Loss-making DERL plant to get £1m from Dundee City Council, 13 December 2010

Cash-strapped Dundee City Council is to lend another £1 million to the loss-making waste-to-energy plant at Baldovie.

By Stefan Morkis, published in the Courier, 13 December 2010
http://www.thecourier.co.uk/News/Dundee/article/8600/loss-making-derl-plant-to-get-1m-from-dundee-city-council.html

The policy and resources committee will be told tonight that Dundee Energy Recycling Ltd (DERL) is being given the loan, which is not repayable until 2020.

It was reported this year that the plant is around £42 million in debt and makes losses of around £500,000 a year.

A report by Audit Scotland claimed DERL is financially dependent on the council, which owns the plant and leases it to DERL for an annual fee.

It warned that increased support may not deliver value for money but the city council maintains it would cost far more to bury waste and landfill rather than burn it at DERL.

The council claims it would spend £22 million more over the next five years without DERL.

Dundee City Council has already invested more than £5 million in DERL in the form of an interest-free loan, which was later converted into shares. The council also gave a loan of £2.3 million, with interest, in 2004 to keep the plant open.