Thursday, 21 September 2017

Incredible accolade from Audit Scotland

by EWAN LAMB

The Scottish local authority which repeatedly refused to release information about its failed waste management contract and had to be ordered to make top secret documents public on several occasions by the information commissioner has just been described as "open and transparent" by spending watchdog Audit Scotland.

This unlikely and frankly incredible conclusion is reached in Audit Scotland's annual audit report on Scottish Borders Council's accounts for 2016/17 which will be presented to a council committee next week. The finding is about as plausible as the outcome of the audit into the waste contract itself which provided SBC with a clean bill of health despite losing millions of pounds of taxpayers' money.

According to the audit report, beneath a heading Governance and transparency it states:"The Council has appropriate governance arrangements in place that support the scrutiny of decisions made by the Council. The Council is open and transparent in the way it conducts it business and the public can attend meetings of the Council and its standing committees."

But the fact is SBC's own Scrutiny Committee was not allowed to examine the four year fiasco which resulted from the decision to hook up with insolvent contractors New Earth Solutions. And members of the public have been able to attend ALL council committee meetings in Scotland since the 1975 reform of local government. At the same time councillors can decide to hold sections of meetings in private whenever they wish.

Later on, five whole paragraphs are devoted to the council's superb transparency arrangements. In the interests of accuracy and fairness we have decided to quote paragraphs 78-82 of the report verbatim:

78. Transparency means that the public, in particular local residents, have access to understandable, relevant and timely information about how the Council is taking decisions and how it is using resources such as money, people and assets.
 
79. There is evidence from a number of sources which demonstrate the Council's commitment to transparency. Members of the public can attend meetings of the full Council, executive and other committees. Minutes of these committee meetings and supporting papers are readily available on the Council’s website.
 
80. The Council’s website allows the public to access a wide range of information including the register of members’ interests, current consultations and surveys and how to make a complaint.
 
81. The Council makes its annual accounts available on its website. These include a management commentary which provides details of performance against budget, information on the use of reserves and risks and uncertainties facing the Council.
 

82. Overall, we concluded that the Council conducts its business in an open and transparent manner.

On reading this glowing testament to openness, a former councillor told us: "What a lot of claptrap, This stuff is just padding and alluding to what every council is obliged to do.   What's great about public attending meetings or having access to accounts? Who are Audit Scotland trying to fool?"

The very next section of the document deals with SBC's Freedom of Information handling. And here again, despite recent events which saw the council lambasted (twice) for wrongly withholding information it did not want the public to see, Audit Scotland claims everything in SBC's information garden is rosy!

This is what the report says:

83. During 2017 the Scottish Information Commissioner has issued two rulings against the Council regarding its handling of a Freedom of Information (FoI) request from a member of the public. These decisions found that the Council had not complied with the requirements of the FoI legislation and had incorrectly withheld information.
 

84. As part of our audit work we held meetings with Council officers to discuss how the Council had responded to the FoI requests, and to determine whether the Council had identified any lessons to be learned from the handling of the request or any improvements to its process for dealing with requests. Based on the work carried out, we are satisfied that the Council has an appropriate system in place for responding to FoI requests and that improvements have been adopted.

So that's all right then!

Audit Scotland came up with a similar 'lessons learned' conclusion following the failed £23 million project to provide the Borders with a suitable waste treatment facility. It described the massive loss of public funds as "a poor outcome" but maintained SBC followed correct procedures in ditching their useless contractors in 2015.

Unfortunately that audit did not come up with an explanation for the huge gamble taken by elected members in sanctioning a form of rubbish incineration which had never been tested and could not be made to function. An investigation into that aspect of the debacle, and perhaps the role of Audit Scotland in the affair, is still required.

Wednesday, 13 September 2017

Chuffin' heck: where's the boom?

by DOUGLAS SHEPHERD

A decision by Scottish Borders Council to borrow £7.7 million and settle their share of the Waverley Railway (north section) reinstatement, then use house builders' development contributions to pay off the loan over ten years may turn out to have been a bit risky.

