Eishken windfarm

An anonymous wellwisher advises me that the windfarm at Eishken has been sold; lock, stock and wind tower to EDF (Électricité de France).

Update: I'm told the E in EDF is wrong.  I must be being stupid, but ???????

I'm told that the missives are being concluded currently, and that they will be signed off shortly with transfer expected on 1 August.

If true, given the vast sums required to develop windpower, this shouldn't come as any surprise as the risk/reward trade off must be very high for any individual.  Especially with the huge probable costs and legal issues involved in constructing any power cables from wind farm to grid connection.

The EDF website makes it's wind strategy very clear, and with the pattern of consents seemingly being more valuable than the completed windfarms, it is likely that the buyers need renewables to offset their other (nuclear and conventional) emissions.


The nature of this sort of transaction is that there are few if any footprints until the deed is done, but my delving shows that there have been some changes in the structure of Beinn Mhor Power and associated companies recently; which leads me to believe that something is in the offing.

Beinn Mhor Power has very recently appointed Ms Serena Oppenheim as a director, and issued some more shares (I haven't got round to finding out about these changes yet).  In the last month, Eishken Nominees Ltd has replaced the Nominee Shareholders at McLay Murray & Spens with Nick Oppenheim, Serena Oppenheim and Peter Smith - who I believe is the Estate Manager - and moved the Registered Office to Eishken.  All of which is indicative of some active plans being brought forward.

Update: Crionaig Power Ltd had 3 x Miss Oppenheim appointed as directors in February along with Marcus Trenick QC - of windpower fame.  Loch Sealg Power Ltd was incorporated in October 2010 and is dormant.

I'm sure there is still another company, whose name escapes me at the moment.

Of course, there could be another explanation, but my source is utterly convinced and convincing that a sale is to proceed, so only time will tell.  And where does this leave the Community Trust?

All will become clear very shortly, I suspect.

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Reproducing this article is forbidden, without my permission and then only if your fully attribute the source.  Newspapers on Francis Street, Stornoway, should remember Johann Hari before plagiarising me.

Eriskay School

These poor parents in Eriskay must be confused about the actual status of the school closure, er... discussion, er... consultation, er... whatever, er...nothing at all

According to the Bleader's Log (as it is affectionately called in the Executive Corridor), the initial discussion about the school, was not a discussion about the School in Eriskay but a discussion with the community about education provision in Eriskay, that may or may not included a discussion - and most definitely not a consultation - about the school in Eriskay.

Further clarification of the clarification makes it perfectly clear that the planned discussions weren't going to happen anyway.  At least not in the terms that were previously de-announced.

That this contradicts the position taken by the Comhairle at it's last meeting, and reiterated in private at the COSLA Meeting, and explained to Members as the outcome of the COSLA decision is neither here nor there.  I saw some of the detail last week from the unusual sources.

As the Bleader puts it:

Parents deserve to have the correct information.

Perhaps an FOI to see the internal emails and discussion might help the parents have the correct information.

Make no mistake, education provision in the islands needs reform - that's code for rationalisation, or closures - unless the birth rate picks up dramatically, but the least the Council can do is be honest about it and point out that the absence of kids is not conducive to the continued existence of a school.

The moratorium might not be right, or fair, or economically advantageous, as far as the Council is concerned, but the Government wield the big big, big stick and sometimes a different approach is required.

(Declaration of interest: I first went to Eriskay about 1975, and I loved the place.  Even just driving through it is blissful.)

Pairc - the saga continues

With Thursday seeing the next round of the legal actions in Stornoway Sheriff Court it seems fairly clear what the pattern is going to be.

The legal actions are going to be long and drawn out.

The Government have already acknowledged that the legislation is flawed, which I think means that they are on a hiding to nothing in Court; but that they will drag this out until they can decide how to rewrite the legislation.

The landlord has apparently offered the crofters an amicable buy-out, if the existing Committee remove themselves.

This last element is the most intriguing, as it shows the animosity between the existing Committee and the landlord, and represents a very smart move by Mr Lomas.  Will the existing Committee withdraw and challenge Mr Lomas to stand by his word?  Well, with silence from South Lochs, it looks like that offer has been rebutted; and that no-one seems prepared to try and knock heads together and get legal paperwork in place.

The animosity can be explained by the claims of self-interest against the Directors of Pairc Trust, in that it is claimed by Barry Lomas that the suggested siting of some turbines will give disproportionate benefit to those crofters, some of whom may be the Directors of Pairc Trust.  Let me make it very plain, M'Lud, that I do not know whether these claims have any substance, but that the Directors strongly rebut this argument.  I am aware of some matters they need to refute, rather than just rebut, but I am not aware of any substantive attempt to demolish these arguments.

And, yes, I know I have said all this before, but for the reasons that follow, these arguments need to be demolished if the Pairc buyout is to have the widest possible support; and credibility lies at the heart of that.

I was reading back through the Pairc buy-out Business Plan just recently.  It's been apparently removed from the Pairc Trust website, but if you find the old cached pages on Google, the now-deleted links still took you to the pdf; which you could download for posterity.  This probably won't be possible after tomorrow.


