engine beach nets has prompted renewed calls for an end to both methods of fishing ahead of the planned 'death' of drift netting in 2022 and the phasing out of the beach nets.
A blog written by one Tweed proprietor describes as "staggering" the 15,989 salmon taken by the north east coast fisheries in 2015. And yet the total is only a fraction of the 50,849 caught in 1988 or the average figure of 56,000 between 1970 and 1976. At that time there were close to 200 drift net licences compared to the dozen or so which survive into 2016.
According to a 1982 Fisheries Research report compiled by researchers 94% of the salmon intercepted off north-east England may have been returning to Scottish waters. The angling proprietors have been involved in a relentless campaign ever since to rid the seas of drift nets and, according to the netsmen, to have total access to every wild salmon in the North Sea.
The Tweed Beats blogger writes: "These 15,989 salmon (almost all killed) are caught by just 12 drift nets and 49 T & J nets at a time when the east coast Scottish rivers, which produce most of these fish, had another very poor year in 2015, if not quite as bad as 2014. By contrast, Tweed rods caught 8,091 salmon in 2015 and killed just 1,651 of those caught.
"One imagines there is not a salmon angler in the land who does not want to see the end of the last remaining major interceptory net fishery around the coast of Great Britain and Ireland. The drift nets are being phased out already, but it needs to be quicker, and the T & J nets, also to predate on mixed stocks need to go to."
The netters may have taken 15,989 salmon last year, but their hauls in some previous seasons were much less impressive with totals lower than the numbers caught on Tweed. In 2012 the catch was 7,318 with only 5,395 taken in 2009, 5,241 in 2008 and 7,091 in 2007.
The National Federation of Fishermen's Associations [NFFA] continue to fight drift netting's corner. In a letter to Fishing News, Ned Clark, chairman of the Association's North-east Committee wrote: "There is something uniquely mean-spirited and vindictive about the campaign by one of the richest power blocks in the country to extinguish the small-scale net fishery for salmon and trout in the north east of England.
"This issue, although cloaked in spurious conservation arguments, has always been about the resentment of recreational anglers and riparian owners towards the small share pf the catch taken by the traditional nets. No expense has been spared to hire ex-DEFRA and Marine Scotland civil servants to advise and front the lobbying campaign.
In December 2012 Fisheries Minister Richard Benyon announced the closure of the drift net fishery in 2022 with the T & J nets to be gradually phased out. The NFFa claimed the move was to placate the "landed/riparian lobby" following 30 years of continuous pressure.
The drift net fishery has been in the process of being phased out since 1992 when John Selwyn Gummer, another Government minister, decided drift net licences should be surrendered when the holder retired rather than passing them on to the next generation. Many licencees accepted offers to buy them out after the angling proprietors and the Government set up a £1.5 million fund for the purpose.
Saturday, 10 September 2016
"Cutting edge" technology issues just wouldn't go away
DOUG COLLIE concludes our three-part expose of a not so NEAT technology
The Scottish Environment Protection Agency [SEPA] was still not prepared to issue a vital certificate to allow the planned £21 million refuse disposal facility for Scottish Borders Council to operate more than two years after elected members decided to incorporate the energy from waste technology in the project.
Failure to deliver the brand of gasification and pyrolysis which was supposed to transform tens of thousands of tonnes of household waste into heat and power resulted in the council and their contractors New Earth Solutions Group (NES) abandoning their 24-year deal, a move which cost the partners many millions of pounds. Millions more will now have to be spent on an alternative strategy to deal with Borders waste.
As we have reported previously, council external auditors KPMG have maintained the New Earth Advanced Thermal [NEAT] technology was "not core" to the £80 million deal originally signed off by SBC in 2011. Council taxpayers who were stung to the tune of £2.4 million by the failure of the venture may find the auditors' conclusions both bizarre and puzzling.
SEPA was certainly in no doubt in October 2014 that the Renewable Energy Facility proposed for Easter Langlee was not ready to receive its crucial Pollution Prevention and Control [PPC] permit. The agency listed a number of outstanding issues in an email to New Earth Solutions which has been made available under Freedom of Information.
A year before the message was written the company was suggesting pressure should be brought to bear on SEPA by Government agencies and by SBC in a bid to have the technological problems ignored so that the PPC variation could be issued.
The October 2014 email from SEPA is mainly of a technical nature. But it contains a suggestion that NES might consider withdrawing the REF part of their application and then submit a new request once the outstanding issues linked to the pyrogas/engines were dealt with.