Despite upbeat predictions a decade ago by politicians and estate agents that the second coming of trains in 2015 would spark a house construction boom in Midlothian and the Central Borders, thereby generating large sums of dosh for the two local authorities, there is no sign of a building bonanza in and around Galashiels.

On the other hand new figures published this week by the Scottish Government show house start-ups and completions by the private sector in Midlothian are at record levels. At the same time building industry activity in the Borders has slumped to an all time low.

The housing demand near the northern stretches of the railway line may or may not be directly attributable to the return of the Iron Horse after a gap of 46 years. But the sharp contrast in house building rates in neighbouring council areas is distinctly puzzling.

Here are the statistics which should give local economists, councillors and other stakeholders considerable food for thought. In the Borders case the completions and starts are for the whole region rather than for the narrow corridor where developer contributions are levied. The Scottish Government tables show:

Private Sector housing starts for Midlothian & Scottish Borders:
BORDERS – 2016: 211; 2015: 272; 2010: 215; 2006: 692; 1996: 254. Note: The 2016 figure of 211 is the lowest since 1998 (197).
MIDLOTHIAN – 2016: 847; 2015: 593; 2010: 205; 2006: 309; 1996: 306. Note: 2016 figure of 847 is highest since records began (1996)
Private Sector housing completions for Midlothian & Scottish Borders:
BORDERS – 2016: 235; 2015: 347; 2010: 429; 2006: 618; 1996: 523.

MIDLOTHIAN – 2016: 642; 2015: 583; 2010: 266; 2006: 169; 1996: 209. Note: 2016 figure of 642 highest since records began (1996).

Figures for house completions in the Waverley Developer Contribution area (includes Lauder, Galashiels, Melrose and Selkirk) in the five financial years to 2015/16 can be found in the Scottish Borders Council Housing Land Audit 2016.
The numbers are - 2011/12 89; 2012/13 101; 2013/14 110; 2014/15 91; 2015/16 118.
According to the audit, approximately 32% of all Borders completions fell within the Waverley Developer Contribution area. The report does not specify whether these statistics are for all completions or just the private sector.

But what is clear from both sets of data is that so far the Borders Railway has not kick-started a housing boom in communities bordering the southern sections of track.

It is to be hoped the council attracts enough contributions from house builders to meet the cost of the £8 million loan they took from the Public Works Loan Board [PWLB] in February with an interest rate of 2.05%. This advance is repayable over 10 years.

In April, SBC borrowed a further £10 million from PWLB in April at 1.90%, also over 10 years. Information posted on the PWLB website does not specify what each loan would be used for.

Borders councillors were told at the beginning of this year that by repaying their 'bill' for the railway upfront after borrowing the cash rather than meeting their commitments in instalments through to 2038 by handing over developer contributions they could expect to save around £4 million of public money.

A Freedom of Information request submitted to SBC in June 2014 asked for the total number of development contributions obtained for the railway project so far (2004 to 2014). The council reply showed there had been 241 developer contributions valued in total at £743,127 - far less than the number required to keep up the council's payments. 


Sunday, 10 September 2017

Mystery solved by liquidator's report

EXCLUSIVE by EWAN LAMB

The latest revelations from liquidators who are investigating an insolvent offshore investment company have helped to explain why there was no mention of the fund in a series of monthly reports to Scottish Borders Council by contractors commissioned to build a waste treatment facility for the region.

As we reported over the course of the weekend, Deloitte's, the liquidators for New Earth Renewables & Recycling [Infrastructure] PLC (NERR) has told creditors, investors and shareholders in the fund that while £40 million was being paid out to "service providers", there were no subscriptions from investors from January 2014 onwards.

NERR was supposed to bankroll the £23 million waste treatment plant planned at Easter Langlee, Galashiels by contractors New Earth Solutions (NES). But the local authority was fobbed off with one excuse after another between 2012 and early 2015 as the waste management firm and its "funders" failed to put up the cash for the 'cutting edge' project.