Page 49 of the plan - as approved by CnES and the Scottish Government - has a most interesting comment on the type of holidays that Pairc Trust will be offering to the public:

A short break (3 days) with meals would cost in the region of £200 per person per night. Extra
charges would be levied depending on which activities the holidaymakers would be enjoying.
This is averaged to 20% on top of the accommodation costs.

So a couple coming for a 3 day break would spend £1,440 - which one assumes includes ferry costs, but not petrol - instead of perhaps £500 in a 5* hotel in Edinburgh (Scotsman, advance purchase rate) of £900 for a week in Crete (Thomas Cook, Aghios Nikolaos in October).

Now why is this important?

Simply because the business plan assumes that for a one-off outlay of £9,000 (what no recurring marketing costs?), Pairc Trust will be able to sell 150 bed nights the following year, generating income of £6,000.  I did mention the 20% commission the Pairc Trust will take (at page 49), didn't I. 

The Pairc Trust as promoter would take a fee (e.g. 20%) from the holiday price to cover
promotional and organisational costs and the costs of the activities while the partners in the
enterprise would benefit from increased reliable trade and collective marketing of their local
businesses.

Now, current tariffs for B&B or self catering in South Lochs are £25 per night or £250 per week for an entire cottage; or about £50 pppn in the only hotel in the area.  All of which raises all sorts of questions about the supply of suitable accommodation, given that to upgrade is going to cost £60,000+ for the majority of current providers.  My rough and ready guess is that it will cost perhaps £1.2m to provide enough suitable accommodation in the area or as little £250,000 if there is only one new-build provider.  Where is all this going to come from on the hope of getting bookings through an untested provider selling beds in an unbuilt facility?

Realistically, you can see a new provider or two trying to fill that market; but when they can sell the beds direct or via VisitScotland, why go through the Pairc Trust.

That is just one example I have seen of an element of the business plan that has been allowed to go through, and which is being touted by local and Central Government as a model of sustainability at which large sums of money should be thrown.

If the Pairc buy-out is to succeed it must succeed on a realistic basis, and not on fantasy figures, or Barry Lomas will tear this all to pieces in Court and discredit the entire process.

Unless, of course, that gives the Government their out from the entire process and time to rewrite the laws; which the cynic in me thinks might just be the case.

Whatever happens, Pairc is going to face a long slow decline as the legal process takes it's slow and winding course; something I don't think anyone wants to see.

Council finances

I think I speak for the vast, vast majority of people in the Western Isles when we applaud the Council for the single minded determination in pursuing their support for the Coastguard Station.  Just as we all supported and applauded the efforts of the Council over the Rocket Range.

Everyone in the islands believes that this is one of the key roles of the Council, and one at which we probably all think that has almost (almost!) a limitless budget and where public support and understanding of the role of the Council can best be focussed.

So let me say "Well done" to all concerned, before I highlight the problems going forward.

If anyone was in doubt about the financial problems facing the Council, then they should read the rather understated Finance Dept reports, where the stark truth is laid bare.  The 'strategy' document is a master of obfuscation in very few words (it's probably a trait of accountants).  The presentation to members on the other hand lays the options bare [including the issue of local election next year which will undoubtedly coulour the decision making process for some]

The Council faces massive cuts in Central Government support over the next few years, and the choices are hard but the impact will be deep.

I take no pleasure in pointing out that I suggested preparing for this a year ahead of the first round of cuts being implemented.  That might have stretched the pain a bit, but it certainly won't ease it.  The next three years will see major and fundamental cuts in the Council, and staff, unions, senior officers and Councillors better realise this.

The easy targets, such as Ceolas, will be the first to go as the various funders pull their funding - death by a dozen cuts -whilst compulsory redundancies will be absolutely necessary to streamline the Council. 

Indeed, fundamental reorganisation is essential.  I would believe that it might happen if the reorganisation started by the Chief Executive in 2006 had actually come to any sort of conclusion by now; rather than being brushed under the carpet, half-done (quarter-done?).

There is going to be the loss of some services too, but these could be mitigated of the Council actually tried to find best value solutions, rather than finding the 'most acceptable' solution.  I am aware of two recent decisions where a financially more expensive and less efficient solution has been implemented.  Both are unquestionably due to 'political' decisions, and one undoubtedly benefits a senior individual personally; although the way it was done with official support or purblindness makes it just inside the rules.

All of this is going to have to go, if for no other reason than it is going to become more transparent and more public, but we face major cuts across the board that will need to be properly implemented, if we are to have a living, working, smaller Council at the end of it.

The Political fall-out from the cuts is for another day.

Blar Buidhe

Here is a tale of murky financials; tax dodges; and financial engineering above and beyond the call of reality.

Let's deal with the facts, first.  The property is owned by NHP Securities No 3 Ltd, a name that is as vague as the ultimate ownership.

NHP Securities No 3 Ltd have fixed assets worth £540,000 (recently - desperately - revalued from £535,000) which surely has to be Blar Buidhe and Blar Buidhe alone.

