Suddenly Tories are the "borrowing party"

by EWAN LAMB

Conservative-led Scottish Borders Council may have inadvertently set the mood for Philip Hammond's budget by embarking on a borrowing spree which will increase local government debt in the region by in excess of £15 million in 2017/18, equivalent to more than £280,000 a week.

However, this complete turnaround in fiscal policy in the face of Tory declarations stressing 'we must get the deficit down' has not even merited a mention in Borders local newspapers even though the details were published in full in the council's mid-year Treasury Management Report.

The latest hike in borrowing will push SBC's outstanding debt to a figure well above the council's annual revenue budget. The report revealed: "Additional borrowing amounting to £10 million has been undertaken in April 2017. Further borrowing of £5.2 million is anticipated during the remainder of the year".

All of that against a backdrop of £6 million additional grant from the (SNP) Scottish Government and the prospect of the much trumpeted South-east City Deal which is already turning out to be far less attractive for the Borders than the spin doctors would have us believe.

So much for the battle cries of those at the top of the Tory Party since 2010 that "we must not leave higher burdens of debt to our children and grandchildren". Labour were the bad guys who would bankrupt the nation by borrowing billions to fund public services, warned Theresa May and her Cabinet colleagues

In the Borders this greater reliance on borrowing means the council’s external debt which was already £265.4 million at the start of the current financial year (bigger than the annual revenue budget of £264.7 million) will now rise to £271.2 million.

Apparently the current approved (capital expenditure) budget at SBC is higher than the original budget due to "adverse timing movements from February 2017 to 31 March 2017 in areas of the capital plan".

According to the finance document: "The key drivers for the 2016/17 changes are assets and infrastructure - roads and transport infrastructure total additions to budget amount to £1.86 million.

"Also increases to the Land and Property Infrastructure projects total £0.63 million. The Other Corporate Services budget has increased by £2.85 million, principally from the inclusion of additional £2.64 million ICT Transformation budget.

"Children & Young People - School Estate budget increases amount to £3.32 million. The key increases in estimated expenditure result from a net timing movement relating to the construction of Broomlands (Kelso) and Duns Primary Schools.

"Economic Development - Additional budget as a timing movement between financial year amounting to £3.6 million relates to the Hawick Regeneration project".

The council's liabilities comprise long-term borrowing of £198.3 million plus £72.9 million of other outstanding debts. The level of debt has increased significantly over the last five years. The equivalent figures in 2010/11 were £164.8 million for long term borrowing plus £61.8 million for "other liabilities".

But at least the Tory group on SBC can claim to be in step with the party hierarchy. Following yesterday's UK budget in which Chancellor Hammond also embarked on a campaign to increase borrowing any hopes of balancing the nation's books have been dashed until at least 2031.

Unfortunately, in the Borders case, - given the current direction of travel - it could be several centuries before the debt is paid down, leaving generations of council taxpayers to pick up the tab for servicing those burgeoning external liabilities. Interest payments are currently running at more than £10 million a year.

Will Borders waste station find favour this time?

DOUG COLLIE on a council dilemma

Just six months after throwing out proposals for a multi-million pound waste transfer station (WTS) at Galashiels Borders councillors will be invited to backtrack and sanction virtually the same scheme when they meet next week.

Members of Scottish Borders Council planning committee turned down an application in April from local authority colleagues for the development of the storage facilities at Easter Langlee amid fears for road safety outlined in objections from local residents.

There were suggestions at the time that councillors were 'playing to the gallery' just a few weeks before municipal elections were held in May.

That decision threw SBC's waste management strategy into complete chaos given the looming deadline for the closure of landfill sites in Scotland. The WTS is required as a matter of urgency so that tens of thousands of tonnes of household refuse can be taken to Easter Langlee before it is transferred by road to treatment facilities elsewhere.

There are even more individual objections (eighteen) to the revised application which will be considered next Monday. But as before, senior planners at SBC are recommending approval even though they concede the serious shortcomings of the C77 road cannot be overcome.