Not Just Sheep & Rugby has now taken a fresh look at the monthly "progress" reports which NES sent to SBC throughout 2013 and 2014. These highly sensitive documents were finally released by the council last month on the orders of the Scottish Information Commissioner.

Each report up to February 2014 carries so-called updates on further funding arrangements with regular mentions for the future role of NERR in delivering the much needed Borders facility.

But following the block on new subscriptions into NERR there is a complete absence of funding updates for seven months. And during that time the crucially important development of the closure of subscriptions is not mentioned.

It is only after an inquiry is made about funding by SBC that NES offers this response: "Action is being taken to raise funds to invest in new projects. A senior debt provider is expected to complete arrangements by the end of August with funds being available in September. This will provide a significant sum of money of which the majority will be returned to NERR".

The following month's update includes yet another carrot: "The visit from the New York based fund that may sit alongside NERR went well. They have said that they now wish to explore with NERR how they can provide money both at a NERR shareholder level and directly into projects.

"Scottish Borders was prominent in the discussion. There will however now be a lengthy due diligence programme to establish the means and timing of any investments".

In a telling comment written in the margin of this report a project team member asks 'Is this a six-month process or a six-year process'.

The truth is that by this time NERR had no income but was ploughing millions of pounds of investors' cash - £24 million in total - into the floundering New Earth Solutions companies. The fund was incapable of financing Project Easter Langlee but SBC was still being told NERR had a role to play.

So did an apparent lack of scrutiny and involvement by elected councillors fail to detect the contract was in critical difficulties long before its abandonment in February 2015?

Perhaps an Audit Scotland report on capital projects by local authorities which was published in 2016 contains some telling passages.

It concluded: "Elected members are not able to scrutinise the performance of capital programmes effectively because they are not receiving adequate information on capital investment. The majority of councils' progress reports to elected members on major capital projects focus on reporting capital spending in the current financial year. Some councils do not report cumulative capital spending, covering several years, against the total capital budget for individual projects.

In a specific reference to the failed Borders project the report says:
"Waste Treatment facility
The Scottish Borders Council cancelled the project due to project-specific issues. In particular, the council failed to demonstrate the project's technical viability and was therefore unable to secure funding for the project. External auditors are satisfied that it followed appropriate procedures in relation to this decision."

Friday, 8 September 2017

Fees of £40 million taken from bankrupt fund

EXCLUSIVE by DOUG COLLIE

An investigation by insolvency experts has discovered that a staggering £40 million worth of fees were dispensed by the directors of the 'green' investment fund which was meant to pay for a planned waste treatment plant to serve the Scottish Borders.

The money removed from the Manx-based New Earth Renewables & Recycling [Infrastructure] fund (NERR) to pay controllers, managers, custodians and promoters far exceeded the £23 million required to cover the cost of Scottish Borders Council's proposed treatment facility at Easter Langlee, Galashiels.

Yet NERR could never come up with the resources for the Borders plant in the four years before the local authority's deal with contractors New Earth Solutions (NES) was abandoned in February 2015. By that time SBC had spent £2.4 million preparing a project which never got off the ground.

A newly published report to creditors and shareholders by NERR liquidators Deloitte has also revealed that the fund never received any subscriptions from investors after January 2014, long before Project Easter Langlee had to be scrapped. But it continued ploughing money into the loss making NES companies, providing loans in excess of £24 million.

The report explains: "The Company (NERR) had provided significant finance to support and back the start-up and expansion of the UK Trading Companies (NES) over a number of years. These investments were made into loss making activities and the development of operations which ultimately proved to be unsuccessful."

New Earth Solutions also suffered a financial collapse last year when accountancy firm Duff & Phelps were appointed joint administrators.

Deloitte's state: "The Joint Liquidators (of NERR) have not entered into any form of settlement with the Administrators and retain an open mind in relation to what steps should now be taken. One option available to the Company (as an unsecured creditor) and one which we are presently considering, would be to seek the appointment of a liquidator over NESGL and/or NESFM to investigate the affairs of those companies (including during the period of Administration)."

