The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
XPB: We are talking of a site in an industrial area where the local Council is keen to encourage investors because of a failing local economy. The VLS site is by no means the only one in the area and these other sites have, I presume, all obtained planning permission. What makes the VLS site different? As to your diligence comment, I repeat that your assertions are unsubstantiated.
The facts are the attributes of the site. And these attributes are, amongst others, holding up progress. Due Diligence is far from binary. There's detailed diligence, or diligence on a shoestring. Its pretty obvious which one applies here.
XPB: Due diligence is either done or not done! They did choose the site (as had others before them) so one has to presume that VLS believed that the advantages outweighed the disadvantages. Once again your assertion that VLS was unaware of the issues is unsubstantiated, it is merely your opinion. A few facts might make your argument more plausible.
To correct your statement, i wrote that i suspect a bare minimum of DD was undertaken not, non atall.
To use your own narrative, do you seriously suggest that if these issues were known prior to declaring the site as their own, they would have chosen it? I doubt it. Again, this implies basic diligence to get the project moving and secure funding - finding needed to hire the consultants and support the payroll.
XPB: Although you " suspect" and " strongly suspect" that VLS did not do due diligence before entering into the planning process, you offer no evidence to support your suspicions. Your suggestion that the site was "cheap" is again unsubstantiated as is your claim of undue haste in order to obtain F4C funding. BTW, the F4C funding is a drop in the ocean cf the total cost of developing the site. Your assertions re the flood plain issue are, once again, unsubstantiated. I don't dispute that there are unresolved issues with regard to the planning application but I find nothing in your arguments to suggest that these issues are unresolvable.
I strongly suspect that none of these issues were clearly visible to VLS prior to commencing the project. As you move through the planning process, several topics normally pop up that you were previously aware of - this is pretty normal. The issue with this site is that it was hastily selected and secured by VLS in order to qualify for F4C funding. It was probable very cheap for a reason. VLS have an option on the land, but no obligation, so i suspect the bare minimum of DD was carried out prior to signing.
The flood plain issue, whilst being referenced in a previous application, will not have been fully thought through as a new and updated flood risk assessment was needed and this would not be done until you're in the thick of the PP submission.
3rd party investors, ie not BA and Shell.
Stokey12's comments are valid, although it is hard to imagine that VLS are/were unaware of these issues when they entered the planning process. Cadent have not made any further comments since January and Natural England have also not commented since mid February, yet matters are progressing according to NE Lincs CC so one must assume that there is dialogue between the parties although nothing has appeared in the planning docs. As for XPB's comment re the flood plain and its implications; is he seriously suggesting that the costs of meeting these requirements, which were readily apparent from the outset, have not been factored in by VLS when entering into the project? I see no way that he can vindicate the lack of due diligence by VLS that he claims without supporting evidence, but then that hasn't bothered him before! BTW what is a 3rd Party investor?
Nicely put Stokey. Aside from the Planning aspects, lets not forget that the site is a on a Cat 3 floodplain. Flood mitigation for this site includes, dedicated flood defenses, raised platforms, raised work levels for process equipment. All these will add a huge amount to the cost of building the plant and will most likely, put off an 3rd party investors due to the percivd risk of a total flood.
So, not the best site due diligence performed by the Velocys team..
Bang!
I fully expect Investmaster to shoot me down for this post as he does not believe in constructive dialogue.
As I see it there are three risks that the company faces before it can be operational at Immingham. Firstly, the planning conditions imposed may make the project unviable. This is linked in part to the concerns raised by Cadent. If conditions are imposed to meet the concerns raised by Cadent around the high pressure gas pipe thesemight increase costs. Worst case it requires the plans and therefore the plannning application to be changed.
Second, th Environment Agency grants a permit for a lower level of discharge than is needed for business operations. The effluent discharge would be into a river which is protected so the amount of effluent that can be discharged and where could affect busness operations.
Third the company encroaches on Cadent's easement leading to legal action and an injunction halting work.