Opponents have the backing of local ward councillor Harry Scott, and a nearby residents' association has also tabled a strong objection.

A 22-page report compiled by planning officer Carlos Clark outlines the pros and cons associated with the siting of the WTS at Easter Langlee.

The report says amenity impacts - according to protesters - include:

*The development will unfortunately prolong use of the site for waste treatment or disposal. Further consideration should be given to protecting the area for residential and other compatible uses. 

*Concerns are raised regarding impacts on existing residential properties, and potential for future houses.

*The development will prolong and may exacerbate noise, dust and smell concerns (including odours during construction); visual impacts, including trees and landscape issues; vehicle noise (including from more HGVs and from reversing vehicles); and air pollution. 

*The content and findings of a Transport Statement produced by the applicants are challenged, including factual accuracy, speed survey findings and proportion of commercial vehicles using the road. The report is considered to be one-sided in favour of the development being approved. 

The report adds: "There is no answer to the fact that the pinch point between Aislinn Cottage and No 2 Easter Langlee Cottages cannot be widened. This is the most dangerous point of a pedestrian’s journey where the road is not wide enough to accommodate a HGV and another vehicle passing each other, visibility is severely restricted, and verges are extremely narrow and overrun by HGVs. The transport statement confirms that a solution cannot be achieved.

 "Another blind bend creates a similar hazard further north. Proposed improvements were previously judged to be inadequate. There is no change in the improvement proposals that can overcome the intrinsic unsuitability of the C77." 

The report to councillors also states that all properties flanking the C77 have had vehicles enter their property through boundary fencing, one experiencing this twice. Vehicles have also come off the road and fallen into the valley adjacent the waste site. Photographs demonstrate instances of vehicles involved in accidents, including one showing a Council refuse lorry (though it is unclear if the lorry was involved in the accident).

Despite there being a 30 mph limit here, a traffic survey carried out on behalf of the Council indicated that, on a weekly average, a substantial number (47.1%) exceeded the speed limit, with excessive speeds ranging between 36.3 mph and 49 mph.

People and children (sometimes unsupervised) with or without dogs walk this road and walkers are increasingly using it. Six properties on this stretch have no other means of accessing a bus stop or post-box without walking on this road. The path through the industrial estate is steep, on an angle and has steps. Therefore, the only route for wheelchair users, those with restricted mobility and parents with pushchairs is to use the C77. There is no footway and the grass verge is non-existent.

Locals also warn: " A major accident, with possible fatalities, may occur and the development should be stopped before the inevitable occurs."

But according to Mr Clark: "The provision of the Waste Transfer Station will provide clear community benefit, particularly in allowing closure of the landfill site”.

The Transport Statement states that there would be 6 extra vehicle movements per day of which 5 would be articulated lorries, when compared with the existing traffic for the landfill. This amounts to 88 movements per day in total, of which 14 would be artics., as opposed to 82 and 9 for the landfill site respectively. 

The predicted traffic would be less than that for the consented MBT (Mechanical Biological Treatment) facility. While that consent is an historic approval it is, nonetheless, a consent that is capable of still being implemented without further planning approval and the judgements leading to that permission are valid considerations here. This increase in traffic is not considered to be significant, he writes.

His report concludes: "Ultimately, it must be acknowledged that the development will replace the existing landfill activity and achieve a waste management solution that will have less intensive traffic implications than the consented MBT facility.

"While objectors’ concerns are legitimate and fully acknowledged, there is insufficient evidence to suggest that the WTS would result in road safety impacts that are so materially different to either the existing landfill operations or approved MBT facility such that the C77 would be incapable of safely accommodating its traffic."

The recommendation is for approval with conditions. 

It will be interesting to see whether the reconstituted planning committee sticks with the previous decision or gives the WTS their seal of approval.

Methane from Borders landfill = 7,000 cows!

Blowing in the wind EXCLUSIVE by EWAN LAMB

The 356,000 kilos of methane sent skywards from the Easter Langlee landfill site on the outskirts of Galashiels in 2016 equates to the annual gas production of 7,120 beef cattle, according to an investigation conducted by Not Just Sheep & Rugby. 