Shareholders of NERR are told that given the insolvent position of the Company’s investments, the joint liquidators are continuing to investigate the potential for recovery from other sources.

"We have actively been progressing our enquiries into the failure of the Company and, with the assistance of legal counsel in the Isle of Man and the United Kingdom, have focused on specific issues that, based on our and their experience, we consider have the best chance of securing a valuable return to the shareholders and creditors of the Company."

In what is probably the most disturbing section of the report Deloitte's write: "Given that the UK trading companies performed poorly and ultimately failed, our investigations have focused on the actual causes of loss to the Company. 

"As well as the money that was lost in the investments in the UK Trading Companies, large sums of money (in excess of £40 million) were paid out to service providers. Many of these fees were based on the NAV (Net Asset Value) of the fund, which showed significant increases despite the underlying businesses’ failure. Amongst other things, we are focusing on the basis for the valuation of the Company’s assets and the continued investment of investors’ money into failing businesses."

More than 3,000 investors in NERR had been told there was little or no chance of recovering any of their lost cash. But the new report appears to offer a small glimmer of hope.

It says: "As previously stated in our reports, we are limited in what information we can share with you so that we do not prejudice any potential claims. Further, due to the complex nature of the investigations and voluminous documentation, it may be some time before we can provide you with the final results of our enquiries.

"However, based on the enquiries made and legal advice received so far, we are reasonably confident that our investigation will support the making of potential claims for the benefit of creditors and/or shareholders in due course."

But no story about NERR and NES would be complete without a bizarre twist, and this particular tale of woe is no exception.

The assets of NES may have been sold off by Duff & Phelps for a little over £5 million, and the ownership of those subsidiary companies now rests with Irish-based PandaGreen.

But it seems a consortium headed by waste management company Global Gateways together with a group of financial advisors are attempting to put together a bid to take over the assets.

Deloitte's report sets the scene. "Investors may be aware that we have received an informal approach from Ms Jane Sanders, acting on behalf of Global Gateways and a group of Independent Financial Advisors, mooting a scheme whereby Global Gateways would bring some kind of legal claim in an attempt (as previously attempted without success) to gain control of some of the former assets of the UK Trading Companies on terms and for consideration to the Company and its creditors and shareholders which have not been specified. 

"We have sought to obtain further information and supporting evidence from Ms Sanders to enable us to assess whether such a scheme and the legal claim (apparently directed against the Administrators) has any merit or is likely to benefit creditors and shareholders.

"At the date of this report, we have not received any answers or supporting evidence in response to our requests, either from Ms Sanders or Global Gateways. In the absence of such supporting evidence and having obtained specialist legal advice in the Isle of Man and United Kingdom, we are not presently convinced that there is any basis to undo the transactions with third parties who now own former assets of the UK Trading Companies or that there would be a benefit to the creditors and/or shareholders in doing so."

One financial expert commented after reading Deloitte's report: "The scale of fees being creamed off by those in charge of NERR is quite unbelievable. It is becoming abundantly clear that the contract NES had with Scottish Borders Council gave the NERR fund kudos and credibility with potential investors over a four year period. 

"Unfortunately NERR was never in a position to deliver the Borders waste treatment plant, and SBC were kept onside by a string of plausible but worthless excuses. I'd say they were taken for a ride".




Tuesday, 5 September 2017

Fresh calls for "waste fiasco" inquiry

by EWAN LAMB

There have been renewed calls for some kind of official inquiry into the loss of £2.4 million of public money by Scottish Borders Council following publication of a damning 42-page report into the Easter Langlee waste treatment "affair".

An investigation which took more than two years to complete thanks to the council's refusal to release hundreds of documents linked to the abandoned contract has produced damning evidence and allegations that SBC mismanaged funds by failing to deliver a £23 million facility to deal with the region's 40,000 tonnes of household rubbish.

