EXCLUSIVE by DOUGLAS SHEPHERD
The dissolution of the insolvent New Earth Solutions Group - the waste management contractor hand-picked by councillors in the Scottish Borders for a "ground-breaking" treatment project - may herald the end of a dark chapter in the area's local government history.
A decision by the Group's administrators Duff & Phelps to end their involvement with NESG has been published on the Companies House website, indicating it is intended to conclude the administration by way of dissolution.
New Earth's debt mountain together with their failure to deliver the urgently needed £23 million treatment facility for Scottish Borders at Galashiels is probably how the bankrupt firm will be best remembered.
But the role of elected members on Scottish Borders Council in a scandal which saw £2.4 million of taxpayers' money squandered (mainly on expensive consultants) for absolutely no return will not be forgotten either.
Their decision to sanction a completely unproven brand of technology, and to rely on an offshore investment fund - New Earth Recycling & Renewables (NERR) - to come up with the cash for the scheme proved catastrophic.
Unfortunately no-one will be held to account thanks to the lack of interest in the debacle by Audit Scotland, the public spending watchdog which allowed SBC to write off their losses without offering a public statement outlining the factors behind their mismanagement of public funds..
The Final Progress Report to NESG creditors outlines the various debts owed by the Group which appears to have been insolvent long before Borders council pulled the plug on a 24-year contract.
Even the Co-op Bank, a secured creditor owed £41.8 million, has not been reimbursed in full because of "insufficient realisation" to pay.
And although NESG and NERR were inter-linked, the contractors owed the Isle of Man-based fund £39 million at the time of the administration process being instigated for quasi-equity funding. The report states: "There is no prospect of any distribution being made to NERR under its security".
Dozens of unsecured creditors who were owed a total of £9.1 million have received payments equating to 1.5 pence in the pound.
Duff & Phelps' fees for the administration total more than a quarter of a million pounds. In the case of NESG the administrators will be paid £194,740 (748 hours at an average hourly rate of £260). And the fees for New Earth Solutions Facilities Management, which ran the operational treatment plants amount to £90,455 (302 hours at an average of £299.
Duff & Phelps say: "The joint administrators consider they are now in a position to conclude the administration and cease to act. It is intended to exit the administration by way of dissolution."
The insolvency experts have filed a report to the UK Government regarding the conduct of the directors of NESG in the three years prior to administration, but the contents of that report remain confidential.
The end of NESG follows the news earlier this week that Premier Group (Isle of Man) which ran the NERR fund and is also in the process of being liquidated had had its licence to practice revoked by the Manx financial services watchdog for breaches of regulations and failure to pay money due to the authority for the licence.