The rubbish tip operated by Scottish Borders Council is already mired in controversy as planners consider a second application from the local authority who wish to develop a £4 million waste transfer station on land which may already be contaminated.

A growing number of objections to that plan - mainly on grounds of road safety - have been submitted to the planning department which is, of course, another service run by SBC. In the last few days Councillor Harry Scott, one of the Galashiels representatives on the council, has added his voice to the list of waste transfer station opponents.

Meanwhile the Scottish Environment Protection Agency (SEPA) today published environmental statistics on emissions of greenhouse gases in 2016 including methane and the even more damaging chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs).

The reporting threshold for methane is 10,000 kgs per annum and for CFCs and HCFCs 1 kg per annum.

That means the 356,000 kgs of methane emissions at Easter Langlee last year were more than 35 times above the reporting threshold. There was a slight drop from 403,000 kgs in 2015, but the figure was well above the 2010 level of 274,000 kgs.

Scientists claim methane warms the planet by 86 times as much as carbon dioxide (CO2). And based on the estimate that one beef cow emits 50 kgs of methane into the atmosphere each year it would require 7,120 head of cattle to equal Easter Langlee's "performance".

The toxic mixture of emissions at Easter Langlee also included 27.4 kgs of CFCs and 21.4 kgs of HCFCs. Both figures are more than 20 times above the reporting threshold. Levels of CFCs and HCFCs above the threshold are not generated from any other site in the Scottish Borders.

SBC intends closing the landfill facility down in 2018 in yet another bid to comply with Scottish Government regulations on burying household refuse.But their intentions could be jeopardised if planning committee members reject the waste transfer station concept again.

The waste disposal issue should have been dealt with by 2013 had proposals for a modern Mechanical Biological Treatment (MBT) facility been delivered on time. Instead SBC took a huge gamble in a bid to incorporate untried Advanced Thermal Treatment (ATT) technology into the project which resulted in the entire venture having to be aborted in 2015 without a single brick being laid on site.

Now we wonder - mischievously - whether spreading vast quantities of seaweed over the landfilled sections of the Easter Langlee site might cut methane emissions by say 90%. Apparently boffins in Australia may have come up with proof that including seaweed in the diet of cattle might curb their harmful 'botty burps'.

News of this potentially game changing breakthrough emerged in a Scottish Parliament written answer, published only hours before SEPA produced their data. Here is the riveting exchange in full:

John Scott (Ayr) (Scottish Conservative and Unionist Party): To ask the Scottish Government what evaluation it has made of the claim made by the University of Queensland that including a certain type of seaweed in the diet of cattle can reduce their methane output by up to 90%.

 

Fergus Ewing:  (Cabinet Secretary for Rural Economy): The Scottish Government is aware of this work as part of a wider assessment which it has undertaken on the potential for reductions in GHG emissions to be made through changes to livestock diets.

 

John Scott (Ayr) (Scottish Conservative and Unionist Party): To ask the Scottish Government whether it has invited any research institutions to evaluate the work of the University of Queensland with regard to methane reduction in cattle by including seaweed in their diet, and to assess whether a Scottish application might be found for this research. 

 

Fergus Ewing: Experts at Scotland’s Rural College were invited to consider these findings and advised that the reductions observed were based on laboratory based tests only, using seaweeds which are not native to Scottish waters. We remain keen to see how this research progresses and shall continue to monitor developments in this emerging research area.

Council "scandal" hits the headlines

NOT JUST SHEEP & RUGBY reproduces the text of an article which appeared in today's edition of Scotland's The National newspaper. It is the first time a daily paper has covered the dossier of evidence compiled after Scottish Borders Council poured at least £2.4 million of public money down the proverbial drain on a worthless infrastructure project

Bombshell report reveals fresh concerns over aborted waste project that cost council taxpayers £2.4m

by Martin Hannan 

Scottish Borders Council refused to answer questions from retired journalist Bill Chisholm, but was rebuked by the Information Commissioner

A BOMBSHELL report about the loss of more than £2.4 million of public money by Scottish Borders Council casts doubt on the official investigation into that loss.

