Revealed: how SBC’s £2.4m went to waste

Site of new thermo heat plant at Langlee, Galashiels.
Site of new thermo heat plant at Langlee, Galashiels.

A confidential paper from 2012 has revealed why elected members of Scottish Borders Council made the ill-fated decision to contract a private company to deliver

an advanced thermal treatment (ATT) plant at Easter Langlee in Galashiels.

The deal with New Earth Solutions (NES), worth £65m over 24 years, was scrapped in February 2015 leaving the council to write off the £2.4m it had spent on the protracted procurement process.

Issues relating to untried technology and the firm’s inability to attract funding for the ATT project were cited for the deal’s collapse.

The leaked document is the minute of a private council meeting held on October 25, 2012, when councillors sanctioned a Deed of Variation to an original contract – also agreed in private on March 2011 – for NES to provide a conventional composting mechanical biological treatment (MBT) plant at the Galashiels landfill site.

Elected members endorsed delivery of the incineration-based ATT facility which would turn 80% of the region’s waste into gas and then into electricity.

The council has resisted several Freedom of Information attempts to divulge details of what informed that decision, maintaining that its dealings with NES must, according to a clause in the now defunct contract, remain confidential until 2021.

But the minute reveals that in January, 2012 – nine months after the original MBT deal was struck – NES indicated it could “no longer get bank funding” without the ATT element being added from the start of operations, requiring the contract to be amended.

“The proposed changes to the project still represented best value for the council…,” states the minute. “The new integrated [MBT and ATT] facility would actually deliver added benefits and reduce risk to the council.”

The revelation that NES could not get funding for the MBT plant and required the contract to be amended, is surprising, given that another leaked document - a letter sent to SBC by agents working on behalf of NES in 2010 - indicated interest in the MBT project from over a dozen financial institutions.

The funder recommended by the agents and selected for the original MBT contract was New Earth Recycling and Renewables (Infrastructure) PLC, part of the Isle of Man-based Premier Group which, in turn, is controlled in the British Virgin Islands.

“We have yet to discover why neither SBC nor NES did not go back to the other banks and potential lenders who had expressed an interest in the MBT plant before the catastrophic decision was taken to pursue the ATT option,” said retired journalist Bill Chisholm, who received the leak minutes.