16th July 2018
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Trust finally agrees to pay back council windfarm cash

, by , in Public Affairs

Shetland Charitable Trust has finally agreed to reimburse the council for its expenditure to date on the Viking Energy windfarm after trustees sanctioned an initial £2.25 million draw-down on its budget for taking the controversial project to the stage of submitting a planning consent application.

Trustees rallied behind the project – which would involve building 150 wind turbines in the north and central mainland in a joint venture with energy giant Scottish and Southern Energy (SSE) – at a specially reconvened meeting of the trust on Wednesday afternoon and the expenditure, from a previously agreed budget of £3 million, was effectively waved through without protest.

It was the third time trustees had been asked to take a decision on the matter after it was deferred in December and then again last month because of many councillor-trustees’ fears over a potential conflict of interest in transferring a financial liability from the SIC to the trust.

The council’s 40 per cent share in the project was transferred to the trust in September 2007, but after the two deferrals the SIC had recently come under criticism from anti-Viking Energy group Sustainable Shetland for continuing to meet the costs of a company in which it no longer retained a direct interest. Chief executive Morgan Goodlad wrote to the trust in January reminding them that the SIC could not continue meeting the costs.

But having had an informal seminar on the conflict of interest issue last week and with 15 of the 22 councillor-trustees present at this week’s meeting, only four said they still felt unable to take part in the vote – one of whom was trust chairman Bill Manson because of his involvement in Viking Energy itself. The others were Alastair Cooper, Allison Duncan and Florence Grains, who all declared an interest and said they would not be voting.

One of the strongest backers of the giant community windfarm in the Town Hall chamber was Josie Simpson, who spoke frankly about the importance of generating new sources of income for the community. “Can we not afford it?” he asked. “This is a very big project to get revenue back into our community, but [I think it is] a risk worth taking. We can keep putting off, but time is not on our side. I think we have to press ahead. If we’re seen to be dithering … SSE are going to lose confidence in us.”

A number of other councillor-trustees, including Betty Fullerton and Caroline Miller, were clearly eager to get on with moving the project to the next stage, while trust financial controller Jeff Goddard and general manager Ann Black succeeded in reassuring Jonathan Wills over some details which had been causing him concern.

Dr Wills had asked if the trust was able to afford the project when it was overspending by in excess of £1 million a year on its annual commitments and also queried what proportion of the approximately £250 million investment required would have to be borrowed, what the necessary loans would be secured against and whether some of the trust’s own assets could be liable.

He also raised his fear about the possibility of a “revenue gap” in the years between the major investment in the windfarm and when the revenue – estimated at in the region of £18 million a year – starts flowing into the trust’s coffers.

Mr Goddard said the potential investment represented only around two per cent of the trust’s overall value to reach the stage of submitting a consent application for the windfarm. He said now was the time to sanction the spending because the structure of Viking Energy was “messy” and trustees were “not sending the right signals, not least to SSE” and it needed to be clear which body, or bodies, were leading the project.

Ms Black pointed out that the trust was trying to adopt a “two-prong approach” to tackling the unsustainable level of spending, by both cutting back on expenditure and finding new income streams, chiefly the windfarm project.

Viking Energy next week begins a series of road shows at which a scale model of the windfarm will be on show, starting at Aith on Monday before calling at Brae Hall on Wednesday and then South Nesting on Friday. It is expected that the long-awaited consent application will be ready for submission in the next few weeks.