Extra £3.4m added to Norfolk incinerator compensation bill

The proposed incinerator site at Saddlebow. Picture: Ian Burt. The proposed incinerator site at Saddlebow. Picture: Ian Burt.

Friday, May 16, 2014
5:52 PM

An extra £3.4m has been added to the bill accrued for pulling the plug on the proposed Norfolk incinerator, with the county council leader meaning that will inevitably mean further cuts are needed.

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The county council voted by 48 votes to 30 to terminate the contract for the proposed incinerator at King’s Lynn at an extraordinary meeting last month.

At that time, the estimated cost of cancelling the contract was put at about £30m, including £20.3m to Cory Wheelabrator - the company which would have built and run the controversial Saddlebow plant.

Those costs included public inquiry costs of £1.6m and estimated interest rate related costs of £8.36m, which includes what are know as hedging costs.

It is those costs which have increased, now standing at £11.86m, with council bosses blaming the increase on the strength of the pound and reducing long term interest rates.

They have to be paid within three days.

Although the final figure cannot be identified until July, the hedging cost increase means the council will have to spend £33.7m, on top of what they had already paid for the site and for procurement costs.

And county council leader George Nobbs said that was likely to mean more pain for an authority which recently announced £167m of cuts to help plug a £189m funding gap.

He said: “This final figure for the ‘hedging’ element of the contract is more than we would have hoped it would be, but it has to be found, and will be found. None of this has been easy but the county council will cope and come through this.”

The council had already built up a compensation war chest of £19m and had identified £3m from underspends. Further savings which have been identified come from other underspends; £1m from cash which had been set aside for organisational change; £290,000 clawed back from the Icelandic banks; a £500,000 contribution from the council’s arms-length company Norse and £700,000 from the sale of council property.

Officers had also recommendied two options as to how to save the final £1m. One option would take £900,000 from highways maintenance and spend £140,000 less on library books.

The other would make up the missing £1m or so from about half of the money from council tax on second homes which the county council currently gives to district councils.

That suggestion has angered leaders of some of the district councils, including West Norfolk, Breckland, North Norfolk and Broadland.

Broadland District Council leader Andrew Proctor had accused the county council of punishing the districts to tackle the county’s financial problem, while Tom FitzPatrick, North Norfolk Council leader, said losing the money would hamper efforts to tackle rural isolation.

The council had already spent £1.76m on the land where the incinerator was due to be built. West Norfolk Council has approached the county council to buy the site.

But, at a cabinet meeting this week, Steve Morphew, cabinet member for finance, corporate and personnel, said no decision had been made on whether to market the site for sale.

Full council is due to consider a recommendation from cabinet about the costs of terminating the contract on Tuesday, May 27.

An update on the implications from the latest development will be given to councillors at that meeting.

• What do you think of the incinerator saga? Write, giving full contact details, to Letters Editor, Prospect House, Rouen Road, Norwich NR1 1RE.

54 comments

  • A private company laughs all the way to the bank with our money. Tory incompetence all the way through...don't vote for them in the council elections.

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    pablo

    Thursday, May 22, 2014

  • I refer to the comment made a short while ago.

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    Dickens

    Tuesday, May 20, 2014

  • Not certain where Shirley keeps its head but I have a pretty good idea.

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    Sherlock

    Tuesday, May 20, 2014

  • If the rules say that you cannot sell capital assets off to pay for revenue costs, the rules are an ass Mr.Morphew. Can we petition Parliament to get them changed? Prime Minister and the national press need to be aware of this financial mess Norfolk is in,does anyone think they are?

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    bedoomed

    Tuesday, May 20, 2014

  • You are talking out of your hat as usual D.ic.kens - it won't happen. Stop resorting to fantasy and scare tactics in an effort to stroke your own ego.

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    Shirley Stalker

    Monday, May 19, 2014

  • It would be quite wrong for NCC to take the last extra £1m out of second home council tax that goes to the districts. Why should councils who have done the right thing carry the can for a council that has messed things up? The NCC cabinet should trim its budget to meet its commitments and justify its decisions come the next election. What we're seeing now is Labour trying to dodge the bullet that is rightly coming their way.

