Shetland Islands Council tried to save money by transferring its windfarm company to an arms length trust, it was claimed yesterday (Tuesday).
The islands’ Lord Lieutenant John Scott, who is an independent trustee on Shetland Charitable Trust, condemned the deal by which the trust took on Viking Energy for £900.
The arrangement was agreed by a majority of one vote and means the trust is committed to investing around £3 million to see Shetland’s half share in a 600 megawatt windfarm get through the planning process.
Trustees had been told the council was not allowed to be involved in a company which would eventually be selling electricity. The transfer would also remove any conflict of interest at the planning stage.
However yesterday, in a surprise statement, Viking Energy said the real reason behind the move had been to hand the company to the organisation that would eventually reap the financial benefits of the windfarm.
Mr Scott led the fight to stop the sale going ahead when it was debated back in September, arguing that the transfer was premature and pre-empted the principle decision whether the trust should invest in the proposed windfarm at all.
Last night he said that in his view the transfer was nothing more than the removal of the £3 million development cost from the council’s overstretched budget.
“I think the real reason behind this is that Morgan Goodlad (the council’s chief executive) wanted to save £3 million from the council’s budget and was looking for someone else to fork out the £3 million development cost.
“I think it is embarrassing for the charitable trust that the reasons given for the transfer turned out to be incorrect,” Mr Scott said.
In their statement yesterday afternoon, Viking Energy said they wished to clarify the reasons behind the sale.
The company’s project manager Aaron Priest said: “Viking Energy Ltd has not sold any electricity. It will not be in a position to sell electricity until there is a completed electricity generation project. That possibility is some way off.
“Until the most appropriate investment vehicle for the project could be discussed, investigated and agreed, the council appropriately provided the resources to allow the development to advance. It acted under its remit to take actions that it deems to be in the interests of the general Shetland community.
“By transferring the project during its development stage the risks associated with the early investigation are now held by the party that will eventually benefit should the project proceed.”
By Hans J. Marter
12 December 2007
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