by billhoult on 22 December, 2009
Yorwaste is a waste management company that is wholly owned by the Public Sector. Over 70% is owned by North Yorkshire County Council and the rest by York City Council. For many years the company has pursued a cautious approach to investment and waste management. However in 2007 it entered into a partnership with a Company called Scarborough Power to erect and run a pyrolysis power station with the aim of incinerating waste. Yorwaste now own almost 25% of Scarborough Power and the project which was intended to come on line by 2008 is in difficulties.
The problems are so great that Scarborough Power is now covered by a Company Voluntary Arrangement (C.V.A.) which is an alternative to going into liquidation.
Yorwaste up to this time has loaned Scarborough Power £2.5M and due to the problems with the project has decided to impair (write off for accounting purposes) £909K of the loan with a hope that the power station will finally work. This has led to Yorwaste cutting the dividend it pays to the County Council and York City Council by half from £2M to £1M.
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North Yorkshire County Council has itself loaned Yorwaste £3.7M for an indeterminate period to help it through its current difficulties. My concern is that North Yorkshire taxpayers are being asked to pour more money into a venture without a clear idea of the stability of its future revenue income. Much is made of the fact that the power station is just one element of Yorwaste’s business but it is important that this year the Company’s operating profit was considerably reduced.