The catalogue of factual evidence which had to be dragged from the council with the assistance of the Scottish Information Commissioner has been handed to local politicians and media representatives in a bid to have the issue taken further.

Unfortunately Audit Scotland, the organisation normally tasked with such an investigation has shown no appetite to get involved.

And the Scottish Public Services Ombudsman [SPSO] - when supplied with a copy of the report together with a request for advice - recommended passing the document to....Audit Scotland. It would appear that Scotland's regulatory system for public authorities resembles a version of the Magic Roundabout.

But if the regulators see nothing amiss with the loss of £2.4 million together with many millions more which had been invested in New Earth Solutions and its offshore partner New Earth Recycling & Renewables (NERR) fund there has been some strong reaction from experts and others who have read the report.

One of the key findings from the investigation was that councillors in the Borders should have pulled the plug on NES and NERR long before February 2015 when the waste treatment project was finally abandoned for "technical and financial reasons".

An experienced and respected member of the waste management industry told us: "When you look at this in summary it is shocking. How they allowed so much to go on without hitting the stop button beggars belief. What is shocking to me is they had Shanks as a reserve bidder that they could have called when things started to go wrong so quickly". 

He claimed those in charge should have considered "a couple of options", namely:

  1. force NES to build the conventional Mechanical Biological Treatment (MBT) plant as per the contract and set aside the Advanced Thermal Treatment (ATT) facility to be built as phase 2 (as per the original contract.
  2. terminate the contract and award to Shanks. At least Borders would have had a treatment facility
The industry expert commented: "It is to be hoped there is a public enquiry of sorts and a number of people are brought to account. The handling of this was nothing short of shocking. I would also question some of the advisers as to why they did not impress on SBC the need to consider termination much earlier."

There seems little doubt that electyed members at SBC took a huge gamble in 2012 when they sanctioned the inclusion of Advanced Thermal Treatment (ATT) in the Easter Langlee project. This decision was taken even though councillors were aware the ATT technology had not even been through research and development trials.

An anti-ATT campaigner said: "There are important lessons to be learned [from the Borders investigation], not least for those councils where history is repeating itself and for other authorities who should be publicly ruling out gasification..

"This document has provided an invaluable service to the whole movement by giving us a rare glimpse behind the curtain of secrecy that usually hides what really goes on between waste companies and waste authorities. Councillors clearly need educating."

And a former councillor who was once in charge of important local government portfolios told us: 
"There is absolutely no doubt that this is an Audit Scotland matter right enough but it appears that they are happy to go along  with the work they commission from private accounting firms acting as external auditors.

"After all it is Audit Scotland that has set out the guidelines for elected member responsibilities for ensuring best value when it comes to spending the 'Public Pound'  due diligence etc."

One local taxpayer merely said he was 'sad and depressed at the sheer incompetence of councillors and officials at SBC' while a number of others claimed it was "criminal" that no-one had shouldered the blame or been held to account for the loss of such a vast sum of public cash.

Sunday, 27 August 2017

A strong case for the prosecution

DOUGLAS SHEPHERD examines the evidence in the Easter Langlee debacle

The completion of a two-and-a-half year investigation into the failed Scottish Borders waste treatment project has uncovered sufficient evidence to make a charge of gross maladministration stick against those in charge of the contract.

That is Not Just Sheep & Rugby's conclusion based on the contents of dozens of documents which had to be prised out of secret files at Scottish Borders Council via Freedom of Information requests and on the instructions of the Scottish Information Commissioner.

The refusal to accede to requests for information was maintained steadfastly on grounds of "commercial confidentiality" even after debt-ridden contractors New Earth Solutions [NES] collapsed into administration and its offshore funding partner New Earth Recycling & Renewables (NERR) fund was discovered to be insolvent. We maintain SBC indulged in a cover-up in a bid to protect themselves from scrutiny and embarrassment, not to mention responsibility.

It is impossible to mount a defence for SBC as the local authority has maintained a stony silence ever since they were forced to abandon their deeply flawed deal with NES in February 2015 at a cost of at least £2.4 million to council taxpayers.

