You can read Part One, an introduction to Teesworks here. In this part I’ll analyse the key role played by Joint Venture partners Chris Musgrave and Martin Corney in the acquisition of land at Teesworks.
Land snatch
Picking up from Part One, the area of land at Teesworks extends to about 2,400 acres. 2,402 acres to be precise. The 2019 STDC Master Plan mentions ownership of 2,600 acres, but there are two key errors in this assumption. Firstly the acreage total includes the 284-acre Redcar Bulk Terminal (RBT), which is owned by SSI plc. JV partner Chris Musgrave repeated this error on his blog, closely followed by projecting an astonishing 45,000 jobs for Teesworks.
The second error is the assumption that Teesworks owns this land. It doesn’t. All of the land belongs to the STDC. But 2,402 acres is still an impressively large plot of land compared to the fantasy 4,500 acre version that is frequently peddled. Even more impressive is the way in which the STDC acquired it. Read on.
See you in court
The STDC’s land is made up of three separate parcels. Firstly, on 7 January 2019, it bought 1,420 acres of land from Tata Steel Europe for £11.5mn. Ben Houchen and the STDC then began negotiations to buy land belonging to Thailand based Sahaviriya Steel Industries (SSI), who had occupied the most recent manufacturing sites until they went bankrupt in 2015. SSI’s backers, mainly banks based in Thailand, were facing an almost total write-off on their SSI loans, and were determined to recover at least some cash by getting a reasonable price for the land. But Houchen was equally determined to acquire the site, and the following month he instigated Compulsory Purchase Order (CPO) proceedings.
Compulsory purchase
Houchen’s attempt to bulldoze the Thai banks didn’t work.The fraught series of negotiations dragged on for nearly a year, with a CPO court hearing scheduled for 21 February 2020. Two weeks prior to the meeting, on 7 February, the SSI and the STDC met for the last time before the CPO hearing. At this meeting, STDC board member Steve Gibson, also chairman of Middlesbrough Football Club, channeled his inner Lenny Bruce with an expletive laden rant against the SSI representatives.
Gonna make you an offer you can’t refuse
Two weeks after the Steve Gibson meeting, and the day before the scheduled CPO hearing, property developers Chris Musgrave and Martin Corney met with SSI’s representative and brokered a deal for SSI to sell the 870 acre site to the STDC for £1. However, the hearing went ahead to allow the STDC to purchase a separate 112 acre parcel of land from SSI.
Tall tales from the Redcar Bulk Terminal (RBT)
So, how did Musgrave and Corney turn the CPO situation around? The RBT was constructed by British Steel on the river Tees in 1976 to import raw materials into Redcar steelworks. In November 2019 Musgrave and Corney had taken out a three-year lease on a derelict 70-acre strip of land at the RBT for £489,041. This was way before the CPO process commenced and, ostensibly, it was done in order to build an offshore wind project.
A lawyer writes….
Ben Houchen takes up the story: “(Musgrave and Corney) told (me) they owned a significant legal interest in RBT – about 70 acres of land on the right hand side – and SSI were now badgering them to give them that legal interest because they couldn’t really properly redevelop the 280 acres they’ve got without controlling the whole thing. Remarkably, SSI told Chris and Martin that if they gave up the 70 acres that united the RBT site, they could have the rest of the steelworks site in exchange ….So Chris Musgrave and Martin Corney hot-footed it to the STDC and proposed a development partnership.”
He didn’t just say what I think he did, did he?
Get the bones out of that. Was this whole farce a ruse to allow Houchen to do what he always intended? Hand the whole show over to two property developer partners, seemingly without due process or scrutiny? At the same time that he was coordinating Teesworks land deals, Houchen was setting up a similar joint venture at Teesside Airport, with the same JV partners. He arranged for the TVCA to lend £23.6mn to an entity known as Teesside International Airport Business Park Limited. Chris Musgrave and Martin Corney are directors of this company.
