Plans for a £23million advanced thermal treatment facility have been abandoned by Scottish Borders Council.
Nearly four years after signing a contract with a specialist English company to provide the state-of-the-art plant at Easter Langlee near Galashiels, the council has pulled the plug on the deal – leaving it with a £2million hole in its capital finances.
The decision to terminate the arrangement with New Earth Solutions (NES) was taken by councillors in private last week.
They heard of “project-specific issues in terms of technology and funding” which could not be resolved.
Included in the contract was the installation of a plant to thermally treat around 25,000 tonnes of biodegradable municipal waste a year, producing gas that would then be converted on site into electricity worth an estimated £80million to the company over 24 years. The plant would crucially help SBC comply with the Scottish Government ban on all biodegradable waste going to landfill by 2021. But councillors were told the effectiveness of the so-called gasification technology, which would have been the first of its kind in Scotland, had not yet been proven on a commercial scale.
The firm had also struggled to raise investment for the project, not least because waste volumes have declined since the contract was signed in Apri 2011 and new statutory food waste collections, due to be introduced for 24,000 households this year, would further cut the anticipated “foodstock” going into the plant.
“Together, the council and NES have put in a considerable effort to try to overcome these challenges, but have been unable to address all the implementation issues,” revealed Mr Parker, who said the decision to terminate the contract had been mutual. “Ultimately, time ran out to find a resolution.”
Asked how much the local authority had spent since the procurement process began at the end of 2008, an SBC spokesperson said: “The figure is £2.4million to date, of which £400,000 has been invested in Easter Langlee to improve the asset value to the council.
“The remaining £2million covers project-related expenditure, including technical, legal and financial advisers, and project managers.
None of this money has been paid directly to NES.
“We anticipate the £2million will be written off as an accounting adjustment. However, there will be a reduction in the capital assets held by the council and there will be further costs in closing the project down.”
Admitting it was “back to the drawing board”, Mr Parker said: “We will now be reviewing all options with a few to procuring an alternative solution next year and having something in operation by January 2021.
“I can assure Borders households that the current waste services provided by the council will be unaffected.”