The energy company at the centre of the row over the running of Shetland Charitable Trust has refuted claims it should never have been transferred from council control.
Viking Energy Ltd became embroiled in debate in early September when the SIC’s executive committee narrowly agreed to offer it for sale to the charitable trust.
The trust later agreed to buy the company for £900 – a price reflecting the share value of the company, which currently has no assets. But campaigners seeking reform within the charitable trust say the move helped the SIC offload an estimated £3 million in getting the initiative through the planning stage, as well as a potential £60 million the Shetland community would be expected to invest in the venture.
A recent public meeting at the Islesburgh Community Centre in Lerwick heard reformers challenge claims by trust officials that the move was made because it was against the law for a local authority to own a power-generating property.
Now Viking Energy’s project manager, Aaron Priest, has hit back, claiming “long-standing legal advice” suggested there was a risk of a legal challenge if the company remained in council hands.
He said: “Viking Energy is at a stage where its feasibility as a commercial project is being appraised. Should the proposed project proceed beyond the current feasibility stage there will have to be a substantial capital investment with substantial potential returns.
“The most appropriate vehicle for handling such large flows of money is the Shetland Charitable Trust. This trust was established by Shetland Islands Council to hold the funds accruing to the community from such developments.
“The funds in Shetland Charitable Trust are less vulnerable to central government interference. Investment in ventures to provide further returns is within the remit of the Shetland Charitable Trust.
“The council 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.”
Mr Priest said the move to charitable trust control would save the council from having to act as both developer and planning authority when an application for consent concerning the windfarm is submitted.
He said: “For the record, Viking Energy Ltd has not sold any electricity. It will not be in a position to sell any electricity until there is a completed electricity generation project.
“That possibility is some way off and depends on a number of factors, not least upon planning consent for a windfarm and the development of an electrical connection between Shetland and the national electricity grid.”
Mr Priest’s comments have been challenged by one of the campaigners calling for changes to the way the trust is run.
Shetland’s lord lieutenant, John Scott, said the transfer of Viking Energy was made mainly to save the council money, but added the decision was taken for other reasons as well.
He said: “I think it was also to pre-empt a decision by the charitable trust on whether they would invest in Viking Energy.
“What the council has done is by moving the company to the charitable trust before they’ve made a decision about whether to invest they’ve effectively twisted the arm of the trust to make sure they do invest.”
Mr Scott claimed the public were misinformed when the energy company was transferred from council control.
He said: “We were told there was a legal reason why they could not own the company, and that turns out to be wrong.
“It’s saying in fact the council could own the company until it produces electricity, which will be in eight years time.
“The charitable trust was misinformed at the point when the issue was made.”
In a letter to The Shetland Times this week reformer Willie Ross – who jointly chaired the recent open meeting into the running of the trust – said the campaigners neither favour or oppose the Viking Energy project or any other proposed spend by Shetland Charitable Trust. Mr Ross said the reason behind the meeting was to gather views and allow the public more of a say in how Shetland’s oil money is invested.
He said: “Trustees have acted as councillors and have resisted recommended reform. Reform is thus completely necessary and cannot be left to those that have resisted it.”
Over 30 people attended the open meeting into the running of the charitable trust staged by Mr Ross along with fellow reformers Peter Hamilton and Steve Jack.
Despite positive feedback, some raised concerns that they could not see what changes the group would like implemented.
Shetland Charitable Trust vice chairman Jim Henry said discussions between the trust and its reformers would take place in the future, but said an approach would have to be made to the trust by representatives of the group seeking change.
He said: “The trust will have to meet them – they’ll have to approach the trust. If we’re going to be professional about it, it’s got to be up to them to come forward.
“The trust was elected in May. Everyone knows what they were voting for. The first thing they should do – I would think – is write in or approach the trust in some way.
“I don’t think that’s been done. All I’ve seen is what has been in the newspapers, and that’s not a professional way to go about things.”
Mr Hamilton said: “It is interesting Jim Henry is asking the campaigners to behave professionally. Let us first remember the reason Shetland Charitable Trust is in this mess is because councillor/trustees have ignored professional advice to reform the trust.
“The group (seeking reform) intends to proceed as was democratically resolved at the public meeting by offering the people of Shetland the opportunity to have their say on how they would like the trust to operate in the future.”
The reformers say Shetland Charitable Trust is left open to a conflict of interest because 22 out of its 24 trustees are also elected councillors.
They say the aims of the trust differ from those of the local authority, whose main duty is to deliver local services. And they claim the fact that elected councillors are automatically made charitable trustees when elected is not made clear enough at the ballot box.
One group which has benefited from the open meeting is the Salvation Army, whose officer – Tom Richardson – said the organisation was feeding people referred to them by drug and alcohol agencies because social services did not have enough funds to deal with them.
Mr Richardson said the response from the public since the meeting had been overwhelming.
He said: “Since the article [in The Shetland Times] appeared we’ve had very generous responses from people dotted all around Shetland.
“Some people have been very generous with donations, some people have offered support and some people have offered practical help for things like cooking.
“We’re very thankful and we’ve been quite overawed by people’s generosity of heart.”
By Ryan Taylor
14 December 2007
|Wind Watch relies entirely
on User Funding