Taxpayers face £62m mine clean-up bill

TAXPAYERS in the Scottish region of East Ayrshire may be left with a £62 million mine restoration bill following the collapse of Scottish Coal and Aardvark (TMC).
Taxpayers face £62m mine clean-up bill Taxpayers face £62m mine clean-up bill Taxpayers face £62m mine clean-up bill Taxpayers face £62m mine clean-up bill Taxpayers face £62m mine clean-up bill

Courtesy Scottish Coal.

Staff Reporter

A report to the East Ayrshire Council on Friday revealed there was not enough money set aside to cover the cost of clean-up and land restoration at the companies' open cast mines.

Coal companies have a legal responsibility to place bonds with the local government in order to pay for clean-up and restoration costs. But the council’s report revealed the bonds would not cover the likely expense.

Scottish Coal entered into liquidation last month, with Aardvark succumbing this month. KPMG is handling both liquidations.

The report said KPMG estimated total restoration costs for the East Ayrshire sites "in the region of 48m to 90m pounds".

The value of the bonds held by the local authority is just £16.1m for Scottish Coal sites and £11.52m for Aardvark sites, leaving a potential shortfall of £20m to £62m.

The report stated that while the estimates might currently “be unreliable, they indicate significant liabilities" and said that "there is currently no certainty with regard to the extent that bond providers will honour the bond obligations".

The council has hired consultant mining engineers to undertake a review and provide their own assessment of the potential costs. Their full report is due by June.

In a statement, the council said Hargreaves Services, the preferred bidder for the Scottish Coal sites, wants abandon "extensive areas" of unrestored land but that approach is being "vigorously challenged" by the council.

"The coal operators have failed to live up to their responsibilities and East Ayrshire Council will leave no stone unturned in minimising the effect of this situation on our communities and on the council itself,” council leader Douglas Reid said.

"It is vital that we work with other councils affected - South Lanarkshire, North Lanarkshire and Midlothian - to try to stop the liquidators and Hargreaves from abandoning these sites.

"We have never shirked from our responsibilities and we never will, but everyone has a role to play and in recognising how vital the coal industry is to the economy of our country. I am particularly appreciative of the initiative and leadership taken by Fergus Ewing, minister for energy, enterprise and tourism, in establishing the Scottish Task Force and involving Westminster government departments and our local members of Parliament."

Reid welcomed a proposal by the council's chief executive Fiona Lees to independently review the planning process.

"We must, however, never lose sight of the fact that it was the responsibility of the coal companies to clean up behind themselves and restore their land - they didn't do this and they have reneged on their responsibilities to our communities," Reid said.

The anti-coal campaign group Coal Action Scotland said the East Ayrshire Council must take its share of the blame for the liabilities because it failed to enforce planning rules.

"The restoration bombshell has finally been dropped - in East Ayrshire alone the shortfall could be up to £60m,” the group said in a post on their website.

"What about South Lanarkshire, North Lanarkshire, Fife and other areas? We're looking at a £100m bill that will be dumped on the public purse.

"The mining companies have failed in their statutory obligations, but local authorities should have been enforcing the planning rules, and in this they have failed tragically. East Ayrshire Council are to blame as well as Scottish Coal and ATH Resources (Aardvark)."

The Scottish Greens are also calling for government action to ensure that mining companies are held to their responsibilities.

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