New Earth are told: "We are of the opinion that the information provided to date does not provide adequate demonstration that either the gases have been purified so they are no longer a waste prior to their incineration, or that they can cause emissions no higher than those resulting from burning natural gas.
"This means that at the present time we are unable to progress the determination of the REF part of the application for substantial variation based on the current design."
Not Just Sheep & Rugby believes some of the technical matters outlined in the note are worthy of publication, and no doubt there will be readers with a sufficient grasp of the sciences to interpret SEPA's narrative.
For example: "Pyrogas H2S, organohalogens (especially vinyl chloride) and chromium levels exceed the thresholds for natural gas referenced in the Environment Agency Syngas Briefing Note. The level of HCN and other species e.g. benzene and acetaldehyde in the Environment Report."
And another passage states: "Little/no data has been provided for total Sulphur, xylenes, ammonia, HCI, HF which are covered in the quality protocol for biomethane injection, or physical parameters, all of which were requested in Q9e of the Schedule 7 Notice.
"There is little detail of breakdown mechanisms/predicted removal rate of different pollutants during syngas purification in your response to Q8 and details of reactions involving NaOCI have not been provided."
SEPA goes on to say the variable nature of the Refuse Derived Fuel (RDF) feed-stock means the pyrogas is also likely to change in composition over time. SEPA needs confidence that any End of Waste (EOW)/Chapter IV exemption with an associated spec for purified pyrogas would be achievable on an ongoing basis - it is considered that further information and data is required to prove this.
There are additional paragraphs dealing with other yet-to-be-resolved issues, but the information set out above provides ample evidence that the technology was proving to be a major stumbling block in delivering the Easter Langlee facility.
Only NES, who firmly believed the PPC variation should have been issued months earlier, and later on KPMG in their "investigation" into how SBC dealt with the contract were convinced respectively that technical issues and the NEAT technological system were of little or no importance to the overall success of the project.
The Scottish Environment Protection Agency [SEPA] was still not prepared to issue a vital certificate to allow the planned £21 million refuse disposal facility for Scottish Borders Council to operate more than two years after elected members decided to incorporate the energy from waste technology in the project.
Failure to deliver the brand of gasification and pyrolysis which was supposed to transform tens of thousands of tonnes of household waste into heat and power resulted in the council and their contractors New Earth Solutions Group (NES) abandoning their 24-year deal, a move which cost the partners many millions of pounds. Millions more will now have to be spent on an alternative strategy to deal with Borders waste.
As we have reported previously, council external auditors KPMG have maintained the New Earth Advanced Thermal [NEAT] technology was "not core" to the £80 million deal originally signed off by SBC in 2011. Council taxpayers who were stung to the tune of £2.4 million by the failure of the venture may find the auditors' conclusions both bizarre and puzzling.
SEPA was certainly in no doubt in October 2014 that the Renewable Energy Facility proposed for Easter Langlee was not ready to receive its crucial Pollution Prevention and Control [PPC] permit. The agency listed a number of outstanding issues in an email to New Earth Solutions which has been made available under Freedom of Information.
A year before the message was written the company was suggesting pressure should be brought to bear on SEPA by Government agencies and by SBC in a bid to have the technological problems ignored so that the PPC variation could be issued.
The October 2014 email from SEPA is mainly of a technical nature. But it contains a suggestion that NES might consider withdrawing the REF part of their application and then submit a new request once the outstanding issues linked to the pyrogas/engines were dealt with.
New Earth are told: "We are of the opinion that the information provided to date does not provide adequate demonstration that either the gases have been purified so they are no longer a waste prior to their incineration, or that they can cause emissions no higher than those resulting from burning natural gas.
"This means that at the present time we are unable to progress the determination of the REF part of the application for substantial variation based on the current design."
Not Just Sheep & Rugby believes some of the technical matters outlined in the note are worthy of publication, and no doubt there will be readers with a sufficient grasp of the sciences to interpret SEPA's narrative.
For example: "Pyrogas H2S, organohalogens (especially vinyl chloride) and chromium levels exceed the thresholds for natural gas referenced in the Environment Agency Syngas Briefing Note. The level of HCN and other species e.g. benzene and acetaldehyde in the Environment Report."
