Eco plant's future remains uncertain

THE future of a Scarborough plant used to burn off rubbish and produce energy remains in doubt.

Scarborough Power is still six months away from breaking even, more than half a year after a loan of 900,000 from a publicly owned company was written off.

Yorwaste, which is owned by North Yorkshire County Council and the City of York Council, partially impaired a loan to Scarborough Power for the plant at the Seamer Carr tip site in March this year.

An impaired loan, in layman’s terms, is one where repayment is so unlikely it is removed from a company’s balance sheet.

Yorwaste loaned a total of 1,740,207 to the firm – 909,000 of which was impaired, meaning that amount would no longer appear on the company’s balance sheets.

But more of the loan may yet have to be scrapped after Yorwaste’s annual report stated: “The overall future of Scarborough Power remains uncertain, as such, further impairment may be required.”

In the report, published in April, Yorwaste, an “arms-length” management company, jointly admitted scrapping more than half of the loan.

The report also expressed a “high level of confidence” that the plant would “operate at acceptable utilisation levels within the next six months”.

Eight months later Yorwaste, a minority shareholder in Scarborough Power, is still waiting.

A Yorwaste statement to the Evening News says: “Scarborough Power Limited needs to ensure the technology operates on a continual basis and this has necessitated some redesign of some components, and various improvements to the plant will be undertaken over the next six months.”

Delays in getting the project under way have already affected the company, which owns 21 of 87 issued shares in Scarborough Power – 24.9 per cent of the business. The other 66 issued ordinary shares are owned by Southampton-based Gem Operations (UK) Ltd.

Yorwaste has also loaned 550,000 to Gem Operations, who provide the technology used by Scarborough Power.

Impairing the loan resulted in 909,000 being written off Yorwaste’s pre-tax profit. Had that sum not been removed, the company would have shown an annual profit of 999,800. As it was, they reported 90,800.

When asked if they had loaned Scarborough any more cash since March 31, Yorwaste refused to answer, saying that the information was “commercially sensitive”.

A Yorwaste spokesman said: “Due to the innovative nature of the technology used in the Scarborough Power project, despite best intentions it was always going to take some time for the plant to become fully operational.

“Yorwaste is a minority shareholder in Scarborough Power, which continues to be funded by private investment. As a private limited company Yorwaste runs its business using its own resources and at no stage in this project has there been any impact on local taxpayers.”