Thursday, 15 June 2017

Council assured waste project was "viable and fundable"

EWAN LAMB dissects the contents of SBC contractor's 'commercially sensitive' letter

A top secret letter sent to Scottish Borders Council by waste management contractors New Earth Solutions confirmed a planned treatment facility to serve the region remained viable and fundable without an accompanying thermal treatment system being available from the outset of the project..

But despite this seemingly cast iron assurance in February 2011 that a so-called Mechanical Biological Treatment (MBT) plant could be constructed and delivered on its own, the pledge was rendered worthless less than a year later when New Earth claimed a stand alone MBT without a thermal conversion capability could not secure bank funding.

A copy of the five page letter from NES outlining contingency plans should the Advanced Thermal Treatment (ATT) facility fail to materialise has been made public via Freedom of Information requests which were refused by the local authority, but upheld by the Scottish Information Commissioner.

Each page of the document is marked Confidential and Commercially Sensitive. It explains what would happen to the Solid Recovered Fuel (SRF) produced during the treatment processes at the Easter Langlee MBT centre, and discusses the various impacts which could affect New Earth Solutions (Scottish Borders) Ltd., the special vehicle set up to progress the Borders project.

Plans were in place for NES and SBC to share on a 50-50 basis any additional costs or benefits if the SRF had to be transported and treated by a third party outwith the Scottish Borders.

This so-called risk-share mechanism was to come into play if planning permission and/or a permit for the ATT were unsatisfactory or these consents were refused or if it proved technically or commercially not viable to deliver the ATT at Easter Langlee.

SBC had asked the contractor what the implications would be if the ATT was not technically or commercially viable. Ironically, the NES brand of technology remained incomplete and not fit for purpose four years after the letter was written. The ATT failure resulted in the contract being ditched with SBC forced to write off at least £2.4 million of taxpayers' money.

But back in 2011 NES wrote: "The proposed ATT facility supports the landfill diversion capability of the MBT, produces electricity to power the facility and generates revenues from the production and sale of renewable energy. The revenues generated are used to fund the capital and operational costs of the ATT. Without these revenues the ATT facility would not be viable".

However, if the ATT facility was not developed then the MBT would be re-configured to ensure the landfill diversion targets could still be met.

The letter continues: "NES would wish to point out that its future growth within the UK waste management market is based on incorporating on-site energy recovery within its MBT technology in new and existing waste treatment facilities.

"This means that over the course of the project, NES intends to develop an on-site energy recovery facility and thus, any use of a third party SRF off-take is likely to be on a short term basis or if, for unforeseen circumstances, the energy recovery facility is unavailable for short periods of time".

Then the council is told: "The project remains viable and fundable without the on-site ATT being available from the outset. At the point when an on-site energy recovery facility is ready to be developed, funding will be secured from the project funders i.e. New Earth Recycling & Renewables Infrastructure Plc (NERR).

Under the terms of the original contract the ATT could be delivered up to seven years after the MBT to allow the technology to be fully tried and tested. Both NES and NERR are now insolvent with mountainous unpaid debts.

The letter  explains that under the contingency plans for the Easter Langlee SRF, the fuel could be moved out of the Borders to one of many outlets. New Earth had recently agreed a deal with a major SRF user in Holland - The Van Gansewinkel Group - and material from the Borders could be hauled by road to Grangemouth before being shipped to The Netherlands.

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