Distinguished journalist Bill Chisholm, who was awarded the MBE for services to journalism when he retired some years ago, spent 30 months investigating the scandal. The Easter Langlee waste transfer system was never built but still cost the public purse more than £2.4m.

Despite Scottish Borders Council (SBC) constantly refusing to answer his questions, Chisholm – now 72 and describing himself as a concerned council tax payer – persevered and the Scottish Information Commissioner ruled in his favour seven times so that he was able to access the information, which he claims shows mismanagement and a misuse of public funds.

But Audit Scotland’s investigation has cleared the council and it says its file on the matter is now closed.

The saga began in 2011 when the council awarded a 24-year waste management contract, valued at between £65m and £80m, to an English firm, New Earth Solutions Group (NESG), which would include the development and construction of a “cutting-edge” waste treatment facility at Easter Langlee near Galashiels at an estimated cost of up to £23m.

Chisholm’s 43-page report alleges the technology to be used at Easter Langlee by Dorset-based NESG, backed by Isle of Man-based New Earth Recycling & Renewables [Infrastructure] PLC (NERR), was not fully tried and tested.

He reports: “In an interview published in the Journal of the Chartered Institute of Waste Management in October 2015 … Richard Brooke, the commercial director of NESG, said ‘The development in Scotland that would have been New Earth’s sixth facility did not come to fruition for a variety of reasons … the specific energy technology to be built and operated was not ready to bring on-line on a commercial scale.’”

The contractors were given more time and 18 SBC councillors and officers visited NESG’s premises in October 2014 – a trip that cost council taxpayers almost £4,000.

NESG then failed to deliver on Easter Langlee. Less than four months later on 19 February, 2015, the contract was terminated.

Both NESG and NERR went bust and SBC had to write off more than £2.4m. The council has since tried to establish its own new £4.8m waste transfer system at Easter Langlee, but after planning problems work has still not begun and the council continues to face penalties for its failure to treat its waste.

Chisholm asked a series of questions about the technology and funding but received insufficient answers.

The Information Commissioner then overruled SBC in very strong terms, saying: “In the Commissioner’s view, disclosure of the withheld information would serve the public interest in informing the public about the actions and decisions taken by the council, the basis for those actions and decisions, and the reasons why the project failed. The project had involved many years of work, and substantial sums of public money.”

Chisholm was finally told by SBC that the costs involved during the lifetime of the contract totalled £1.968 million – excluding 20 per cent VAT – with much of the money having gone to highly paid consultants.

After external auditors KPMG passed the council’s accounts, public spending watchdog Audit Scotland took over as auditors and concluded the council acted correctly. Both SBC and Audit Scotland have refused to re-open any inquiry into the failed project.

Chisholm told The National: “I would suggest Audit Scotland has made a misjudgment [in connection] with the Borders’ £65m waste management contract

“A significant number of people who have read the report, including an eminent procurement expert, have expressed the view that there are many issues I have uncovered which would justify an investigation.

“Examples include the question of whether the council might have breached EU procurement rules, not to mention the complete loss of at least £2.4m of taxpayers’ money.”

Chisholm added: “Audit Scotland may have closed the file on Project Easter Langlee: I have not.”

A Scottish Borders Council spokesperson said yesterday: “Mr Chisholm has not yet presented Scottish Borders Council formally with a copy of his report, however it is worth noting that both KPMG and Audit Scotland have examined the matter and are both satisfied with the steps taken by the council in relation to the contract with New Earth Solutions.”

An Audit Scotland spokesman said: “In our response to Mr Chisholm we explained that our opinion is that the council came to a reasonable judgment in terminating the contract when it did. We are also satisfied that audit work previously completed by the external auditor showed that the council followed a reasonable process in the procurement of the waste management contract.”

