Plan for up to 1000 jobs at Highland yard

 

© The Herald Originally published: 19/9/2008

Almost 1000 jobs could be sustained for up to the next 20 years at the former Nigg Fabrication Yard, according to a new report.

The claim is made in a study, launched yesterday by Highland Council, as a preliminary to seeking a Compulsory Purchase Order (CPO) to buy the yard.

The council could make the necessary legal moves for a CPO by next spring, although it is not clear whether an alternative buyer may yet preempt that effort. One interested party is the Birmingham-based DSM Demolition Group, which specialises in steel cutting, the demolition of concrete structures, dismantling oil, gas and nuclear facilities and ship-recycling.

The council sees a CPO as the only way to break the stand-off between Nigg's two owners. This has obstructed the sale which would let it once again become a key economic driver in the Highlands. At its height, Nigg employed more than 5000 fabricating oil rigs, and it has one of the largest graving docks in the world. Now only around 100 people work at the yard making subsea modules.

Two-thirds of the yard is owned by KBR, the American engineering and construction company The yard was put on the market in 2005. But 76 acres of the property is owned by the Wakelyn Trust of the Nightingale family who own the Cromarty Estate across the firth.

KBR has a 30-year lease of the trust's land but it has a clause that, before KBR can terminate the agreement, it would be required to reinstate the site, or pay the multi-million pound equivalent. KBR pays a rent to the Wakelyn Trust, understood to be around GBP100,000 a year. It also has tenants paying rent.

Before the council asks a judge to grant a CPO it has to have an alternative strategy for the yard. Hence its development master plan launched yesterday, projecting an average of 800 to 850 jobs on the site over the next 15 to 20 years, with a further 400 indirect jobs created in the wider economy, boosting it by GBP60 to GBP65m per year.

Along with the continued operation of the Nigg oil terminal, it offers two options. One is that the site be managed by a single owner-operator with a range of industrial activities including oil rig repair, conversions, decommissioning along with fabrication of subsea modules and renewable energy structures.

The other is a more flexible layout with smaller plots across the site with an emphasis on a management company organising the development of the site with a renewable energy focus.

Ian Ross, the council's planning and development chairman, said: "The plan now gives us a very clear vision of how the site could be developed to maximise its potential and provide sustainable jobs for the Highland economy for the next 15 to 20 years. This will be fundamental for any consideration of any future planning applications."

He said that KBR had finally given permission to the council's environmental consultants to survey the site but only after it had been pointed out that the council could legally demand access with 24 hours' notice. Until recently access had been refused.

But the council would own the yard for as short a time as possible, before seeking developers to bid for it. A CPO could take six months or up to two years. Mr Ross said that if another buyer came in before the council could win a CPO, the development plan would provide a planning framework for development at Nigg.

One development he did not expect was the decommissioning of nuclear submarines at Nigg .

Nobody was available to comment at DSM's Birmingham HQ. A spokeswoman for KBR in Houston said the company's goal remained to "find a reputable and appropriate company to purchase our interest in the yard".