Viking confirms lease deals after property website’s land sales error

Viking Energy has signed leases potentially worth millions of pounds with several land­owners for ground to be used if the 103-turbine windfarm goes ahead.

The agreements came to light after a number of people in Shetland were this week bewildered by information published on the www.myhouseprice.com website, which appeared to suggest Viking Energy had made over £33 million-worth of land purchases in the islands.

The website, which has permission from the Registers of Scotland to publish extracts of the Land Register, appears to have mis­takenly presented “sale” prices for deals which are in fact 25-year long lease agreements.

It quoted prices of nearly £9 million for the SIC-owned Busta Estate, almost £16 million for the Symbister Estate, just under £5 million for the Burrastow estate, £2 million for the Zetland Estate and £493,000 for the Vementry Estate, as well as more than a dozen smaller “sales”.

In response to an enquiry from this news­paper, a Viking Energy spokeswoman stated categorically that the company had not purchased any of the land in question.

While the company was unable to verify any of the values quoted, she said it was likely that the figures attributed to the transactions in fact corresponded to “lease agreements that have been signed with various landowners”.

The spokeswoman said: “It is possible that the sums quoted could be the total value of the leases, which would be the annual rental pay­ment multiplied by the number of years’ duration rather than the cash value of the transaction.”

SIC political leader Gary Robinson said the house price website had been brought to his attention by some councillors, who were con­cerned that a £9 million sale of Busta Estate land might have gone through without members’ say-so.

He said: “I’ve spoken to assets and property and there’s absolutely no question that we’ve sold anything to Viking Energy. It’s all leases. Certainly none of it has been sold.”

It has previously been reported that land­owners and crofters whose ground was used for the windfarm could pocket anything up to £8 million a year in direct payments. Other than some nominal access payments, no money would be paid out until construction of the windfarm commenced.

It is unclear how the aggregate figures for the leases have been arrived at, but the sums land owners and crofters stand to gain will partly depend on how productive the turbines are should the windfarm get up and running.

In October 2010, it was reported that eight major land owners and some individuals with smaller parcels of land would share out an estimated £3.9 million a year. A big chunk of that would go to the council through its Busta Estate, but other major beneficiaries will include the aforementioned private estates.

Annual payments of up to £4 million could be shared between around 350 crofters, with the size of payments varying depending on whether the land is used to site turbines or forms part of Viking’s proposed habitat man­agement plan.

A series of meetings was held with crofters this summer to discuss suggested fees, which then have to go before the Scottish Land Court – a process designed to ensure crofters’ inter­ests are safeguarded and reasonable compen­sation payments are made.

Meanwhile, Sustainable Shetland’s appeal for a judicial review to be held into the Scottish government’s decision to grant consent for the windfarm will not be heard until early next year.

The protest group, which has over 800 mem­bers, is challenging ministerial consent for the controversial project on various grounds. They include the potential impact on protected species and landscape and the fact that demands for a public local inquiry were not heeded.

An initial Court of Session hearing had been pencilled in for 24th October. But the court confirmed to The Shetland Times this week that a four-day hearing is now scheduled to begin on 29th January 2013.

Sustainable Shetland vice-chairman Frank Hay said that in the meantime the group would be continuing with various fund-raising activities to cover its legal costs.

Energy minister Fergus Ewing gave consent to the project in April, after which Shetland Charitable Trust approved its £6.3 million share of the £14 million budget needed to get the project ready for construction. A final deci­sion on whether to proceed with building the giant windfarm remains up to two years away.

Meanwhile, those in charge of the Shetland Community Benefit Fund are trying to nego­tiate an increase to the proposed £1.85 million of annual payments from the windfarm. The payments would be separate from the profits the charitable trust hopes to earn from Viking.

Benefit fund representatives held their latest meeting with Viking and its partners SSE on Monday night, after which fund chair­man Bobby Hunter said no final agreement had been reached.

More meetings are scheduled for later this autumn and Mr Hunter did not want to go into any specifics at this stage. “We’re in negotiations with them and we’re waiting for their response,” he said.

Viking project manager Aaron Priest said the company had been “very impressed by the substantial amount of work which has gone into creating an organisation that could act as a suitable vehicle for managing the Viking community benefit funds”.

Mr Priest said: “It is early days as it will be some years before the fund is established, but we are keen to continue what has been a very con­structive dialogue and to have every­thing in place to allow us to launch the fund once construction of the windfarm begins.

“The windfarm has significantly fewer turbines than were originally proposed, which has a knock-on effect on the value of the community benefit fund as this is calculated on the basis of the windfarm’s capacity to generate electricity, its ‘installed capacity’.

“This potential reduction in the value of the community fund has been offset because we have committed to double the value per MW installed to £5,000 per MW, which equates to £1.85 million per annum.”