And another passage states: "Little/no data has been provided for total Sulphur, xylenes, ammonia, HCI, HF which are covered in the quality protocol for biomethane injection, or physical parameters, all of which were requested in Q9e of the Schedule 7 Notice.
"There is little detail of breakdown mechanisms/predicted removal rate of different pollutants during syngas purification in your response to Q8 and details of reactions involving NaOCI have not been provided."
SEPA goes on to say the variable nature of the Refuse Derived Fuel (RDF) feed-stock means the pyrogas is also likely to change in composition over time. SEPA needs confidence that any End of Waste (EOW)/Chapter IV exemption with an associated spec for purified pyrogas would be achievable on an ongoing basis - it is considered that further information and data is required to prove this.
There are additional paragraphs dealing with other yet-to-be-resolved issues, but the information set out above provides ample evidence that the technology was proving to be a major stumbling block in delivering the Easter Langlee facility.
Only NES, who firmly believed the PPC variation should have been issued months earlier, and later on KPMG in their "investigation" into how SBC dealt with the contract were convinced respectively that technical issues and the NEAT technological system were of little or no importance to the overall success of the project.
Tuesday, 6 September 2016
Mystery deepens around 'irrelevant' technology
DOUGLAS SHEPHERD presents part two of our latest waste contract trilogy
The 'advanced' thermal technology, dismissed as irrelevant by external auditors who scrutinised Scottish Borders Council's disastrous waste management contract in 2015 following losses of £2.4 million enjoyed a much more elevated status when councillors sanctioned the system in 2012, according to a report which was never meant for publication.
As we reported last week, accountants KPMG who audited the local authority's books concluded their investigations into the collapse of the £80 million contract with New Earth Solutions by stating: "The technology which has subsequently not been able to be implemented was not core to the initial agreement with NES. The basis of award was not reliant upon delivery of the technology".
Such a conclusion might cause some to wonder how the planned £21 million facility at Easter Langlee for treating 40,000 tonnes of municipal rubbish annually could have worked if the so-called New Earth Advanced Technology (NEAT) "was not core" to the project.
But the NEAT system, which turned out to be useless and had still not been certified by the Scottish Environment Protection Agency [SEPA] by early 2015, certainly featured in the private report to councillors which persuaded them to include it in a contract variation in October 2012.
The report states specifically: "The proposed facility will use two technologies to achieve the outcome of the project. The second element of technology to be delivered was a form of Energy from Waste technology specifically known as Advanced Thermal Conversion.
"The technology would ensure that the facility is self-sufficient in terms of energy consumption but would also export up to 3MW of electricity to the National Grid".
Council members were told: "Agree to sign the Deed of Variation (to include thermal technology). If this recommended option is chosen then the project will continue and deliver the previously agreed objectives (legislatively and financially) by delivering an integrated waste treatment facility for the service commencement date of March 2015".
In those circumstances it is difficult to understand how KPMG and their paymasters Audit Scotland were able to dismiss the technology as irrelevant when the entire project together with the 24-year contract went pear-shaped.
The subsequent financial collapse of the New Earth Group and the bankruptcy of the firm chosen to fund Easter Langlee, New Earth Recycling & Renewables [Infrastructure] PLC or NERR, simply compounds the mystery.
A newly published report from liquidators appointed to NERR earlier this year may also be of interest to Scotland's public finance watchdog, and to Scottish Borders Council. There are some alarming statistics within the 12-page document which confirms none of the investors who were naïve enough to place money in the offshore Fund will see a return.
As Not Just Sheep & Rugby reported some time ago, NERR was run from offices on the Isle of Man where directors of Premier Group were able to collect millions of pounds in fees over four years while SBC waited for the Easter Langlee funding to materialise. But it never did.
And as we also revealed, the NERR entity was ultimately controlled by Premier Group Distribution Inc., operating from Panamanian law firm Mossack Fonseca's office in the tax haven of British Virgin Islands.
According to the liquidators' report on NERR potential options for recovery of shareholders/ investors cash could include actions for misfeasance, fraudulent trading, or fraudulent disposal or concealment of assets.
The bottom line is that the NERR Fund on which delivery of the Borders' £21 million waste treatment facility relied is expected to yield just £465,000 for unsecured creditors before the costs of the liquidation process.
Many of the debts, including multi-million pound loans made to the soon to be dissolved New Earth Solutions Group, are irrecoverable.
Of course Scottish Borders Council's dealings with these bust organisations - the report shows NERR held a £1 million equity stake in New Earth Solutions (Scottish Borders) - and the subsequent write off of £2.4 million of public money do not warrant any kind of official investigation.
