Taxpayers hit with £5.25m bill for botched power station contract

Taxpayers will foot the bill for a £5.25m settlement after a legal claim over the awarding of a demolition contract for Aberthaw power station, a committee heard.

The Cardiff Capital Region (CCR) lost a high-court legal challenge brought by a losing bidder, Brown and Mason Group, which concluded in February.

The former coal-powered station, near Barry, was acquired for £8m by the city region in 2022 as part of the £1.2bn city deal, with contractors Erith beginning demolition work last year.

Today, Mary Ann Brocklesby, who chairs CCR – made up of ten councils in south-east Wales – gave an update to the Senedd, telling the economy committee: “The amount of the settlement for the Aberthaw demolition procurement process… was £5.25m.

“I’m not able to say much more at this point because we are undergoing an independent review which we commissioned as political leaders to set in train precisely at the point that we knew we were going through a legal process.”

• Explained: What is the Cardiff Capital Region?

‘Legal caveats’

Cllr Brocklesby, who leads Monmouthshire Council, said: “We had to wait until that legal process was over before that independent review could start. “We are awaiting the findings which – subject to legal caveats – we will be making public.”

Kellie Beirne, chief executive of the south-east Wales CJC and CCR, added: “We’re taking this extremely seriously, we recognise the gravity of it and again yes, [it’s] something that we don’t come and report.

“Apologies again for the short notice but we had clearance, we briefed our internal stakeholders and we felt it important to be as transparent as we possibly could by conveying that this morning at this committee.

“As Cllr Brocklesby has said, we have now commissioned a full independent review – emphasis on independent, that’s really important – we’ve stayed in lockstep with Audit Wales throughout this process.

“When that review concludes and we have findings, we’ll be able to be much more open about what happened and take steps to ensure that this can’t happen again.”

Asked whether the court case has impinged on work at the 500-acre site, Cllr Brocklesby insisted: “No, it continues at pace.”

‘Wider ecosystem’

Andrew RT Davies, the Conservative chair of the committee, said: “When you came before this committee in September 2023, Kellie you said that £40m is but a drop in the ocean.

“I think the words you used were hundreds of millions of pounds will be required. Obviously, this court case has not helped instill confidence in the private sector in coming on board as partners… so, how are you progressing in that goal?”

Cllr Brocklesby replied: “Let’s look at the wider ecosystem of CCR: one of the absolute strengths of it is that we have people across the region who are highly valued within their own sectors… who are highly respected not just in Wales but globally.”

She added: “In terms of the future of Aberthaw, it does actually look very bright and we’re not feeling any effects from the impacts of this highly regrettable procurement issue.”

Ms Beirne said the CCR does not have deep enough pockets for what Aberthaw requires following the initial demolition and remediation phase.