Viking concerns (Sustainable Shetland)

Sustainable Shetland welcomes the displeasure voiced by Shetland Charitable Trust trustees Theo Smith and Bobby Hunter regarding Viking Energy’s refusal to compensate home-owners adversely affected by the Viking windfarm project, should it go ahead.

The Royal Institute of Chartered Surveyors’ reports are at best inconclusive about property prices and windfarms. See the UK parliament briefing note: www.parliament.uk/briefing-papers/SN05221.pdf.

In Denmark (www.ens.dk/en-us/supply/renewable-energy/windpower/onshore-wind-power/loss-of-value-to-real-property/sider/forside.aspx) and Germany there is an implicit recognition that windfarms do affect property values, and there have been cases of precedence in the UK where those affected have proven devaluation of property with a subsequent lowering of council tax.

Meanwhile the structure of the Viking Windfarm ownership has become murkier, with two Shetland-based companies (VEL & VES LLP) involved. We are concerned that the latter is now to have five paid directors, each earning apparently £20,000-£25,000 per year. It is not clear what the directors of VEL will earn, or how many directors of this there actually will be.
We understand that the reason for creating this structure was to allow VEL to “gift aid” future profits to SCT tax-free (www.shetlandtimes.co.uk/2012/02/21/viking-energy-to-be-restructured-to-keep-any-profits-tax-free), but we question the need for perhaps at least eight paid directors to be appointed when the assumed profits are still several years away from being made.

We assume also that there will be costs attributed to the Institute of Directors which was engaged to advise on the new make-up of directorships, and to the “recruitment consultants” who will aid the VEL board in appointing VES LLP directors.

These sums of money, and the rest of the approximately £13 million released so far by SCT for the windfarm are routinely described as an “investment”. To date there have been no returns on this expenditure. All returns are speculative, based on figures supplied by consultants Quayle Munro Ltd., whose track record of financial management is now highly suspect (www.heraldscotland.com/business/company-news/quayle-munro-shares-fall-by-15-on-profit-warning.17825628; www.bbc.co.uk/news/uk-scotland-scotland-business-19003368).

Nonetheless SCT has a majority shareholding in both VEL (100 per cent) and VES LLP (90 per cent).

It is common practice for trustees to instruct the directors of subsidiary holdings. If they fail to carry out the instructions of their parent organisation, they can be removed and replaced by more competent directors.

We hope that trustees will take this to heart and head, act responsibly and not prevaricate in their dealings with Viking Energy, whether it is a matter of compensation, health impact assessment, or the risk of peat slides.

That the health impact study asked for by SCT only merited three lines of a progress report in the recent SCT meeting is, frankly, scandalous. We are conscious that a study – by the Institute of Occupational Medicine – was commissioned by VE as long ago as 2008. VE chairman Bill Manson is apparently on record (BBC Radio Shetland, Thursday 30th September 2010) as saying it had been done. Other VE sources said it had been cancelled or could not be done. The truth of this matter should be revealed to the public.

Regarding peat slides, it is incredible that neither SCT nor the SIC has apparently taken any action over the recent life-threatening events at Uradale, let alone others that have occurred recently within and without the proposed VWF footprint.

VE’s peat stability assessment (in its Environmental Assessment) identified – from a desktop assessment – 50 locations with significant risk of peat slide. Because “the size of the wind farm site is such that it was not practicable [sic] to conduct ground investigation works for all highlighted or substantial risk locations” (ES Appendix 10 p.72), only 11 locations deemed to be of significant risk were subjected to ground investigation.

It was then determined that if sufficient mitigation measures were put in place (such as micro-siting of turbines and roads, restricted earth moving activities, and reducing grazing pressure, etc.) then all 50 sites could be deemed as of insignificant risk. We would argue that such conclusions and mitigation measures are utterly insufficient, particularly as at least two recent peat slides in the Nesting area were close to such sites (Runn Hill and Flamister).

The cavalier attitude demonstrated so far by VE towards compensation, health and peat slides also puts at risk financial investment. The costs to the project, if for example, a major peat slide caused by engineering works were to destroy property and infrastructure should not be underestimated.

Finally, we wish to remind SCT and the public that Sustainable Shetland has lodged a petition for Judicial Review of the Scottish ministers’ planning consent for the Viking windfarm. This is no cynical manoeuvre: there are, we believe, serious questions as to the legality or justice of this consent, and these have been corroborated and petitioned by our Queen’s Counsel.

The Court of Session has granted a hearing, and we would like to take the opportunity to thank our members and supporters for enabling us to take this course of action.

Andrew Halcrow
Chairman,
Sustainable Shetland,
Burra Isle.