Are we seeing spin to reduce the scale of the RHI scandal?

It seems moves are afoot to massage  down the estimate of the RHI overspend and thus presumably the damage to Arlene Foster and her official and party advisers. The “ new” information reported by Jonny Bell in the Bel Tel dates from January and  is therefore not new but newly exposed, we’re told. (Stand by for a chorus telling us they knew it all along).  The scaling down rests on the presented fact that the costs of  installing “combined heating and power plants” ( CHP) was not included in the actual scheme and therefore the cost estimates,  but that bank loans were taken out for the boilers on the basis of Executive guarantees.

I’m not sure if legal action “to force government to re-instate the original tariffs” lets Arlene Foster off the hook a bit or impales her more firmly on it.

Perhaps the journalists who spoke on the RHI at Féile An Phobail will shed some light?  Personally  I wouldn’t blame  them for failing to  have raised the alarm over the regulations  at a time when most politicians and officials  were blissfully unaware of the likely  downside, at least before the whistle blew and Arlene started to wash her hands of blame.

Will the Coghlin inquiry be impressed?

In a presentation seen by this newspaper delivered to government officials in January – just days before the Assembly voted through amendments on the scheme to curb payments – a projected cost of £160m was factored in for a combined heat and power (CHP) plant installation.

It has been reported that for every £1 spent on the fuel, £1.60 could be claimed back, something the Renewable Heat Association for NI (RHANI) strongly disputes.

It says the scheme only ever promised a 12% return on investment, which it says has been broken and is now “unattainable” under the amended scheme.

RHANI says its members, almost half of all those on the scheme, are facing financial ruin, with thousands of jobs in jeopardy, as they face mounting bills and difficulties paying off bank loans taken out on the basis of a government-guaranteed subsidy for two decades.

At the time, Mrs Foster wrote a letter “grand-fathering” the scheme – essentially guaranteeing a return – so that banks would approve loans, and to encourage business to take up the scheme.

RHANI is currently involved in legal action to force the government to reinstate the original tariffs. Earlier this year it lost a court action to prevent the department publishing the list of names of those claiming from the scheme, although it was awarded costs by the judge.

 

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  • William Kinmont

    What about the pellet suppliers and distributers presumably local ones will have scaled up employment and investments when things were running at full blast are there signs of suffering there?

  • Zeno

    Do you mean a respin by the media? They did spin it out of all proportion unlike the Fermanagh Hospital.

  • John

    Surely you are not suggesting that a blind eye should be turned to abuse of public funds on a vast scale.

  • Neil

    They provided the sums for the scheme had it continued without any action, which more or less seemed to be the plan until the media did the sums and started screaming about the overspend. The only spinning I’ve seen is the idea that introducing the new cost controls will work, and that the legal challenge (based on what seems like a pretty solid argument, given Arlene’s notorious letter basically guaranteeing the scheme) will fail. If that legal challenge is successful the scheme’s overspend will be in the order of that reported by the media in the first place. As William alludes above what will be interesting will be the info on who makes the money from the wood pellets and other ancillary costs. Rumours abound, I only hope we get the info in due course.

  • wild turkey

    Folks, a simple question.

    can someone, anyone, point me in the direction of an unbiased, robust quantitative analysis of just WTF are/were the practical financial outworkings of the RHI “policy” ?
    Who pays/how much ? Who benefits/how much?
    An Assessment of opportunity costs would seem to be crucial.

    It is really a simple request.

    and it is a necessary condition to even attempt a forensic political analysis.

    thanks guys

  • mickfealty

    The NIAO provided all of those sums, not the media. And they lay dormant and unconsidered from July until December. I don’t recall much serious extrapolation of those figures, just the classic for ash get cash (https://youtu.be/hmZTe05LJhk) thing, they were much bandied about without anyone ever explaining how the composite figure was arrived at.

    I expect Coughlan to separate the spin from the substantive reality. As indeed, remember, does Mr Adams. It seems to me the Permanent Government has some serious questions to answer (not for the first time) about how it tracks expenditures, and responds to NIAO reports.

    I’m on holidays now, so I don’t have that key report to hand to check whether the NIAO clearly identified these components, but if Bell’s sources are right and the over run figure of 100 mill over twenty years is sound then that’s an overrun of just £5 million per anum.

    Far from “breaking the finances of the NI government” I suspect we’ve all been played. Good and proper.

  • Granni Trixie

    “Out of all proportion”? I think not. Explain yourself?