The file ignored by Audit Scotland, parliament and politicians [5]

2013’s NOTIFICATION OF A TWO-YEAR DELAY

The project had been beset by problems and issues from the very outset thanks to a combination of undeveloped technology and the absence of the £23 million to pay for it.

Among a collection of 80 reports, emails and other correspondence which SBC released in August 2017 on the SIC’s orders were details of yet another delay of two years of which notice was given by NES in late 2013. The NEAT trials in Canford were going extremely badly, and after a catalogue of excuses the contractors finally admitted there was no prospect of commissioning the Borders plant until July 2017 although even that date could prove to be ‘ambitious’.

Here’s how the council’s own consultants reacted to the news – although the council seemed content to allow matters to drift on.

SLR Consulting (technical experts) wrote: “In summary it is difficult for SLR to understand whether there is a reticence to try to develop because; data attained does not show the process favourably; if operational issues at Avonmouth are taking priority or are showing some fundamental issues with the technology; if the technical team are capable of addressing and managing the problems to an expedient solution.”

And financial advisers Nevin Associates were more forthright in their correspondence with SBC following the latest test failure at Canford: “This may have been the final incident that convinced NES to come clean and admit that there was no chance of implementing NEAT on a commercial scale in 2014.

“This could leave us hanging on the outcome of the Canford trials, over which we have no control, and if those were to fail or (more likely) take longer than anticipated to succeed, then we would still potentially be exposed to the risk of having no treatment solution in place for the Council’s residual waste.

“It is imperative that momentum is not lost and that NES show evidence of continued commitment to the project, otherwise we may have little option but to pursue a Plan B to avoid the risk that the Council fails to achieve ZWP regulatory requirements.”

NES had already been granted a so-called ‘contract moratorium’ giving them extra time to solve the various problems dogging Project Easter Langlee.

Surely council members should have stepped in and ordered an end to the fiasco in December 2013. That would have avoided a 15 month period up to February 2015 when tens if not hundreds of thousands of pounds of public money continued to be squandered without any progress being made. But yet again councillors appear to have been conspicuous by their absence.

CONCLUSION – Those who take the trouble to read this report are free to draw their own conclusions.

In my opinion Scottish Borders Council - at the very least - was grossly incompetent in its stewardship of substantial sums of public money. SBC was equally inept in the management and administration of a £23 million building contract, work on which had not even started after almost four years of dithering and interminable delays caused by a model of technology which had never been commercially proven, and by an inability to secure funding for construction.

The fact that no-one will be held to account for the entire debacle is regrettable and disgraceful.

That concludes our "serialisation" of the comprehensive document which our regulatory bodies and public representatives chose to ignore and refused to act upon. WHY? As we said at the outset your comments will be welcomed.

The file ignored by Audit Scotland, parliament and politicians [4]

MONITORING OF PROJECT BY ELECTED MEMBERS

 There is virtually no mention of councillor involvement in the Easter Langlee project in any of the documents SBC has volunteered to give me or in the many more released on the orders of the Scottish Information Commissioner.

Minutes of meetings should provide a full picture of the role played by our elected members, but incredibly, during my inquiries I have been told on more than one occasion that events were not formally recorded. Therefore written documents containing information about the ill-fated scheme do not, in many cases, exist on the council’s ‘New Earth Solutions’ file. I would submit that such an admission of sloppy record keeping should be worthy of investigation on its own.

A classic example of this cavalier approach towards the (non) minuting of meetings came to light after I submitted a FOI request seeking information about the council’s large delegation of elected members and officers who made a “fact-finding” trip to NESG headquarters at Avonmouth in October 2014, just four months before the Easter Langlee shipwreck had to be abandoned.

No fewer than 18 of the most powerful members and officials of SBC made the trip (including an overnight stay) at a total cost to taxpayers of £3,939.35. In public statements following their return to the Borders they made it clear they were pleased with what they had seen and were convinced SBC was “on the right track”.

