MILLIONS of pounds in European funding could be put at risk by delays over the future of a crane contract, a council claims.
North Tyneside Council yesterday seemed to overturn a decision to grant an operating licence for a crane on the Swan Hunter site and said it would be carrying out a procurement process.
The move came after months of legal wrangling, in which Freddy Shepherd’s Shepherd Offshore company was granted permission for a judicial review of a council decision to award a £50m stake in the famous site to an as yet unidentified company.
But the council’s decision in March still stands and an official announcement is due in days.
Shortly before the announcement in the spring, the council revealed that WD Close & Sons Ltd and Titan Heavy Transport – operating under a company named Jupiter Offshore Limited – had put more than £1m into bringing a 57-metre crane from Holland.
A spokeswoman for the council last night said it was “discussing the future use of the [operating] licence granted with Jupiter Offshore Limited and [we have] no further comment to make”
However, council chief executive, Graham Haywood is quoted in cabinet papers as saying that delays on decisions about the site could put multi-million pound European funding at risk.
Mr Haywood said: “Should the procurement not progress, then it is possible that the £3.98m external grant funding secured to support the infrastructure works could be at risk.
“Detailed discussions would need to be entered into with the awarding bodies to agree any alternative proposals.”
Mr Shepherd and his Walker-based company lodged legal action with the High Court after the company failed to win a bid to take control of the site, including the quay which in turn includes the crane contract.
The company argued that the procurement process had been flawed and that it had been “misled” in the run-up to the contract being awarded.
That sparked a bitter exchange with then-Mayor Linda Arkley who accused the former Newcastle United owner of “sour grapes”.
Now she has been ousted by Labour’s Norma Redfearn, the council has said it will put the contract for the quay and “craneage services” out to tender again. A spokeswoman said: “North Tyneside Council and Shepherd Offshore Limited have reached a settlement in the outstanding judicial review proceedings in connection with the Jupiter PaRC@Swans site.
“The council will now commence an open tender process in relation to procuring a quay operator for the site, including the provision of craneage services.”
Last night a spokesman for Shepherd Offshore confirmed it would be entering a renewed application for the contract on the quay.
A spokesman said: “We are pleased with the agreement that has been reached with North Tyneside Council that will see a quay operator chosen following a procurement process.
“We look forward to continuing with the procurement process so the north bank of the Tyne can benefit from much-needed investment in the area.”
North Tyneside Council has already secured a public-funded grant of £13.8m from the European Regional Development Fund (ERDF), the Homes and Communities Agency and the Local Enterprise Partnership Growing Places Fund for “new site infrastructure”.
In the cabinet report that went to councillors last week, Mr Haywood said: “The site infrastructure works include improvements to the quay walls, the strengthening of the adjacent load in/load out and storage areas and the dredging the river to ensure the riverside quay meets the needs of existing and new businesses.
“These particular works which are estimated to cost £7.95m, funded by external grant of which £3.98m is ERDF grant and the remaining £3.97m is from the Homes and Communities Agency and Growing Places Fund.
“Recent inquiries from potential new manufacturing businesses highlight that deep water berthing, on-site craneage and other quay facilities would be essential to secure their interest in the site.”
It’s thought the company chosen to operate the site will be in line for lucrative berthing fees.