I hold in my hand… a piece of paper
On 29 April 2020, Ben Houchen announced that the CPO proceedings had been successful. But, we don’t know when STDC bought the extra 112 acres, or how much it paid for it. Houchen later confirmed that the entire purchase was completed on 8 August 2020. Teessiders had seemingly been saved from an expensive, drawn out court case thanks to this altruistic gesture. Unfortunately, there’s no such thing as a free lunch…
Teesworks Limited
Back in December 2019, Teesworks Limited had been created, although it was known as South Tees Enterprise Limited (STEL) at this time. Seven months later, in July 2020, the company name was changed to Teesworks Limited, and the company address was transferred from Ian Waller’s house near Stockton-on-Tees to Aykley Heads, 20 miles away in the City of Durham. That’s definitely not in Teesside.
The Fab Four
Ian Waller, Martin Corney’s step-father, is one of the four co-owners of Teesworks along with Chris Harrison, although Musgrave and Corney own most of it. The following month, 50% of the ownership of STEL was transferred to the STDC. Houchen later confirmed that the entire purchase of the former SSI land was completed at around the same time, on 8 August 2020 and so Chris Musgrave, Martin Corney and their two junior partners became joint venture (JV) partners in an entity that owned 2,402 acres of land.
The Wrecking Crew
The JV partners set to work on their first demolition job with a vengeance. It wasn’t at the main Teesworks site in Redcar, as many would have expected, but at the former coke ovens site in South Bank. By 15 December 2020, 12 buildings had been demolished and 153 acres of land had been cleared. Houchen and The JV partners were hell bent on clearing this land in order to get a signature project underway. Houchen and the STDC had made a start at this site the year before, but an ill-conceived and hasty demolition job led to the deaths of two workers. Their families are still awaiting an outcome from the HSE to this day.
GE Renewable Energy
The land clearance project bore fruit, and three months later, in March 2021, GE Renewable Energy announced that it would build a wind turbine blade factory at South Bank. The main attraction for the JV partners was the accompanying quay to be built on the river Tees.
Destruction Derby
An extraordinary demolition spree took place during 2021, with a series of photo opportunities promoted like grotesque firework displays. One hundred and seventy five proud years of Teesside steel industry was reduced to rubble as Houchen dreamed of his new Jerusalem. Houchen donned his favourite construction garb, grinned like a Cheshire cat, then climbed into an excavator and launched the destruction of the 100 year old Torpedo Ladle Repair Shop. The Dorman Long Tower, the Redcar Blast Furnace and the Lackenby BOS Plant were then blasted into oblivion in quick succession, with slo-mo clips posted to YouTube for the benefit of destruction ghouls. Ben Houchen gleefully bragged that the BOS Plant explosion could be heard eight miles away.
Tower of strength
Redcar MP Jacob Young had campaigned to save the Dorman Long Tower, but then surreptitiously emailed Culture Secretary Nadine Dorries, asking her to remove its Grade II listing so that Houchen could get on with his pyrotechnics. In an Orwellian twist, Young had chaired Houchen’s Teesworks Heritage Taskforce, to preserve memories of Teesside steel, at the same time that he and Houchen were doing their utmost to obliterate them.
This can’t be right, surely?
Fast forward to November 2021 and the Teesworks share of the joint venture was increased from 50% to 90%. This occurred at the STDC Board meeting three months earlier on 18 August 2021. The joint venture item was redacted from the agenda and no details appear in the minutes. Both documents can be found in ‘Further Reading’ below. Unlike previous, and subsequent, STDC board meetings, nobody from Teesworks attended. Junior JV partner Chris Harrison usually attended these meetings back then, but he didn’t go to this one.
Phone a friend. Okay, never mind, get Michael Gove
Only weeks after the JV partners took effective ownership of Teesworks there was a major setback. GE announced delays to the start of their factory. Ben Houchen whistled past the graveyard while talking to the press but behind the scenes he knew that the game was up and GE weren’t coming to Teesworks. The only success story of Tees Valley regeneration was in jeopardy and the king of Boris Johnson’s Levelling Up scam was in danger of losing his crown. Houchen got on the phone to his mentor Michael Gove and apparently started calling in favours.