When I requested a list of the questions asked and answers given at a briefing session this is what I was told: “There was then a question and answer session with NES so that Councillors could get a detailed understanding of the delivery strategy, technology development, permit and funding. No information is held on record in respect of the questions or answers provided. Only the presentations are held – which are commercially confidential, a redacted copy is attached.”

I went on to ask for copies of reports generated before and after the visit. Here’s the reply from SBC: “Subsequent project reports, minutes and emails make reference to the visit but were not generated specifically as a consequence of the visit. Again the content of these documents contains commercially confidential information and cannot be released.”

This repeated failure to maintain written records which appears to have permeated much of the four-year liaison between SBC and NESG may be a convenient way of avoiding public scrutiny. But it also runs totally counter to the local authority’s own Information Governance Policy.

That document states unequivocally: “Scottish Borders Council is committed to creating, managing and keeping records that document its principal activities. Information must be processed and protected diligently, lawfully and ethically through good data security, accurate information and informed openness.”

One can only assume those high-minded principles ‘went out of the window’ in the case of the Easter Langlee shambles. Or perhaps the failed Easter Langlee project is not regarded as one of SBC’s “principal activities”.

In fact the visit to the Avonmouth facility may well have been a complete waste of time and money. The misfiring steam technology there was different from the system which was to have been deployed in Galashiels. The 18-strong team carrying out ‘due diligence’ should, according to some experts, have been 67 miles from Avonmouth - in Canford - where NEAT was on trial.

Councillor David Parker, the local authority’s leader, told the Border Telegraph in October 2014 (following the visit) the Avonmouth trip had been “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 newspaper.

“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.”

Contrast that upbeat declaration with DUFF & PHELPS ADMINISTRATORS’ REPORT on New Earth Solutions Group July 2016:

Paragraph 2.8 – “In October 2014 (the same month in which the Borders delegation was briefed by NESG) the Group carried approximately £159 million of debt, with £37 million due to the Banking Group (Co-op) and £102 million to New Earth Recycling & Renewables [Infrastructure] PLC (NERR) which was subordinated to the Banking Group’s debt. A further £20 million was also owed to Macquarie Bank with a request for further funding. Funding from NERR was suspended in 2014 and Co-op was requested to step in to provide financing.”

In other words the due diligence carried out by Councillor Parker and his colleagues managed to miss the fact that NESG was completely insolvent long before the contract was terminated. The cash-strapped company was, to all intents and purposes, incapable of delivering the Easter Langlee project a year if not more prior to February 2015. Did anyone examine the company’s books? What information were the expensive financial consultants [hired at a cost of £146,000] giving SBC about their contractor’s economic well-being (or lack of it)?

COMING NEXT - 2013’s NOTIFICATION OF A TWO-YEAR DELAY

The file ignored by Audit Scotland, parliament and politicians [3]

REVELATIONS AND ISSUES THROWN UP BY THE INVESTIGATION

SBC undoubtedly wished to draw a line in the sand under the New Earth affair as soon as the highly embarrassing decision to terminate the useless contract was taken in February 2015. Their attitude towards my series of FOI requests proves that beyond any reasonable doubt.

But information they have been forced to give me on the instructions of the SIC has penetrated the wall of silence and has shed some light on many worrying aspects of the council’s dealings with a group of financially unstable companies and funds. However, it is impossible to complete the picture without full disclosure. Here are some of the points requiring full investigation:

1. NESG TRACK RECORD AND CONDUCT - NESG was a relatively inexperienced player in the waste management industry, and had little if any knowledge of environmental rules and regulations governing waste disposal in Scotland, including SEPA’s rigorous process before issuing operating certificates.

 Information I obtained showed how NESG became so frustrated over delays in the sanctioning of a permit for the ATT aspect of the Easter Langlee project that they suggested SBC and others should put pressure on the independent environmental watchdog to achieve the desired result. This surely amounted to totally unacceptable and unprofessional conduct.