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    Jack1956

    Monday, May 19, 2014

  • Based on the information published to date surely any incineration proposal would require fully substantiated support data, especially when aware the waste reality has changed dramatically over recent years, fundamental data details a significant reduction in residual material year on year and superior waste streaming alternatives are rapidly developing . Using long term fixed burn incineration for EfW is shown to be totally undesirable diverting resources away from superior waste streams that can provide 70% greater energy gain and much lower environmental impact. The data used to originally support the burning project sadly conflicts with reality and should surely be confirmed invalid , specified incinerator emissions include dangerous content that has no safe level of exposure guaranteeing health impact and confirmed incinerator overcapacity with serious competition guarantees project viability problems. Check the data resulting from incinerator experience in adjacent Counties together with new reports on air pollution health impact and it becomes obvious any burning proposal requires special scrutiny. The financial package illustrates cause for serious concern especially when aware that cancellation compensation detailed to date for Lynn project is many times higher than shown for other incinerator proposals and appears fundamentally flawed when it is displayed as a purely a paperwork exercise being used to justify the claim for preparing a standard off the shelf incinerator proposal . This is public money so surely every penny claimed must be fully justified and the public provided with full transparency on all aspects of this sad saga.

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    Brian W

    Monday, May 19, 2014

  • Radio Norfolk's interview this morning was nothing more or nothing less that a Party Politcal Broadcast on behalf of the Steve Morphew party!he 'soft voice' approach intending to lull listeners into a false sense of security and 'nanny knows best' is all very well however it does not take away from the fact that nothing is above board with this whole issue, from the unseen Contract onwards. The officers in charge at the time had no idea that there would be any queries about building this incinerator and thought they could walk it through with no opposition. All those officers have left the County Council. County Hall is now run by interim officers who have come in and are still implimenting those methods. We do not have a proper Chief Executive officer who should be taking charge (that we hope will be in August), The Finance officer seems to have his own agenda, telling us that the Council a few months ago was going bankcrupt which was untrue and he no doubt is now advising GNobbs and Morphew with news they want to hear. Where's the positive news? The positive news is that County Hall is still supressing those who could deal with this situation adequately because they fear for their own jobs.

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    maryjane

    Monday, May 19, 2014

  • So CW are going to get finance to start building without a contract in place? Just been speaking to Uncle Eric and he assures me this will never happen especially with all the new evidence that has been sent in against it. Dream on...................

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    disolushund

    Monday, May 19, 2014

  • As said some time ago. The site will remain reserved for CW and after ratification their bid to purchase it will be successful and following the purchase of the land the build will begin. During the construction period a new contract with NCC will be agreed and signed. The new contract will be ratified by Full Council and receive party wide support.

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    Dickens

    Monday, May 19, 2014

  • What has personally offended a great many people throughout the history of the Saddlebow waste incinerator project has been the arrogance displayed in County Hall, both by members and officers. That arrogance has taken many forms. Like Canary Boy, I too listened to Radio Norfolk this morning and from what I heard I suspect that the leaders of the district councils - at their meeting on Friday in County Hall with Cllrs Nobbs and Morphew - were treated with total arrogance. This arrogance has now developed into a well-set culture that has been adopted irrespective of political colour. It is so well set that I doubt the ability of the comparatively few decent members who would never subscribe to it to break it. How on earth can NCC justify including the words "at your service" in its masthead?

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    John Martin

    Monday, May 19, 2014

  • Wattonlad - Not sure what you were trying to get at but BP has as many American shareholders as british which is why it dropped "British" from its name. Also if NCC gets rid of its waste in Suffolk it is most likely going to sign an agreement which will commit it for several years. They should have just got on and built it, but yet again the minority spoilt it for the majority - bit like careless dog owners!. Even without the credits it would have saved money. Never mind though, with the rainbow alliance flying the flag of unity, and Leader Nobbs at the helm, I'm convinced he'll soon navigate us all to safety...

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    Andy T

    Monday, May 19, 2014

  • I agree with Ingo. Councilers and officers need to be helped to look at how to solve the waste problem in an environmentally sound and cost efficient way. What we don't need is a slanging match between Del Boy Dickens and his imaginary friends and the rest. I suggest as a start you all try listening to the Dash for Ash episode of BBC Radio 4's Costing the Earth on the BBC iPlayer.

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    Sugarbeet

    Monday, May 19, 2014

  • Listening to radio norfolk this morning it seems that officers still overule elected leaders. It also appears that secrecy, arrogance and dictatorial stratigic manouvering is still working on behalf of CW rather than our public purse. As the district leaders alle.gedly were treated with comt.empt perhaps its time they all stop dancing to the ncc officer tune. With so much development, industrial and housing, planned in every district the next appauling example of officer incom.petence could bring another disaster to their doorstep.