When is a Final Investment Decision actually Final?
Back in July 2021, then Business Secretary Kwasi Kwarteng had appeared at a photo opportunity at the Able Energy Park in Immingham. Kwarteng announced that South Korean company SeAH Steel Holdings had made a Final Investment Decision (FID) to build a factory there to build monopiles (bases) for offshore wind farms. Imagine Kwasi’s surprise when, only seven months later, the FID was scrapped, and SeAH switched their monopile factory to Teesside.
Freedom of lack of information
How did Michael Gove and Kwasi Kwarteng persuade SeAH to renege on their Humberside deal? The simple answer is that we don’t know. I submitted numerous Freedom of Information (FOI) requests to Kwasi Kwarteng, Prime Minister Boris Johnson, Chancellor Rishi Sunak, and Levelling Up Secretary Michael Gove, among others within the TVCA itself. They all declared that they didn’t hold any information. Apart, that is, from Michael Gove, whose Levelling Up department refused my FOI request on the grounds that it would cost too much to process.
Ben, Jacob, and the Love Hearts photo op
On 14 February 2022, Ben Houchen and Redcar MP Jacob Young appeared in that ‘Love Hearts’ photo op at South Bank Quay to announce that SeAH had chosen Teesside over Humberside. Since St Valentine’s Day 2022, barely a day has passed when Houchen hasn’t done a love-in insta post about the SeAH factory. But that’s hardly surprising, it’s the only victory for Teesworks to date. Maybe something of a Pyrrhic victory, as it only represents jobs taken from Humberside. Without the SeAH deal, it would have been apparent during the last Tees Valley mayoral election campaign that Teesworks is 2,402 acres of nothingness. Of course, Houchen can always fall back on his tried and trusted Teesside Airport myth. But, the shine is coming off that, too. Five months later, GE Renewables made it official. They weren’t coming to Teesworks.
South Bank Quay
A new quay was to be built on the river Tees at South Bank next to the SeAH factory development, and would be an integral part of it. This explains Ben Houchen’s mad dash to clear the site. In October 2021, the TVCA borrowed £107mn from the UK Infrastructure Bank to fund the quay, then passed the cash to the STDC to build it. The JV partners, via Teesworks Limited then exercised an option to buy the quay for £13.06, as reported by Private Eye:
Ben Houchen later tried to justify this by saying that the land had negative value, and the JV partners were doing us all a favour by taking it off our hands.
Knight in shining armour
Luckily for Ben Houchen, the land for the quay had been valued by Knight Frank estate agents. There is an ongoing court case involving the TVCA and the Information Commissioner’s Office, alongside two other claimants, regarding this. A hearing will be held later this month to determine whether the TVCA has to release the information regarding what value had actually been placed on the land, and who specifically within Knight Frank did that valuation.
Run that by me one more time
Not long after Ben Houchen’s giveaway was reported by Private Eye, he hurriedly claimed that Teesworks had agreed to pay £15mn for South Bank Quay, contradicting his earlier claim that the land had negative value. It later emerged that only £5mn had been handed over, with the remaining instalment due to be paid in December 2025. But the JV partners were quids in any way. They sold the lease on the quay to Australian investors Macquarie for £93.3mn. As Leigh Jones reports for the Teesside Lead, Macquarie will see a return of £146mn on their investment. The TVCA, on the other hand, will see a return of £26 million. But, that’s only if the site remains occupied for the next 40 years, which is unlikely.