2. SURETY FOR SEPA - In the very early stages of the contract SBC had to provide financial security in the sum of £315,000 to SEPA on behalf of New Earth Solutions (Scottish Borders) Ltd., the ‘ special vehicle’ set up to deliver the Borders project. The council refused to tell me why this was necessary on grounds of “commercial interests”.

The SIC disagreed and told SBC to give me the information I had asked for. It transpired that NES could not acquire £315,000 of insurance without incurring costs which would have had to be passed back to the council “nor can they afford to hold the capital aside to cover this requirement”. So a contractor involved in a multi-million pound scheme didn’t have £315,000 to spare. Surely alarm bells should have been ringing at SBC. Did anyone ask questions about such a worrying issue?

3. THE STATUS OF NERR & PGIOM - Information obtained during the course of my inquiries has confirmed that SBC were completely unaware of many complaints lodged by investors and shareholders in the NERR fund and against its parent company PGIOM. These businesses were crucial to the successful delivery of Easter Langlee, and SBC was told £6 million per month was pouring into NERR from eager ‘green’ investors.

The truth was that any money reaching NERR’s coffers was either being used to prop up NESG (£39 million in total) or being siphoned off by PGIOM managers and controllers in fees (£12.027 million in 2014 and £10.748 million in 2013 while the Borders contract was ‘live’). The impression is given that SBC accepted at face value what NESG and NERR were telling them. Even in the early years of the contract (2011) NESG was recording sizeable financial losses.

Liquidators Deloitte appointed to investigate NERR by the Isle of Man Financial Services Authority soon discovered almost 3,500 investors and shareholders in the fund would get none of their money back. Deloitte is currently considering the possibility of pursuing third parties in a bid to recoup cash and NERR has insufficient resources to even pay for its own liquidation. PGIOM is also in the process of being dissolved. How did SBC become involved with such unstable offshore entities?

4. DEED OF VARIATION – Perhaps the most important reason for the collapse of the project, and the most puzzling issue to emerge from SBC’s web of secrecy. Within a matter of months of the original contract being signed NESG was telling SBC the MBT plant was undeliverable because it could not attract bank funding as a stand-alone project. How much had changed in such a short period of time? Why were MBT facilities being developed elsewhere in the UK? Did anyone at SBC ask?

In October 2012 members of SBC decided (in private, naturally) to radically change the terms of their contract with NESG to include ATT using so-called NEAT Technology, NESG’s very own brand of gasification and pyrolysis to convert rubbish into electricity.

The councillors must have realised they were taking a huge gamble. Apparently they were labouring under the impression NEAT could install them as champions of the Scottish waste disposal league table. But in fact the technology had not even started its arduous journey through development trials at NESG’s R&D centre in Canford, Kent.

How was any financial institution likely to put up £23 million under those circumstances? What persuaded SBC’s elected members to sanction NEAT when the technology was not commercially proven and funding was not guaranteed? Each member who voted in favour of the DoV must be asked to explain their reasoning, and officers and members of the Project Team who recommended this risky course of action also need to provide a detailed public explanation.

In an interview published in the Journal of the Chartered Institute of Waste Management in October 2015 - AFTER the SBC/NESG contract was shredded, and THREE YEARS AFTER the DoV was rubber-stamped - Richard Brooke, the commercial director of NES, confirmed that the form of technology which had been planned for Easter Langlee was not commercially ready in late 2014. So why did SBC sign up for it in October 2012? Brooke’s reference to the Borders project reads as follows:

“The development in Scotland that would have been New Earth’s sixth facility did not come to fruition for a variety of reasons, most notably the drop-off in the quantity of residual waste requiring treatment; and the specific energy technology to be built and operated was not ready to bring on-line on a commercial scale.”

This amounts to a damning indictment of SBC’s decision making. In actual fact this form of ATT technology remains unproven in 2017 while a similar system installed at another NESG facility in Avonmouth, Bristol has proved so troublesome the entire plant has had to be closed down to allow radical remedial work to be undertaken. It is hoped to reopen the ATT there in 2018.

COMING NEXT - MONITORING OF PROJECT BY ELECTED MEMBERS