The growing sense of frustration among members of Scottish Borders Council's £23 million waste treatment project team following the technological and funding problems encountered during 2013 can be revealed in detail for the first time thanks to the release of highly sensitive documents.
More than two years after the original 2011 deal with waste management contractors New Earth Solutions [NES] the money needed to build the "state of the art" gasification and pyrolysis facility at Easter Langlee, Galashiels had still not been sourced.
And as our series of articles on new material obtained under Freedom of Information shows the so-called NEAT Advanced Thermal Treatment (ATT) incineration system remained a long way from proving itself to be commercially viable despite receiving a green light from Borders councillors.
So far as funding was concerned everything seems to have depended on the successful re-financing of the NES treatment plant at Avonmouth, Bristol so that cash could be returned to NES's offshore investment partner, Isle of Man based New Earth Recycling & Renewables [NERR]. But as we have already reported the re-financing had hit snags and was threatening to derail Easter Langlee completely.
This link between Avonmouth re-financing and Galashiels was highlighted in an email from a senior official at SBC to NES in September 2013.
He wrote: "The (project) Risk Register gives a “1” (very low) risk rating to the possibility of NERR not having sufficient funds to meet the development costs of the project. Such a low risk rating does not seem to be supported by the evidence provided.
"NERR’s cash balances stood at £5.484 million on August 20th down from £7.968 million on July 19th – i.e. the gap between the cash funds at NERR’s disposal and the amount actually required to deliver the project (£23 million) has widened over the past month. NES refer to "gross subscriptions of £56.9 million in the last 10 months at a rate of £5.7 million per month", but make no reference to withdrawals from the fund, and hence the rate of net subscriptions, which is the relevant consideration with regard to funding availability for Easter Langlee.
"The conclusion would seem to be that the Avonmouth refinancing may be crucial to securing the finance for the Scottish Borders project."
Project Easter Langlee was faring no better on the technological front as yet another report demonstrates. Although aspects of the document are technically specific we have deliberately not edited the following passages so that a complete picture can be conveyed to readers.
"The trial was started with a feed rate of 30Hz, but the gas
pressure within the drum became unstable and the feed rate was reduced to 15Hz.
"Ceramic filter panel lost power due to heating element
shorting causing a protective trip to isolate the panel. At this point the plant was shut down
normally and safely without the cleaning elements operating for 2 minutes
whilst the trip was reset.
"The plant was re-started at 15Hz, this was stable and the
feed rate was increased to 17.5Hz. Despite the temperatures rising they were
still within acceptable limits. The feed rate was increased to 22.5Hz and allowed to
stabilize. At this feed rate the gas
pressure fluctuations in the pyrolysis drum were significant. The flare temperature was also noted to be
falling."
Not Just Sheep & Rugby has also decided to publish a commentary on the August/September 2013 technical hitches in full. It was prepared for SBC by a consultant.
It reads as follows:
"The crux of the matter is that the engines have so far not
operated at full capacity, and only time will tell if the engines can indeed
operate at 100%. The engine management
system is currently limiting output to 25%, achieving 100% output is a large
step up given the issues NES have previously faced.
"For example, the ARE (All Reasonable Endeavours) report
states the purpose of the 120hr run is to confirm the operation of the complete
system over a prolonged period of time. The system can currently be run and has
successfully been run on 3rd and 4th September 2013.
"However, NES acknowledge
that upon examining the data and physical results of the trials to date, areas
have been identified that require modification to enable successful long runs
to be completed. It should be noted that a specialist engineer from the engine
is not available until 1 October 2013 to make the required modifications. However, there does not appear to be any
mention of what this modification is or what it entails. Are NES in a position to confirm the modifications
will allow the engines to operate at 100% for 120 hours?"
So what were the potential implications of these latest setbacks at the company's research and development establishment in faraway Kent?
Another member of the project team pulled no punches when providing his assessment. He wrote:
"Potentially it leaves us in a limbo not knowing exactly
what the extent of any delay might be, and what the
operational implications are for the Easter Langlee landfill site or on what basis budgets from 2014/15 onwards should be
prepared – i.e. will the Council need to continue to landfill through to
mid-2016?
"On the facts as now known, it seems to me quite possible that the
technology development may delay commissioning and the start of operations from
June 2015 to June 2016; - this may not be a deal breaker, but to keep our own
principal properly informed we need to know.
"NES must come clean
with us regarding the exact nature of the technological issues that they are
seeking to overcome, and a realistic methodology and timetable to address them.
I just feel at the moment that we are suffering a little from the
"mushroom syndrome", with NES being somewhat disingenuous in seeking
to apportion blame for the delay to SEPA [Scottish Environment Protection Agency].
"This may be a defensive mechanism on
their part, to avoid the risk that we can refer to the legal provisions of the
contract to claim damages from them in the event of a significant delay. In
which case, a pragmatic way forward might be to assure them that this is not
our intention, provided that we are kept fully informed of what progress is
being made, and given a realistic date for the commencement and commissioning
of the ATT facility."
On this evidence the entire venture was in serious difficulty in September 2013. But the non-productive saga would be allowed to continue consuming public funds for another 17 months before contract termination.
NEXT: THE BLAME GAME AND SOME DEVASTATING NEWS
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