Steptoe and Son in the 21st Century
So, the South Bank Quay caper was profitable for the JV partners but they had an even more profitable income stream; the 2,402 acre former industrial complex contained scrap metal. In fact, an almost mind-boggling quantity of scrap metal. This was mainly constructional steel but the most recently closed factories also contained lucrative quantities of high voltage copper cable. The TVCA needs income from scrap metal sales to fill continuing holes in its annual accounts. Of course Ben Houchen ensured that the JV partners would get their cut. Now, how do we quantify this? Luckily a Ben Houchen Facebook post solved the mystery:- 2.2mn tonnes of scrap. The weight of 200 Eiffel Towers! Wait, what?
The Cable Guy
Okay then, the JV partners were given approximately 100 Eiffel Towers worth of scrap metal. If you want to know what 100 Eiffel Towers is worth in cash terms, it’s £50mn, according to evidence given by Private Eye’s Richard Brooks to the House of Commons. (See ‘Further Reading’ below). However, in the 6 December 2024 edition of the Eye (No.1638), Richard estimated that the value of the scrap metal had increased to £60mn.
Vulture capitalism
Five years ago, the Telegraph reported on an obscure dispute between the JV partners and PD Ports, the operators of the ports of Tees and Hartlepool. The partners, along with STDC and Teesworks Limited (spoiler alert: they’re all effectively the same thing) were going to sue PD Ports over access rights to land at either end of Teesworks’ vast estate: The South Gare breakwater at the mouth of the river Tees, and the soon-to-be-built South Bank Quay. What were the JV partners up to? PD Ports, including their predecessors, had exercised these access rights for centuries.
Well, what emerged was nothing less than an attempted shakedown. The Teesworks and the STDC intended to bill PD Ports for access to their own properties, and charge them up to £108m for the privilege, with half of this going to the JV partners. When the case came to the High Court, Mr Justice Rajah saw through this blatant attempt at a swindle straight away, and PD Ports won the case. The STDC decided not to appeal the decision, but the partners wanted to plough on. Six months later the High Court refused their appeal against most of the ruling. On 29 December 2024, Teesside Lead reported that PD Ports’ owner Brookfield had put the company up for sale. This MAY indicate that Teesworks’ legal action has finally ceased.
Waiter, check please!
In February 2024, Mister Justice Rajah ruled that STDC and Teesworks, the plaintiffs in the case, must pay 80% of PD Ports’ costs incurred before 21 September 2023, when an offer by PD Ports to settle the dispute out of court was rejected by the plaintiffs, and 100% of the costs thereafter. The trial commenced on 3 October 2023 and lasted for six weeks. The interim award exceeded £1.2mn with a final award estimated at between £2.7mn and £4mn. STDC is a public body, so we’ll foot the bill for a lengthy legal case that the judge clearly believed should not have taken place. Not only that, but Teesworks and the STDC have made an enemy out of their nearest neighbour, and one of the largest employers in the Tees Valley. The damage shouldn’t be too bad in the long run though. The senior managers at PD Ports are serious, professional, competent people, and they’ve got the measure of the people that they are dealing with.
Parallel universe
All of this could have been avoided. The Conservative government could have taken the £560mn that it has spaffed away on Teesworks to date, and used it to keep Redcar steelworks open back in 2015. 3,000 people would still work there, and all of this would have been a fever dream.
And in another universe…
Ben Houchen could have accepted Able UK’s £130mn offer to build South Bank Quay in February 2022. The TVCA wouldn’t have had to add to its debt pile by borrowing £107mn from the National Infrastructure Bank, and the infamous JV partners wouldn’t have gained control of the project. Ben Houchen inexplicably terminated the negotiation between the STDC and Able UK, despite KPMG having undertaken due diligence which confirmed that Able UK would have had no difficulty in obtaining debt funding to finance the project.
In Part Three of ‘The largest brownfield site in Europe’, I’ll analyse the 11 Teesworks zones, detailing what has happened there in the past, the current state of play, and the future plans for the zones. The plans are hopelessly unrealistic, obviously.
Thanks to James Waterson for contributing to this article
Further Reading
STDC Board agenda, 18 August 2021
STDC Board minutes, 18 August 2021
Richard Brooks’ evidence to the House of Commons
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