COMING NEXT: SEPA's issues with that useless technology
The 'advanced' thermal technology, dismissed as irrelevant by external auditors who scrutinised Scottish Borders Council's disastrous waste management contract in 2015 following losses of £2.4 million enjoyed a much more elevated status when councillors sanctioned the system in 2012, according to a report which was never meant for publication.
As we reported last week, accountants KPMG who audited the local authority's books concluded their investigations into the collapse of the £80 million contract with New Earth Solutions by stating: "The technology which has subsequently not been able to be implemented was not core to the initial agreement with NES. The basis of award was not reliant upon delivery of the technology".
Such a conclusion might cause some to wonder how the planned £21 million facility at Easter Langlee for treating 40,000 tonnes of municipal rubbish annually could have worked if the so-called New Earth Advanced Technology (NEAT) "was not core" to the project.
But the NEAT system, which turned out to be useless and had still not been certified by the Scottish Environment Protection Agency [SEPA] by early 2015, certainly featured in the private report to councillors which persuaded them to include it in a contract variation in October 2012.
The report states specifically: "The proposed facility will use two technologies to achieve the outcome of the project. The second element of technology to be delivered was a form of Energy from Waste technology specifically known as Advanced Thermal Conversion.
"The technology would ensure that the facility is self-sufficient in terms of energy consumption but would also export up to 3MW of electricity to the National Grid".
Council members were told: "Agree to sign the Deed of Variation (to include thermal technology). If this recommended option is chosen then the project will continue and deliver the previously agreed objectives (legislatively and financially) by delivering an integrated waste treatment facility for the service commencement date of March 2015".
In those circumstances it is difficult to understand how KPMG and their paymasters Audit Scotland were able to dismiss the technology as irrelevant when the entire project together with the 24-year contract went pear-shaped.
The subsequent financial collapse of the New Earth Group and the bankruptcy of the firm chosen to fund Easter Langlee, New Earth Recycling & Renewables [Infrastructure] PLC or NERR, simply compounds the mystery.
A newly published report from liquidators appointed to NERR earlier this year may also be of interest to Scotland's public finance watchdog, and to Scottish Borders Council. There are some alarming statistics within the 12-page document which confirms none of the investors who were naïve enough to place money in the offshore Fund will see a return.
As Not Just Sheep & Rugby reported some time ago, NERR was run from offices on the Isle of Man where directors of Premier Group were able to collect millions of pounds in fees over four years while SBC waited for the Easter Langlee funding to materialise. But it never did.
And as we also revealed, the NERR entity was ultimately controlled by Premier Group Distribution Inc., operating from Panamanian law firm Mossack Fonseca's office in the tax haven of British Virgin Islands.
According to the liquidators' report on NERR potential options for recovery of shareholders/ investors cash could include actions for misfeasance, fraudulent trading, or fraudulent disposal or concealment of assets.
The bottom line is that the NERR Fund on which delivery of the Borders' £21 million waste treatment facility relied is expected to yield just £465,000 for unsecured creditors before the costs of the liquidation process.
Many of the debts, including multi-million pound loans made to the soon to be dissolved New Earth Solutions Group, are irrecoverable.
Of course Scottish Borders Council's dealings with these bust organisations - the report shows NERR held a £1 million equity stake in New Earth Solutions (Scottish Borders) - and the subsequent write off of £2.4 million of public money do not warrant any kind of official investigation.
COMING NEXT: SEPA's issues with that useless technology
Friday, 2 September 2016
Financial shambles compounded by flawed technology
by EWAN LAMB
The external auditors who gave Scottish Borders Council a 'clean bill of health' in the wake of the waste management contract omnishambles despite the loss of at least £2.4 million of public money, concluded the award of the £80 million deal to New Earth Solutions Group (NES) was not reliant on delivery of the 'advanced' form of technology earmarked for the project..
According to accountancy specialists KPMG, the firm engaged by Audit Scotland to inspect SBC's books: "Appropriate options were considered and due diligence processes are evidenced as being followed." They even went on to add: "The technology which has subsequently not been able to be implemented was not core to the original agreement with NES".
Of course, none of that evidence from KPMG's work has been made public. The auditors even mention the decision taken by councillors in October 2012 to sanction a major variation of the contract to include the incineration element with its completely unproven NEAT pyrolysis.