Not a single elected member has offered a plausible explanation or offered an apology for the collapse of a £23 million construction project which left the Borders waste management strategy in complete disarray.

Now a second planning application has been lodged for the development of a £4 million waste transfer station [WST] on the former New Earth site where refuse collections can be centralised before being carted by road to a destination outwith the area for treatment. The first attempt by Borders council officials to secure permission was thwarted by er Borders councillors!

There is so much damning evidence now in the public domain that it is difficult to outline its impact within the confines of a single article. But here are the main revelations and questions which now hang over the SBC/NES contract:

*Apart from rubber stamping the original contract with NES in 2011 and nodding through a disastrous amendment to the deal in October 2012 there is no evidence of control or even involvement by elected councillors who were responsible for planned expenditure of £23 million at Easter Langlee. What was their actual role? The absence of written records suggests they left matters entirely in the hands of paid officials and extremely costly consultants.

* Had the contract not been varied the Borders should have had a conventional treatment plant capable of diverting 80% of waste from landfill up and running by 2013. Our region ended up with nothing with an end to landfill looming large.

*Councillors agreed in private in 2012 to include Advanced Thermal Treatment – a form of gas-engine incineration – in the project to convert refuse into electricity. Unfortunately the so-called NEAT technology had never been proven commercially at any location, and it never worked.

*NES told SBC at different stages of their relationship that funding for Easter Langlee would come from the firm’s offshore partners, then from one of eight named banks, and latterly from New York. Despite the string of promises and excuses, money for the plant was never in place.


*In late 2013 the NEAT research and development trials were going so badly that New Earth warned of a further two-year delay, taking completion to (hopefully) July 2017. Why did councillors not step in at that stage and order the contract to be abandoned forthwith instead of allowing the farce to continue for another 15 months at great public cost?

*At this point New Earth directors suggested abandoning the gas option and replacing it with a brand of steam technology. But to be viable the re-designed plant would require a 70,000 tonne capacity rather than the 40,000 tonne plant needed to deal with Borders waste. The answer would be to import garbage from other parts of the country.

*In a desperate bid to keep the project alive, NES proposed in 2014 that until the Galashiels centre was completed all of the rubbish from the Scottish Borders should be transported out of the region in fleets of lorries for treatment somewhere in North-east England. Ironically, that is the only environmentally unfriendly solution left to the council in 2017 as a direct result of catastrophic mismanagement of the contract.

*A large delegation of councillors and officials returned from a 'fact finding mission’ to south-west England in October 2014 and confirmed their waste treatment solution was on track and would be an asset to the Scottish Borders. But behind the scenes the project was on the verge of collapse, and four months later it had to be abandoned.

Despite all of these hard facts Scotland's public spending 'watchdog' Audit Scotland has stated repeatedly there was/is no need for an investigation into this mess of SBC's making. Apparently the council pulled the plug at the right time otherwise even more of our cash would have disappeared down a proverbial black hole.

Audit Scotland did concede the loss of £2.4 million was a "poor outcome" for the council. No it wasn't. It was a very poor outcome for taxpayers, but SBC simply wrote off the money and carried on as though nothing had happened.

We rest our case....


Friday, 25 August 2017

Running out of options and still no cash!

EWAN LAMB closes the lid on our damning expose of Borders waste contract

Waste management "specialists" New Earth Solutions did everything they could to keep their multi-million pound contract with Scottish Borders Council alive and kicking throughout 2014 even though the project had been suffering from dead duck syndrome long before that.

As we reported previously, the latest wheeze was a suggested switch from gas engine to steam technology which would fire the incinerators at Easter Langlee and deal with the region's 40,000 tonnes of municipal rubbish.

But unfortunately, to render the steam option viable the plant would require up to 70,000 tonnes of garbage, generating a need to import vast quantities of waste from outwith SBC's territory.

Meanwhile the ingenious head honchos at NESG were offering to export all of the Borders rubbish by road for treatment elsewhere until Easter Langlee was commissioned - hopefully although not definitely in 2017.

