Decision on extra cash for Viking Energy postponed

Viking Energy is facing a shortage of funds after a decision on a £420,000 cash injection had to be postponed by Shetland Charitable Trust today. Too many councillor-trustees declared a conflict of interest and declined to be involved.

The trust needed at least 12 of the 23 trustees to be present for the debate to make it legally quorate but eight were absent on trips out of Shetland or attending a funeral and at least six of those who did turn up declared they would not take part in business relating to Viking for a variety of reasons, leaving only eight or nine able to participate.

The embarrassing hiccup ended the Viking discussion before it had begun, leaving about a dozen windfarm opponents in the audience, and one windfarm supporter, with no debate to spectate on.

The issue of whether to agree to supplement the £3 million already given to Viking will have to be brought back to the next trust meeting, perhaps a specially convened one because no regular meeting is scheduled until 8th September. There is no guarantee the same situation will not arise again. Independent trustee John Scott warned: “It does appear to me from today’s performance that we may never be able to discuss Viking Energy.”

Sustainable Shetland was pleased that another unexpected hurdle had impeded Viking’s progress. Chairman Kevin Learmonth said afterwards: “Clearly trustees were not in the mood for it today.”

However he expects the trust will find some way to “cajole or strong-arm” trustees into voting for the extra cash at the next meeting.

The farce in the town hall again illustrated the difficulty now felt by a number of councillor-trustees over their dual roles and taking part in trust votes which could benefit the council as the landowner of potential wind turbine sites. Fourteen councillors were reported to the Public Standards Commissioner earlier this year by an anonymous complainer for taking part in the council’s vote to back the Viking windfarm.

Those who warned they would walk out of today’s meeting during any Viking discussion included Allison Duncan, who had sought his own legal advice, Gary Robinson and Cecil Smith. The three Viking directors who were present had no option but to remove themselves from the debate.

Others, notably Jonathan Wills, defied any threat of action against them. He vowed to take part, challenging complainers to report him to whoever they liked.

Trust chairman Bill Manson – who could not take part due to being chairman of Viking Energy – said the problem again highlighted the need to get on and reform the composition of the trust to dilute its councillor membership.

Vice-chairman Jim Henry said afterwards the failure to make a decision was “unfortunate” but the trust hoped a decision could be made at a future meeting before there are any financial implications for Viking.

The £420,000 is being sought by Viking on top of the maximum of £3 million that the charitable trust agreed in 2007 to spend to bring the project to its planning decision. At that time a decision was expected in 2009 but the mass of objections to the original proposals led to long delays and modifications to try to address the concerns.

Scottish energy minister Fergus Ewing is now expected to make his announcement in August or September but trustees were told this week it is likely to be 2012 before they have all the information they need to decide whether to invest in the windfarm, should it get government approval.

The extra £420,000 would pay for the trust’s 45 per cent share of Viking’s costs until the end of March 2012. The four private local shareholders who hold a five per cent stake will have to put in another £46,667 on top of the £333,333 they have already invested.

By March next year these two parties, who make up Viking Energy Limited, expect to have spent £3.8 million in total, consisting of £1.6 million on internal costs plus a £200,000 contingency and £2 million on the bills they split with partner Scottish and Southern Energy, which also has its own internal costs on top.

If the windfarm is refused permission the money will have been wasted. Should the minister instigate a public inquiry there will be considerable extra cost for Viking and no guarantee of a favourable result for it.

Sustainable Shetland is against the extra cash being given to Viking. Mr Learmonth said: “They’ve spent all the money they’ve been given so far and the application hasn’t even reached the desk of the energy minister.”

He said they had taken far longer and spent far more than they had told trustees they would require. He did not accept that many of the problems were a consequence of Viking having to address the concerns of groups like Sustainable Shetland and bird conservationists. Instead he blamed the company’s “hopeless optimism”. “It’s the problems and contradictions within their own project,” he said.

“It’s an inability to look at the reality and the detail in the project. And they pretend to themselves everything is okay.”