It seems fairly obvious the proposed £21 million treatment facility at Easter Langlee on the outskirts of Galashiels foundered in chaos because the NEAT system to turn rubbish into electricity simply would not work. The joint press release issued by council and contractor announcing the death of their four year partnership said exactly that, citing technological issues alongside financial difficulties.
Perhaps KPMG, Audit Scotland, and even those involved directly in the unmitigated failure would like to study material recently released by the Scottish Environment Protection Agency [SEPA] under Freedom of Information (FOI) which has uncovered a range of unresolved issues still dogging the NEAT system TWO YEARS after SBC's elected representatives signed up for it.
The results of investigations published in these columns over the last 18 months have been largely about the squandering of public money on a project which the now defunct NES Group and its bankrupt offshore funders New Earth Renewables & Recycling [Infrastructure] PLC were incapable of developing.
But there are some equally disturbing unanswered questions regarding the technology which Borders councillors were convinced would make SBC the leading waste disposal authority in Scotland.
The inclusion of the thermal system necessitated an application to SEPA in 2013 for a major change to the Easter Langlee plant's Pollution Prevention and Control [PPC] permit before the facility could even be switched on.
But as we recently reported, other FOI requests revealed how after months of delay the NES Group suggested SBC together with Scottish Government agencies should bring pressure on SEPA to forget about the flaws in the NEAT system and grant the permit.
Around this time the Galashiels technical systems being tested by NES at their sister plants in Canford and Avonmouth were frequently misfiring. On occasions the machinery had to be shut down to avoid serious damage while mention is also made of equipment breakages and the need for adjustments by skilled engineers. That remained the position in October 2013.
A FOI request to SEPA asked whether the independent agency had been aware of the attempts by NES to pressurise them into approving the PPC for the Borders. SEPA denied any knowledge of this, but also released several files containing correspondence linked to the permit application.
One detailed email exchange between SEPA's experts and NES is dated October 8th 2014 - the week in which a 16-strong delegation from SBC travelled to Avonmouth on what was supposed to be a due diligence visit.
It should be borne in mind that the SEPA missive was written fully two years after the local authority voted to include NEAT syngas and pyrolysis at Easter Langlee.
Full details including technical analysis, from the message will be published here in the next few days. But perhaps this extract gives readers an idea of how far the applicants were of obtaining their much coveted permit:
"We [SEPA] are of the opinion that the information provided to date does not provide adequate demonstration that either the gases have been purified so they are no longer a waste prior to their incineration, or that they can cause emissions no higher than those resulting from burning natural gas. This means that at the present time we are unable to progress the determination of the Renewable Energy Facility part of the application for substantial variation based on the current design".
Presumably KPMG, Audit Scotland and members of SBC had all seen this negative critique before concluding "the technology (which has subsequently not been able to be implemented) was not core to the central agreement with NES". It is a conclusion which simply will not wash with many local council taxpayers.
Thursday, 25 August 2016
Day of reckoning for council and contractor
EXCLUSIVE by DOUGLAS SHEPHERD
Not so long ago they were touting themselves as one of the fastest growing companies in their field with bold predictions of floating the burgeoning business on the London Stock Exchange.
But behind the curtain of commercial spin Scottish Borders Council's favourite waste management Group had a combined financial deficit of more than £157 million when the entire Group crashed out of existence in June, according to two horrendous Statements of Affairs produced by New Earth Solutions' administrators.
But behind the curtain of commercial spin Scottish Borders Council's favourite waste management Group had a combined financial deficit of more than £157 million when the entire Group crashed out of existence in June, according to two horrendous Statements of Affairs produced by New Earth Solutions' administrators.
And research by Not Just Sheep & Rugby has shown the contractors awarded a huge £80 million deal by the Borders local authority in 2011 were carrying net debts of £27 million in 2010 (up from £19.7 million the previous year) even BEFORE the papers were signed.
So did financial experts commissioned at great cost by SBC, or paid officials at the council make that information available to elected members before they rubber-stamped an agreement which collapsed in chaos four years into the 24-year contract, and cost local taxpayers at least £2.4 million?
And were there regular reports on New Earth Solutions Group's (NESG) finances between 2011 and 2015 as the debt mountain increased? Over the same period the funders for a £21 million Advanced Thermal Technology (ATT) facility at Easter Langlee, Galashiels - Isle of Man-based New Earth Recycling & Renewables [Infrastructure] PLC (NERR) - was also experiencing serious financial difficulties which would lead to liquidation.
