Caltongate risk

I read with growing disbelief your report (May 24) on the deal to sell the Caltongate site to property investment company, Allied London. This has apparently been agreed between a partly state-owned bank, Lloyds, the administrator, Deloitte, and the new purchaser, all of whom seem to assume the existing planning consent granted by another interested party, the City of Edinburgh Council, will continue to provide the framework for the project.

It may be convenient for Lloyds to dump a toxic debt in light of its current plight, and for Deloitte to offload a distressed asset, but both have obligations to act in accordance with the binding provisions of EU law. Have they cleared this sale with their own regulators or the European Commission? Assuming they have, they must surely be aware that the commission is currently investigating the award of the original public contract to the failed developer, Mountgrange, as an alleged breach of Directive 2004/18.

Presumably Allied London and its professional advisers have also carried out the necessary due diligence and compliance checks in order to satisfy themselves this transaction is unencumbered by any unquantified risk, and that the repeat availability of a site in which the local authority holds an interest was advertised in accordance with EU regulations.

Given that the EU authorities have expressed a view that there is prima facie evidence which may invalidate the planning consent, or at least raise questions about the legal certainties which underpin it, surely the assertion that an existing consent can simply be modified at the margins is at best uncertain and at worst legally hazardous.

In the event that the European investigators rule the directive has been breached, it logically follows that those in authority who conducted privileged negotiations with Mountgrange were acting ultra vires, in which case an issue of disqualification from public office may, in theory, arise. It is even possible disciplinary action may have to be considered against the then conveners of the city's planning and housing committees, one of whom remains in position, while the other is now serving as an MP.

There is a clear risk that this agreement will unravel should Scottish Secretary Danny Alexander, or the Scottish ministers, take appropriate legal advice on the matter of the validity of the decisions that have been and are due to be taken by the various players in this latest Caltongate proposal, or should the EU Commission conclude that the law has been broken.

Edinburgh has many unique qualities, but being a no-go area for EU law is not one of them.

DAVID J BLACK

Moray Place

Edinburgh