Just written this to our local paper:
Good to hear the idea of surcharging the councillors who voted for the
ill-fated incinerator project being raised again. To us electors the
fact is that a Tory majority on Norfolk County Council voted for this
contract despite it containing what amounted to a blackmail clause: "If
you don't give us (Cory Wheelaborator) planning permission you will have to pay £20m
compensation".
Now it is reasonable with such a huge project that a risk premium is
included but it is surely usual to limit this to a maximum amount and to
pay it only against invoices for costs incurred plus an amount for what
a contractor would call 'lost opportunity'. This equates to losing the
opportunity to use their expertise and skills to bid for other work
because of the indicated project.
Back at the time I wrote and the EDP published criticism of this
contract, which I took the trouble to read (its on the NCC web site). In
January 2011: "NCC is the prime mover and
customer for this project. It has already acquired the site. But
it is also the
planning authority. And get this: if planning permission is not given
NCC will be committed
to paying Cory over £20 million for their trouble so far.
In effect Cory has a risk free business model. They
get a guaranteed customer and major contracted usage (175k tonnes)
but if it does not go ahead all the designs, planning
environmental investigation costs are covered by the penalty. I do
admire them."
And a year later: "If, as many of us fear, this project turns
out to be ill-judged because recycling progress reduces the amount
of 'waste to burn' below the contracted level and the commercial
sector decides The Willows price is too high and Norfolk County
Council has to start paying penalty money to Cory Wheelaborator
maybe it will also only be the ten wise members who end up getting
the blame. Hate to be them if they end up being surcharged."
Nothing new then. In fact as long ago as September 2007 Norfolk
County quoted the 10% risk premium and the 10% construction cost
contribuition at £16.8m. One was index lined, the other not.
The Tories knew what they were doing since their officers drew up the contract. And still they did it. So make them pay, say I.