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    Canary Boy

    Monday, May 19, 2014

  • As far I can see Cory Wheelabrator are bleeding Norfolk residents dry when they have had little or no outlay. Cory Wheelabrator must have given wrong information and advice to NCC s from day one, the planning application was bizarre and details not available even a few days before the planning meeting and signing of the contract. When the USA had the pipeline disaster they tried to bankrupt BP petroleum and it was an American drilling company who caused the disaster. NCC should be claiming compensation off CW for their inexperience as they had never built an incinerator in the UK prior to bidding for the Saddlebow incinerator. They had taken 16 years to get Belvedere incinerator built so they have history of lack of planning knowledge of UK planning laws for incinerators.

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    wattonlad

    Sunday, May 18, 2014

  • You have ducked the challenge. Who is your BL? Beware that karma doesn`t bite you!

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    democrat

    Sunday, May 18, 2014

  • I have done an internet check and discovered 467 councillors in England with the initials BL. Should we mention them all ? Will it help ? It appears there is life outside the bubble of Norfolk and others share the same initials. Incredible stuff. BL could stand for 'Barmy litigant'.

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    Jim Hacker

    Sunday, May 18, 2014

  • Well it's a long shot but I reckon B stands for burgers and L stands for lemonade. Who Knows? Depends what is going on in your own mind. I agree what disolushund said though. We must rid ourselves of the likes of 'sweet cheeks' - very suggestive and also 'canary boy' - we all know what that means. A few others as well. Better start reporting to the Editor today or do they not count as they are anti incinerator bloggers ? Sauce for the goose as they say and be careful what you wish for.

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    Webbed Feet

    Sunday, May 18, 2014

  • Public consultation about alternative waste treatment technologies should be the County Council's highest priority as every day lost without alternatives is costing us bucketloads. But will they listen now and will people throughout Norfolk care enough to discuss the way forward? It cannot just be West Norfolk and King's Lynn who lead the debate.The waste is everybody's.

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    bedoomed

    Sunday, May 18, 2014

  • The financial hurdles involving a 'carry on' by the pollution lobby are now insurmountable and the sad wretching of souls here still goading the public with their multiple personality excesses here, are just that, sad. Bless. What we should be debating is alternatives, but doom and finger pointing is the only thing that is currently occupying our feeble representatives and party politicians.

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    ingo wagenknecht

    Sunday, May 18, 2014

  • Free speech does not involve making comments about others that are simply not true, without running the risk of being sued. You make an important allegation about "BL". We all know who that is. Why not repeat the comment and state who "BL" is. I challenge you.

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    democrat

    Sunday, May 18, 2014

  • Del. I agree with some of these names being removed. The EDP should keep a close eye on the user names and remove the rude and sexually offensive ones immediately. Children do read the papers you know!

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    disolushund

    Sunday, May 18, 2014

  • Another thing. Why do these anti campaigners always want everyone's posts removed except their own ? They are always talking about democracy and free speech and then moan to the newspaper about everyone with a different view. We know the sort and we can all play that silly playground game so feel free.

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    Del Boy

    Sunday, May 18, 2014

  • I can think of a dozen councillors that fit the bill. My question is who is 'D' ? Is it democrat or d, west lynn or Daniel or disolushoned or me ? Perhaps we should all take action against you. I sincerely hope so. The words planks, short and two spring to mind.

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    Del Boy

    Sunday, May 18, 2014

  • D, you continue to spread spurious information about a particular county councillor. You make it quite clear who you are referring to. There is no proof that your so-called facts are correct. I sincerely hope that he takes legal action against you. The EDP should be ashamed that it has allowed these posts, and consequently should immediately remove them. No doubt you will say you have proof but I for one will not believe you. You really have hit rock bottom.

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    democrat

    Saturday, May 17, 2014

  • aptly named CB. When CW leave expect you'll be with them.

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    disolushund

    Saturday, May 17, 2014

  • NCC have promised the land to CW and after planning is ratified they will get it. A councillor who pretended to be close to the campaigners knows all about it. Never mentioned a word though. Funny that.

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    Canary Brain

    Saturday, May 17, 2014

  • Hey citizen - or should I say Canary, Interpol, Honest John, D,West Lynn, Shirley, Nemesis. Norfolk born and bred are you ?