NHP Securities No 3 Ltd is ultimately controlled by Libra No 2 Limited, registered in the Cayman Isles, and hence to Delta Commercial Property LP, and limited partnership based in the Isle of Man.

At this point forget trying to find out who owns these companies; you can't unless they want you to.

But that's not the shocker.

Against the asset of £540,000 the company has borrowed £215,000,000; yes, a leverage ratio of 400 times assets, most of which has been used to invest in other apparently associated companies through loan notes, guarantees etc etc.  Unsurprisingly, you will find that the company is insolvent by £215,000,000, although various guarantees and promises seen to imply that these debts will never be paid.

So how and why does this make any sense.  Well, of course, in the real world it doesn't.  But here is how it works in practice....

Company A buys a property

Company B buys that assets from company A

Company A lends the money to company C in the Cayman Isles

Company C lends the money back to Company B

Company C charges 10% interest for the loan

Company A charges no interest

The interest is earned offshore, and as ultimate control resides outside the UK the interest is not taxable in the UK

The interest paid by B is a tax deduction, and the tax losses can be used to create a tax refund or tax deduction in other companies.

As the profits pile up, the loans get bigger and bigger, and the interest all moves tax-free offshore; to fund the next property.

Blar Buidhe apparently paid £24,050 rent, which has probably, ultimately, ended up tax-free in either the Cayman Isles or the Isle of Man.  If it hasn't, I'd be astonished.

That's £24,050 that could have gone towards care in the home.  That's £24,050 that has been paid by pensioners out of their meagre assets.  That's £24,050 that should have been taxed and been used to fund care, education and public services.

And multiply that through by 700 care homes, most of which are very considerably bigger.

Isn't it a scandal that the public sector is effectively funding and encouraging [perfectly legal] tax-dodging?  Bizarrely, it all started with the Inland Revenue and Mapeley Steps Ltd.

At it is going to get worse.  There is a current active proposal, which is out for consultation, allowing offshore UK-controlled financing companies to pay a tax rate of under 10% on the money they draw out of the public and private sectors.  And almost no extra tax on trading income 'earned' in tax havens.

If there is a lesson to be learned from Southern Cross, and an opportunity to be grasped, it is that public sector funded transactions must be transparent, and must avoid tax-havens.  It is easy to do; just write the conditions into the tender and demand the waiving of 'commercial confidentiality' and rebuild trust between providers and funders.

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All this, and still on holiday too.

Royal Mail sorting office

I see that the old sorting office on Sandwick Road has been sold to "D MacLeod" for £249,999.

Can anyone shed more light on the buyer.

I'd been told that the Council had a planning application for this site, but nothing is coming up and I think it might just have been an informal pre-application discussion.

COSLA unConvention

It's almost too easy to abuse the Council, and it is very easy to find reasons to dole out that abuse, but sometimes you have to genuinely applaud the successes.

The COSLA Convention is a case in point.

Whilst it might seem to many like a series of all-expenses away-days in exotic locations like Hamilton and Kirkcaldy, these meetings are a necessary evil in building a consensus in local Government politics.

Many will complain about the hire of An Lanntair for the day; the travel expenses; the dinner in Breasclete with dancers (no not that sort!!!) and music; but I take the view that it is money broadly well spent.

Yes, it could all be done more cheaply, but if you want to show the great and the good what the islands look lie and get their understanding of the issues, then you have to splash the cash.  That many of the issues discussed bore little or no relation to the islands is irrelevant, it is about calling in the factors and the understanding of the local situation when needs must.  "Softly, softly, chatchee monkey...."

The sight of the Councillor suits walking around town last Friday morning was quite enlightening as they nursed hangovers (practicing for that night) and as they tried to remember if they were in Stranraer or Stornoway.

Anyway, my off-island sources tell me that it has raised the profile of the islands in a positive light, which can only be a good thing.

One attendee was so taken by the islands that he began impromptu Gaelic lessons on Friday with a local linguist which continued back in the hotel and late into the night.  Indeed, the lessons kept his neighbours awake late into the night, and early in the morning, but seemed to be highly successful as far as both parties were concerned.

Thankfully his plane was the last flight out, which allowed time to have an urgent refresher course.

I know the hotel; I know the Council concerned; but help with the name should be sent to my private email address.

For legal reasons, names of real Councillors posted as comments will obviously be deleted.  Unless they are so humorous/ludicrous as to pass the usual sanity checks.

Leaders Blog continued

Good work by An Cat Dubh, who posted onto their intial thoughts onto the Leaders Blog....

I am sure that the whole community can only agree with this, yet somehow the comment seem to have disappeared....

Douze points.

Leaders Blog

With most of the known world desperately trying to access the Leaders Blog using string, tin cans and half charged duracell batteries, the IT department were able to spare some bandwith to allow me to receive the photos that didn't make it onto the blog.

None of these have have their aspect ratios changed in an effort to make The Leader look taller....

(Thanks to Anon Smith for the photos)