The Tory Tees Valley Mayor Ben Houchen and the four private co-owners of Teesworks Ltd, have just wasted a likely £4.3mn of public money in legal costs trying to shake-down PD Ports in an access case.
A reasonable person might assume that the drama is over and Teesworks Ltd’s co-owners would draw a line under the case and move on. But it is not to be. Teesworks Ltd has lodged papers for an appeal and we have “Teesworks Access: The Sequel” to look forward to in a few months’ time.
Chris Musgrave and Martin Corney are the two leading players in Teesworks Ltd, a public-private joint venture created by the public South Tees Development Corporation (STDC). The firms controlled by the developers and their two associates were gifted 90% of the company.
So far they have made £108mn out of the regeneration of derelict, polluted steelworks land now also called Teesworks, near the mouth of the Tees. Their income is from scrap sales, land deals and consultancy fees.
The Teesworks site will form the hub of the new Teesside Freeport.
If Teesworks Ltd and Houchen’s public South Tees Development Corporation had won the access case, PD Ports would have had to surrender 90% of fees charged to future tenants of the Teesworks land.
Musgrave and Corney (and partners Ian Waller and Chris Harrison) were due to earn up to £208 mn in consultancy fees and income from the PD Ports access decision.
It is no wonder then that the entire High Court decision that went against them on access is being appealed by Teesworks Ltd.
We are assuming that Teesworks Ltd will foot the legal bill if they lose again and as the company is still 10% public-owned, the appeal will incur further public expenditure.
The legal costs will eat into the Teesworks Ltd balance sheet, affecting maximum dividends for the businessmen.
But if we question whether Musgrave and co had any right to their free 90% of Teesworks Ltd, we could say that the public purse is in fact footing the entire bill.
A bizarre side effect of the case has been the Case of the Magic Roundabout.. A roundabout for access to the Teesworks site was built on a small strip of PD Ports land (with the latter’s permission). But with the access court case, the PD Ports ownership created a potential Mexican stand-off, with the possibility of the company launching their own ransom-strip shakedown against Teesworks Ltd and STDC.
So there was a plan to move the roundabout (cost £300,000) amidst allegations that Redcar and Cleveland Council was blackmailed into compliance with the threat of withholding Tees Valley finance.
“However, North East Bylines are told that the yet-to-be moved roundabout still covers the handkerchief of PD Ports land – thought to be in the region of 3 square metres. Should the patience of PD Ports wear thin, we could still see the Mexican stand-off in action and handbags at dawn in the courtroom.
Meanwhile in the House of Commons, more bad news for Mayor Houchen. His elevation to the House of Lords as Baron Houchen of High Leven has not protected him from the Commons Business and Trade Committee who have urged that the National Audit Office investigates the use of public funds at Teesside Freeport.
Some £560mn of public money is being spent on remediation of the Teesworks site, none by the businessmen.