How many councillors asked pertinent and probing questions about the state of the NESG and NERR finances as progress on the Easter Langlee ground to a halt? And why was New Earth allowed a lengthy moratorium to sort out chronic technological problems associated with the system of so-called pyrolysis planned for the Borders?
The newly published Statements of Affairs for NESG and its subsidiary New Earth Solutions Facilities Management (NESFM) reveal just how debt-ridden the entire organisation had become when last desperate attempts to save the businesses were finally extinguished.What was left was sold for a pittance to a newly formed company called DM Opco which no-one in the waste management industry had even heard of prior to a swift deal with administrators Duff & Phelps just days after the New Earth collapse.
When NESG entered administration on June 9th 2016 estimated total assets for preferential creditors amounted to just £4.6 million.
But on the other side of the equation - liabilities - lay a list which included debts to NERR of £23.8 million, a shortfall of £4.2 million to a fixed charge holder and an estimated deficiency of assets after a floating charge of £24 million.
So far as non-preferential claims were concerned trade and expense creditors were owed £7.1 million, subsidiary NESFM - also in administration - was due £3.8 million and HM Revenue & Customs £843,000, bringing the unsecured claims to £11.2 million.
The report puts the estimated deficiency as regards all creditors at £35.36 million with issued and called up capital of £39.6 million. So NESG's total deficiency is stated to be £75.024 million.
A separate document dealing with NESFM's assets and liabilities reveals a shortfall to fixed charge holder Landesbank Girozentrale of £37.2 million with total assets available for preferential creditors of just £10.2 million.
The estimated deficiency of assets after floating charge was £66 million plus issued and called up capital of £16.4 million, giving an estimated total deficiency as regards members of £82.4 million.
The NESG and NESFM combined total deficiency is therefore £157.4 million.
As we have reported on previous occasions, the majority of the debts were already weighing down New Earth Group in October 2014 when a delegation of councillors and paid officials from SBC returned from a two-day 'due diligence' trip to NESG's facilities at Avonmouth, near Bristol, and expressed satisfaction with what they had been shown.
Borders council taxpayers were assured SBC was on the right lines with their waste management strategy, and the Easter Langlee plant remained deliverable. Four months later the deal was torn up with nothing to show for four years of dithering and delays.
The original contract between SBC and NESG was signed in March/April 2011. Our trawl through annual reports and sets of accounts produced by the New Earth group prior to those dates show that in June 2010 a financial return for the twelve months to January 31 2010 showed a trading loss of £7.548 million for the period, more than double the deficit of £3.324 million recorded in the previous year.
And at January 31 2010 NESG had net debts of £26.992 million, up from £19.747 million in 2009.
Despite these negative financial results it appears Borders councillors considered New Earth to be best placed to solve their pressing waste management issues as the Scottish Government clock ticked towards a ban on landfilling municipal rubbish.
As a direct result of the flawed decision taken in 2012 when SBC opted for a contract variation to incorporate a completely unproven version of energy recovery from waste the problems facing the local authority more than five years ago have still not been resolved.
In the past we have called for full disclosure of SBC's disastrous involvement with NESG including the release of all documents held on file by the local authority. The council has resisted, citing commercial confidentiality for the liberal censorship of reports, minutes and emails which would undoubtedly be of overwhelming public interest.
Publication of the Statements of Affairs outlined above surely means the case for full disclosure can no longer be denied, and an accompanying independent investigation should also be set in train. Watch this space, but don't hold your breath.
In the past we have called for full disclosure of SBC's disastrous involvement with NESG including the release of all documents held on file by the local authority. The council has resisted, citing commercial confidentiality for the liberal censorship of reports, minutes and emails which would undoubtedly be of overwhelming public interest.
Publication of the Statements of Affairs outlined above surely means the case for full disclosure can no longer be denied, and an accompanying independent investigation should also be set in train. Watch this space, but don't hold your breath.
Monday, 22 August 2016
Nominations for New Earth 'Hall of Shame'
by DOUG COLLIE
Yet the twin paths to financial disaster are littered with tributes from politicians, millions of pounds of grants to assist the lame duck Group with technological development and even the occasional "gong" handed over at so-called glittering award ceremonies. It is doubtful whether the unsecured creditors of NESG, between them owed around £9 million, will be very impressed with any of that.