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    Canary Brain

    Saturday, May 17, 2014

  • BCKLWN have offered to buy the site from NCC which would plug the funding gap without the need for cuts but for for some political reason NCC suddenly don't want to sell. As for CW still wanting to build the incinerator they should take their ill gotten gains and leave West Norfolk, we could organise them a parade out of town.

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    Daniel Parton

    Saturday, May 17, 2014

  • The anti mob don't like to hear it but CW have made a public announcement now about going ahead. They are already in talks with others and the finance is all in place. Seems the anti's are as badly informed as always. Just the usual Insults. How very 'Norfolk'.

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    Mad Dog

    Saturday, May 17, 2014

  • Di.ckens keep spouting your rubbish doesnt matter which user name you post it under without council waste or palm paper there will be no funders for CW to provide 140 millionish towards construction. Plus as I said the whole basis the planning application was submitted upon, and the evid.ence placed before the inquiry, is no longer relevant so there is every justification to lodge an appeal. No Pfi credits used as evidence as value for money and government approval, no national need clearly stated by defra when the pfi was withdrawn, no contract with NCC, no chp uptake as palm are building their own steam and power generation ccgt. I suppose your only achievent is in wasting our time replying to your endless mischief making therefore I am now going to totally ignore you!

    Add your comment | Report this comment

    Canary Boy

    Saturday, May 17, 2014

  • Cory Wheelabrator have a hold and crippling Norfolk services especially as residents have had to endure austerity measures. If Cory Wheelabrator suggest they or contractors have purchased machinery this should be made property of NCC and sold on. £34 million for doing nothing is worse than the banker’s crisis or a pyramid sales scam.

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    Interpol

    Saturday, May 17, 2014

  • I say old bean. Big problem with appeals is that at this level things are different. You have to show just cause and if you launch an appeal that is seen as an act of deliberate mischief you can find yourself landed with a massive bill for costs. Appeals against a Government Ministers decision have to be watertight or the danger of costs brought against the appellant is very real. People have lost their homes over this before so tread with care.

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    Sir Montague Baden-Philips

    Saturday, May 17, 2014

  • Appeals can cost a lot more than £50,000. To launch one against a company with a project this complex would be nearer half a million at the very least. You can't just appeal for the sake of it. Very stupid to think otherwise. Without the council behind them the campaigners are on their own now. Thank goodness for that before they cost us all another fortune. Lets see them put their money where their mouth is. It will be a long wait. The campaigners are lost at sea now with no one to turn to already.

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    Solomon Cohen

    Saturday, May 17, 2014

  • One of my congregation tells me that an appeal against planning consent given by the Sec of State would cost upwards of £50k. Have the protestors got this money ? I think not.

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    Right Reverend Fuller

    Saturday, May 17, 2014

  • When will this Council start selling off some of our assets? It should have started a year ago if they had understood the risk of the Willows not proceeding, but better late than never. £3.4 million for their share in Norwich International would be good for a start.

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    bedoomed

    Saturday, May 17, 2014

  • PS If Pickles does grant planning permission I can guarantee there will be an appeal, remember CW will now be paying their own legal and consultants fees, because the whole proposal was for a facility for Norfolk waste considering haulage impact on Norfolk roads, Norfolk need etc, etc. CW can forget Norfolk council waste unless they drop their gatefees dramaticaly why when not tied to a contract for 25 yrs with a public purse in crisis would NCC dispose of any waste paying more than it needs to? The people pushing the project are now either gone or have had their wings clipped the committee system is just round the corner as is a general election. Forget CW they are nothing but a bad memory in the history of Norfolk.

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    Canary Boy

    Saturday, May 17, 2014

  • Who from a commercial point of view could spend anytime thinking CW will build an incinerator using their own finance and loans funded privately? Nothing more than a blatant attempt to upset the natives by Di.ckens. Nemesis explains the reality of the situation perfectly.

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    Canary Boy

    Saturday, May 17, 2014

  • He's here alright - talking up his usual brand of rubbish under all the usual guises.

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    Shirley Stalker

    Saturday, May 17, 2014

  • Still no comment from our resident political expert D!ckens who assured us, with the benefit of all his insider knowledge, that the incinerator would definitely be built. Let's hope he doesn't now feel PercyCuted!

