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Site Assessment Industry

Volume 615: debated on Wednesday 12 October 2016

On 2 Oct 2015 the SSI steel works in Redcar was placed into compulsory liquidation and an official receiver (OR) was appointed as liquidator. On 12 October, following no buyer for the steelworks being found, the decision was taken by the official receiver to set about the hard closure of the site. Since that time the official receiver has been undertaking a protracted liquidation of SSI, and in the absence of an owner, he has been overseeing the safe and secure hard closure of the site. Government, through the Department for Business, Energy and Industrial Strategy, are currently providing an indemnity to the OR so that he can carry out his duties as liquidator of the company and ensure its ongoing safety and security.

As recommended in Lord Heseltine’s report on the Tees Valley “Opportunity Unlimited”, in order to understand the scale and complexity of the site it is necessary to carry out a number of site assessments, which my Department has asked the Homes and Communities Agency to take forward. These site assessments will help inform: costs to decommission the site, costs to regenerate the site and provide the necessary due diligence to enable the future mayoral development corporation—subject to legislation, local processes and agreement—to take forward the regeneration of the area.

These site assessments do not fall within the current indemnity that Government are providing. Therefore Government will be providing an indemnity to the OR to indemnify him against all liabilities, costs, expenses, damages and losses suffered or incurred by him that are arising out of the site assessments. In the coming months the safe management of the site will move to a new Government-owned company with a new site manager. At this point the indemnity will be transferred to indemnify the new management.

It is not possible at this stage to accurately quantify the value of such indemnity. HMG has considered the risks of this indemnity and I believe the likelihood of such indemnities being called upon is low. The indemnity is limited to liabilities arising as a consequence of the site assessments and the current BEIS indemnity remains in place. If the liability is called upon, provision for any payment will be sought through the normal supply procedure.

As a matter of record I have attached a departmental minute for both Houses explaining the procedure followed and containing a description of the liabilities undertaken.

Attachments can be viewed online at: answers-statements/written- statement/Commons/2016-10- 12/HCWS182/.