NYCC waste plant is trading while insolvent:-

The latest accounts from Yorwaste reveal that the Seamer Carr Plant is trading under a voluntary arrangement. We quote as follows verbatim from the accounts:-

The development of the demonstration plant for the new thermal process to recover energy from waste in which the Company is a minority shareholder has been fraught with difficulty over the last year. Increased cost of construction combined with delays in bringing the plant into operation (which resulted in a considerable shortfall in the previously expected level of DEFRA funding), contributed to the overall financial difficulties encountered.

The majority of this funding gap has been met by the Scarborough Power Shareholders, including Yorwaste, through increasing loans to the Company. However, the funding available to the project from its existing Shareholders, apart from that earmarked to support the ongoing operation of the plant, has now been exhausted. This resulted in Scarborough Power proposing a Company Voluntary Arrangement (C.V.A.) with its trade creditors. This C.V.A. was approved by the required majority of creditors, including Yorwaste, on the 8th April 2009.

As with any emerging new technology there inevitably remain a number of operational issues to overcome before the plant operates at the levels required to ensure significant surplus cash generation. The plant works by converting waste into electricity but is not yet operating on a continuous basis.

The Directors of Yorwaste Ltd believe that, in the near future, the plant should be cash generative but considering the current uncertainties have adopted a prudent approach by impairing the outstanding loan as at 31st March 2009 by £909,000. The Board of Scarborough Power Ltd have put in place an action plan to deal with the outstanding technical issues and there remains a high level of confidence that these will be resolved to allow the plant to operate at acceptable utilisation levels within the next six months.

This raises critical questions such as:-

Who authorised the write off of debts owing to ratepayers?

Why haven't ratepayers been informed?

Are the residents of Scarborough aware of the plant and its poor performance and the possible health implications?

Why is the next 35 years waste strategy based on technology which isn't even tried and tested?

You can download the accounts below.

The accounts also reveal that the profitability of Yorwaste is critically dependent upon high levels of waste being processed -which is totally counter to any plans to encourage recycling and reuse.

Again quoting from the accounts:-

"Firstly the Group's operations remain one of high fixed costs and any reduction in waste volumes has an immediate impact upon the Group's profitability'

Once again who decided that the Council should shackle itself to a system which had such high overheads and gearing in terms of profitability? Why should we believe the council has any will to deliver recycling and reuse programmes when they are suffering on the bottom line?