  • Granni Trixie

    You’re amazingly tolerant Mick.

  • The worm!

    “Simple”, are you serious?

    Politics – not simple!
    Northern Ireland – not simple!

    Politics in Northern Ireland – well, I think you see where I’m going with this.

  • William Kinmont

    sorry question not clear. i mean these guys will have made long term investments and commitments which will fall through if the scheme is reduced and demand drops off dramatically

  • CB

    The sooner this mess gets examined in the open the better, as if the 3 RHI recipients I know are typical of the scheme it’s even more of a scandalous waste of public money than what’s been reported. The enquiry into this Chancer’s Charter can’t come quickly enough.

  • wild turkey

    well Mr or Ms Worm, ah, thanks. but it is simple.
    it must be simple.
    Politics: simple.
    Northern Ireland: Simple…. once you bring Occams razor to bear on the Narcissism of Small Differences. hope the link is functional.

    thanks.

    WT

    http://maggiesfarm.anotherdotcom.com/archives/2514-The-Narcissism-of-Small-Differences.html

  • Zeno

    Newton Emerson did a write up on this. The sums involved in just one hospital are almost identical to the RHI “scandal” projected loss to the taxpayer, and from a much more emotive source, the Health Budget.
    http://fermanaghherald.com/2014/04/hospital-will-cost-taxpayer-488m-more-than-original-project-cost/

    It rarely gets a mention. No once crashed Stormont or called for heads to roll or even called for a public enquiry

  • Patrick Jones

    It’s all a green washed nonsense. At Drax for example we cannot grow enough wood to feed the damn thing so we import it from Canada. Carbon miles anyone?

  • Patrick Jones

    But what is the vast scale and who caused the losses.

  • Patrick Jones

    Do we grow enough wood here to feed them. I think it’s imported

  • William Kinmont

    Warm and wet can’t grow wood much faster anywhere, unfortunately cold and slow needed for usefull structural timber. Ours only for fence posts and burning. Also need lot of marginal land and tax breaks

  • Granni Trixie

    But the point is we do know sufficient about RHI to articulate that it is not good enough – other cases are beside the point.

  • mickfealty

    Do we? Wild Turkey’s point seems relevant in this regard. Did we know 160 million of the original figure was not salient? It’s not tolerance my part you’re witnessing, it’s plain old frustration

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  • SeaanUiNeill

    Green it is not. Seriously developed Green policy is tailored to needs, place, and conditions, not simply the “this is classified as a renewable by westminster and so should be subsidised” approach of politicians with no actual awareness of genuine “Green issues” attempting to apply “green policy” simply because they have to. It is important to remember that the most vociferous critic of these misinterpreted “Green” policies at Stormont has been Steven Agnew.

  • CB

    And the recipients I know are generatingenergy for uses which are both unnecessary and uneconomic without such a ludicrous incentive. So we’re transporting and burning fuel for usage that shouldn’t be happening in the first place, let alone encouraged and facilitated by public subsidy. 100% of the cost of these projects is disgraceful theft of public money, not whatever % of overspend the DUP cheerleaders attempt to massage the figures down to.

  • mickfealty

    Did the Finance Minister know, when he mysteriously scaled the quantum up to 600 million? If journalists had got to the base of these figures before going off on a rampage, it would have been far less easy for politicians to exploit them like so many uber marionettes.

  • John

    In truth probably one wood pellet is too much, and, the idiot that came up with concept in the first place.

  • John

    Old-fashioned Capitalism is about risk and reward. Returns are NOT guaranteed. If the game is rigged and the wheels fall off the wagon. How much sympathy is justified?

  • John

    That is about it in a nut-shell.

  • SeaanUiNeill

    Don’t start me on the carpet slipper farmer and quite unnecessary subsidies, but this is a messed up version of a quite different situation. The subsidies should be being used to develop an alternative structure of alternatives tailored to local circumstance, not to bribe voters. I’ve been talking to the Greens about the old system of water power which is often enough still there with the eighteenth/nineteenth century structures still often in place, if overgrown. With fast flowing rivers and the steady flow of feeder dams the problems raised by the uncertainties of wind are not present, and the one resource we always seem to have is rain.

  • William Kinmont

    Arlene might just have guaranteed it with her letter.

  • John

    Arlene certainly goes to great lengths to look after her voters.

  • William Kinmont

    Lot of those with interests in forestry don’t have a vote