First candidate for the Hall of Shame is the Coalition Government's Secretary of State for Business, Innovation & Skills Vince Cable who toured New Earth's Canford research and development facility in July 2012 to inspect the fledgling New Earth Advanced Thermal (NEAT) unit there.
After watching the system which was later installed in New Earth's Avonmouth treatment plant, Dr Cable declared: "It is very encouraging to see projects such as New Earth's renewable energy recovery plant being developed. The quality of innovation I have seen here -and the potential it offers UK plc - provides encouraging evidence that the entrepreneurial spirit we need to re-build our economy is thriving in this part of Dorset".
So how's that going now Dr. Cable? Well as we all know the Avonmouth power recovery business proved so troublesome and expensive it had to be "sold" to an Australian bank for nothing at all.
Another distinguished visitor to Canford a month later was Secretary of State for Communities and Local Government Eric Pickles accompanied by officers and members of Bournemouth Council. They too were told about the development work on the NEAT process although we could not establish whether Mr Pickles and his group were moved to wax lyrical about their hosts.
Perhaps The Carbon Trust should be afforded pride of place in our Hall of Shame. In 2010 New Earth Solutions was handed £4 million by the Trust from an £18 million fund set up by the UK Department of Energy and Climate Change. It was the first monetary award from the new fund.
A news release at the time told readers: "The company [New Earth] is looking to use gasification and pyrolysis (chemical change brought about by the action of heat) technologies to convert waste-derived fuel into electricity".
This was precisely the system approved by Borders councilors and which was to cost their constituents millions of pounds to hire expensive consultants, lawyers and other specialists who all trousered fat fees before the Easter Langlee venture collapsed in disarray with no-one accepting responsibility for the financial disaster.
Our final nomination (for now) goes to the organisers of the 2013 Regen South West Green Energy Awards. Regen SW, the renewables not-for-profit membership organisation presented New Earth with the award for "Best Renewable Energy Scheme" at a ceremony held in Bath.
The accolade went to the afore-mentioned Avonmouth energy recovery facility "which benefits from patented NEAT advanced thermal technology developed by New Earth". It was recognised by the judging panel as 'disruptive technology'. Depends what they meant by disruptive!
If anyone would like to add to the list of entrants named above then we'll be happy to hear from you and accommodate them if they pass the shame test. We know of a considerable number of financial advisers who persuaded investors to sink substantial sums - often including their hard-earned pension pots - in NERR, never to see a return.
A sizeable collection of distressing stories can be found on the Financial Services Ombudsman's website after unsuspecting clients were charged handsomely for completely worthless advice, and later found their wealth trapped in a suspended entity. Thankfully many of the complaints to the FSA were successful and the advisers were ordered to reimburse their 'victims' in full.
At the same time, as we've also reported here, the directors of the Premier Group Isle of Man, the outfit which controlled and managed NERR and a number of other investment vehicles, were raking in millions of pounds in management fees.
Our newly built Hall of Shame - the job was completed on time and under budget - is already becoming a bit overcrowded, but there's still room for a few more of your nominations.
A couple of former Government ministers, the apparently gullible Carbon Trust, and Regen South West have been nominated by Not Just Sheep & Rugby to join Scottish Borders councillors in a special Hall of Shame for those who thought New Earth Solutions Group [NESG] was a world beating waste treatment contractor.
With the bankrupt Group now in its death throes and about to be dissolved together with its equally useless "funder" New Earth Recycling & Renewables [Infrastructure] PLC or NERR we thought it might be interesting to determine whether Scottish Borders Council had been the only party to fall for the partnership's worthless sales patter.
As most readers will know by now council taxpayers who rely on SBC for their local government services were deprived of at least £2.4 million after elected members awarded NESG a £21 million deal to deliver a 'cutting edge' facility to treat the region's annual output of 40,000 tonnes of municipal rubbish.
The troubled contract had to be completely ditched in 2015 after the Dorset-based Group's inappropriately named NEAT technology finally exhausted the council's patience. The form of incineration had been a dud from day one yet local councillors were mightily impressed by what they were shown, and sealed the deal in advance of even the research and development stage being finalised.
Meanwhile the offshore NERR fund with its links to the tax haven of British Virgin Islands repeatedly told SBC their project at Easter Langlee would be the next NESG job to receive financial backing. Unfortunately, behind the scenes, NESG was piling up more than £150 million of debt and owed NERR over £100 million, forcing the Isle of Man fund managers to suspend operations.