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    Norfolk and Good

    Friday, May 16, 2014

  • Does it ever occur to those of you who post so confidently on this website that CW face three major obstacles at this stage in building the Saddlebow incinerator? The first is that the Communities Secretary grants planning permission. Fine. So let us imagine that he does. The second is that CW has to acquire the site. Well, NCC could agree to sell it to them. But that would be political suicide for those who made the decision. Fine. So let us accept that political suicide does not worry those involved. So that leaves us with the third obstacle, namely the cash. The construction cost is now estimated at £160m. When the deal with NCC was originally done, CW had to borrow 80% of that from its banks over twenty-five years. Those banks only agreed to put the money up if CW could prove that NCC was prepared to sign up to a twenty-five year contract to pay £600m to CW. That guaranteed that the banks would get their investment back plus an enviable return on their money. The NCC deal has gone, and it is extremely unlikely that any other local authority is going to sign up to something similar now with CW. So, CW goes out into the finance market and asks to lenders to put up 80% of £160m so that it can build an incinerator speculatively, with those any banks who are interested having no guarantee of a twenty-five year stream of income flowing into CW from the incinerator so that it can be confident that it will get its capital back, and make a huge profit on top. I can only think that you who believe that CW can pull this off have no experience of the hard commercial world of finance.

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    Nemesis

    Friday, May 16, 2014

  • It is all the fault of those anti campaigners right enough. The firm is still going ahead with the build and when it is up and running NCC will want to use it and therefore will sign another contract. Oh the irony. I don't think some people here realise what is going on do they ?

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    Del Boy

    Friday, May 16, 2014

  • Cash to Burn it seems :p

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    che bramley

    Friday, May 16, 2014

  • Percy Cuted, ha ha ha ha ha ha ha ha ha ha ha. In the famous words of a Scottish comedian, "get it up ye!"

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    d, west lynn

    Friday, May 16, 2014

  • How about taxpayers in Norfolk take a vote to decide those in Charge Of Norfolk County Council should themselves be incinerated. Oh sorry they are Toxic creatures, so let not go there !

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    che bramley

    Friday, May 16, 2014

  • Politics has played a big part in how this has panned out, from top to bottom. It's time for those responsible to resign, oh hang on they are politicians so they won't do that as it's never their fault, unless proved otherwise in a court of law after wasting more of our money in doing so. The NDR is another project which is a pointless waste of our money as it goes nowhere, what's the point in a road that goes nowhere. These people are out of their depth and have little interest in doing the right thing for us and this county, whilst they can play political games at our expense and seem quite proud of themselves.

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    parkeg1

    Friday, May 16, 2014

  • NCC could afford to pay £1m for every £2m saved to a good legal mind who had no involvement in the contract to pull it apart, so why aren't they? How much will go into the pockets of those at County Hall in return for minimal negotiation?

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    Honest John

    Friday, May 16, 2014

  • Sadly NCC will have to sign a new contract when the incinerator is built by CW. All this could have been avoided. The fault lies entirely with those involved with the anti incinerator campaign. That is the hard truth. Nobbs has acted badly.

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    Percy Cuted

    Friday, May 16, 2014

  • Hopefully a sizeable donation will be made by the fools who signed the contract. But I am not going to hold my breath.

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    Norfolkman

    Friday, May 16, 2014

  • We will no doubt have some left wing words from Peter Smith in a short while. He will tell us how wonderful K.nobbs is.

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    Sweet cheeks

    Friday, May 16, 2014

  • When are we going to see the signatories of this fiasco brought to book together with the NCc legal department who obviously agreed the contract in the first place. ?

    Add your comment | Report this comment

    "V"

    Friday, May 16, 2014

  • Waste money on silly little pet projects, have to make stupid cuts like £140,000 on library books, as Vic has said drop the road to nowhere, why do they need Coltishall to sit to be admired. Can they not see that they are out of their depth and penalising ordinary folk, why about some them putting their own money where their mouth is?

    Add your comment | Report this comment

    blackdog2

    Friday, May 16, 2014

  • Vic I agree, why don't they just get on with it and get their house in order. They could borrow some of the money for about 2%. What we are seeing here is a leader and a cabinet who are out of their depth.

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    Sweet cheeks

    Friday, May 16, 2014

  • It's nothing, this council has money to burn as they continue to pump vast fortunes into the NDR, Postwick, and Coltishall.

    Add your comment | Report this comment

    Vic Sponge

    Friday, May 16, 2014

The views expressed in the above comments do not necessarily reflect the views of this site

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