The evidence contained in recently released "secret" files from the vaults at SBC suggests an air of growing desperation and a clutching at straws mentality as the gas-based NEAT technology continued to misbehave and the only way of securing £23 million to build the Borders plant appeared to be via the National Lottery or the Euro Millions!

Here's what one member of the project team had to say about the steam solution and the prospect of taking local rubbish in fleets of lorries for treatment in North-east England:

I note the potential steam solution. A key issue looks as if it may be third party volumes - is it realistic that 70/80k tonnes RDF per annum could be sourced for a plant at Easter Langlee - there surely must be some doubt here.

"The interim residual waste treatment solution is potentially interesting. It is another matter, of course, whether whatever might be offered would save cost to the Council in the interim compared to continuing disposal to landfill. 

"Also, we should be mindful that the purpose of the moratorium (and its hoped-for outcome) is to see if a clear way forward can be found for the final residual waste treatment solution and within what timescale, so we might not wish to pursue any interim solution unless and until satisfied following the moratorium that the final residual waste treatment solution is judged to be technically viable, fundable and likely to be implemented within a satisfactory timescale."

But steam treatment for Borders waste was firmly knocked back by SBC's technical consultant who wrote: "In summary, we feel that the adoption of a steam-based solution would be a retrograde step. The steam solution could be costlier, require additional merchant capacity to be affordable, necessitate changes to planning and permitting and would not be capable of retro-fit to gas engines should this be shown to be technically feasible in the future."

There were warnings too that continuing delays could completely derail the council's waste treatment strategy.

A senior officer expressed concern in an email dated August 2014: "Overall, to me, there are positives but we need to be careful that the re-financing news and the possible steam option is not masking the poor performance of Canford (R&D centre for NEAT technology) and NES’ appetite to continuing to pursue gas to engine technology.

"Ultimately we need to bear in mind that we are on a relatively short timeline for delivering a project to meet the first Zero Waste target in 2021, if NES fail to deliver. The latest SBC would need  to start is April 2017. Therefore we need to make sure that between now and October (2014) NES are focusing on a viable option to deliver the project and not stalling for additional time."

The method of paying for the major scheme at Galashiels had also shifted yet again. None of the range of banks and finance houses named in previous correspondence had been persuaded to sign up, and now eyes were turning to bigger fish and across the pond to New York.

An August 2014 email showed just how wide NES were casting their net. In it the managing director himself told SBC: "Pairing up with a larger fund – We are currently speaking to both EY (Ernst & Young) and PWC (Price Waterhouse Cooper) about identifying larger funds who would co-invest alongside NERR to provide finance directly to future NESG projects. This review has identified a number of funding partners and a first line of due diligence is being undertaken to identify the most suitable.

"Funding directly into the project – During the Avonmouth refinancing process the senior debt provider has been asking us if they can now invest directly at the start of our next projects. Scottish Borders has featured prominently in this conversation however, the existing funder would probably expect that the solution is a steam based energy project because they have now got themselves comfortable with the proven nature of this technology. 

"We have also now received approaches from a number of other funders who have been watching the operability test and have indicated that they would now be comfortable lending directly into this technology.
Sale of non-core business – In September we are on target to complete the sale of one of our non-core green / food waste processing businesses. This is highly confidential at the moment and we would appreciate you not forwarding this information onto any of your advisers. 

"We will be making a press announcement at the appropriate stage. Some of the proceeds of this will repay the senior debt attached to the contracts, however, the majority will be returned to NERR (the Isle of Man fund which repeatedly failed to come up with cash for Easter Langlee)."

Despite the reticence of their own experts on the issue of a steam system for Easter Langlee, and the complete lack of funding as of August 2014, a delegation of councillors and lead officers from the council returned from a "fact finding mission" to the NES Avonmouth plant two months later declaring their ideal solution for dealing with Borders rubbish was on track.

How wrong could they be?

NEXT: DRAWING OUR OWN CONCLUSIONS