NERR now has liquidators from accountants Deloitte in charge with a meeting of no doubt angry investors due to be held at the end of this month. Those who placed their cash in NERR have already been told they will not get their money back.
The troubled contract had to be completely ditched in 2015 after the Dorset-based Group's inappropriately named NEAT technology finally exhausted the council's patience. The form of incineration had been a dud from day one yet local councillors were mightily impressed by what they were shown, and sealed the deal in advance of even the research and development stage being finalised.
Meanwhile the offshore NERR fund with its links to the tax haven of British Virgin Islands repeatedly told SBC their project at Easter Langlee would be the next NESG job to receive financial backing. Unfortunately, behind the scenes, NESG was piling up more than £150 million of debt and owed NERR over £100 million, forcing the Isle of Man fund managers to suspend operations.
NERR now has liquidators from accountants Deloitte in charge with a meeting of no doubt angry investors due to be held at the end of this month. Those who placed their cash in NERR have already been told they will not get their money back.
Yet the twin paths to financial disaster are littered with tributes from politicians, millions of pounds of grants to assist the lame duck Group with technological development and even the occasional "gong" handed over at so-called glittering award ceremonies. It is doubtful whether the unsecured creditors of NESG, between them owed around £9 million, will be very impressed with any of that.
First candidate for the Hall of Shame is the Coalition Government's Secretary of State for Business, Innovation & Skills Vince Cable who toured New Earth's Canford research and development facility in July 2012 to inspect the fledgling New Earth Advanced Thermal (NEAT) unit there.
After watching the system which was later installed in New Earth's Avonmouth treatment plant, Dr Cable declared: "It is very encouraging to see projects such as New Earth's renewable energy recovery plant being developed. The quality of innovation I have seen here -and the potential it offers UK plc - provides encouraging evidence that the entrepreneurial spirit we need to re-build our economy is thriving in this part of Dorset".
So how's that going now Dr. Cable? Well as we all know the Avonmouth power recovery business proved so troublesome and expensive it had to be "sold" to an Australian bank for nothing at all.
Another distinguished visitor to Canford a month later was Secretary of State for Communities and Local Government Eric Pickles accompanied by officers and members of Bournemouth Council. They too were told about the development work on the NEAT process although we could not establish whether Mr Pickles and his group were moved to wax lyrical about their hosts.
Perhaps The Carbon Trust should be afforded pride of place in our Hall of Shame. In 2010 New Earth Solutions was handed £4 million by the Trust from an £18 million fund set up by the UK Department of Energy and Climate Change. It was the first monetary award from the new fund.
A news release at the time told readers: "The company [New Earth] is looking to use gasification and pyrolysis (chemical change brought about by the action of heat) technologies to convert waste-derived fuel into electricity".
This was precisely the system approved by Borders councilors and which was to cost their constituents millions of pounds to hire expensive consultants, lawyers and other specialists who all trousered fat fees before the Easter Langlee venture collapsed in disarray with no-one accepting responsibility for the financial disaster.
Our final nomination (for now) goes to the organisers of the 2013 Regen South West Green Energy Awards. Regen SW, the renewables not-for-profit membership organisation presented New Earth with the award for "Best Renewable Energy Scheme" at a ceremony held in Bath.
The accolade went to the afore-mentioned Avonmouth energy recovery facility "which benefits from patented NEAT advanced thermal technology developed by New Earth". It was recognised by the judging panel as 'disruptive technology'. Depends what they meant by disruptive!
If anyone would like to add to the list of entrants named above then we'll be happy to hear from you and accommodate them if they pass the shame test. We know of a considerable number of financial advisers who persuaded investors to sink substantial sums - often including their hard-earned pension pots - in NERR, never to see a return.
A sizeable collection of distressing stories can be found on the Financial Services Ombudsman's website after unsuspecting clients were charged handsomely for completely worthless advice, and later found their wealth trapped in a suspended entity. Thankfully many of the complaints to the FSA were successful and the advisers were ordered to reimburse their 'victims' in full.
At the same time, as we've also reported here, the directors of the Premier Group Isle of Man, the outfit which controlled and managed NERR and a number of other investment vehicles, were raking in millions of pounds in management fees.
Our newly built Hall of Shame - the job was completed on time and under budget - is already becoming a bit overcrowded, but there's still room for a few more of your nominations.
Subscribe to:
Posts (Atom)