Setback for SNP renewables push as Doosan axes wind farm project

ALEX Salmond’s integrity has been called into question, after he was accused of concealing the fact an energy company had pulled out of a £170 million investment in an offshore research centre for Scotland.

The First Minister came under fire after it emerged yesterday the 1,700-job project had been cancelled at the end of last year, yet was still included in the SNP government’s budget document that was debated by MSPs two months later.

Korean firm Doosan Power Systems had planned to build a renewables research facility outside Glasgow as part of plans that would have seen the firm developing a Scottish wind turbine assembly and manufacturing plant.

Doosan informed the Scottish Government last December of its intention not to go ahead with the project, a decision that was a blow to the SNP administration’s plans to develop green energy in Scotland.

News that the plan had been abandoned did not become widely known until South Korea’s biggest company revealed its intentions at a Danish trade fair.

At Holyrood, opposition politicians were angered that, after December, the SNP cited new investment by Doosan to reject suggestions the independence referendum was causing economic uncertainty.

A recent Scottish Government press release, announcing this week’s visit to South Korea by finance secretary John Swinney, spoke of the “successful commercial relationship” between Scotland and Doosan.

Yesterday it emerged the project was specifically mentioned in the Scottish Government’s draft budget document that was debated at Holyrood in January and February.

A passage in the Scottish Spending Review and Draft Budget 2012/13 said: “In March 2011, Doosan Power Systems announced investment of £170 million in Scottish wind power over the next 10 years. An R&D centre will be set up near Glasgow, creating 200 jobs, following which the company is looking to establish a manufacturing and assembly facility in Scotland. Doosan expects its offshore wind plans in Scotland to create up to 1,700 new jobs.”

The First Minister’s spokesman claimed references to investment by Doosan made after December referred to the energy company’s existing operations in Renfrew.

He also pointed out that the draft budget had been written in September last year. However, no attempt was made to amend the document after the Scottish Government became aware the project had been abandoned.

Mr Salmond was challenged over his government’s handling of the issue at First Minister’s Questions yesterday. Scottish Labour leader Johann Lamont said she was concerned about the First Minister’s “integrity and the honesty of his government”.

She said: “If he [Mr Salmond] will suppress issues like the Doosan investment before the local elections, goodness knows what he will conceal before the referendum. After this, how can any of us believe a word the First Minister says?”

The attack on the First Minister’s integrity was not the first time the SNP government’s behaviour has been questioned.

Ms Lamont referred to a statement made by the First Minister’s spokesman in January when he responded to claims that the referendum would create economic problems.

Mr Salmond’s spokesman had said: “The reality is that businesses at home and abroad are voting with their feet with full confidence in Scotland’s future by making huge investments.

“In recent months, Avaloq, Dell, Gamesa, Amazon, Doosan Power Systems and Michelin, to name just a few, have invested in Scotland – and, with the full financial and economic powers of independence, we can achieve even more.”

Ms Lamont accused the Scottish Government of hiding the bad news.

She said: “In January, the First Minister’s spokesman said that Doosan Power Systems had invested in Scotland ‘in recent months’.

“The opposite was true. Instead of announcing additional investment in those recent months, the most significant announcement Doosan Power Systems had made to the Scottish Government was the withdrawal of their proposed £170 million investment.”

She added: “Not only did the SNP government hide that fact, they claimed the reverse.”

But Mr Salmond told the Labour leader it was not for the Scottish Government to announce the decisions of companies.

He said: “You don’t make company announcements for them. If they wish to make an announcement, if Doosan wish to make an announcement to their supply chain, they have the right to do that. That is their decision.”

The First Minister said his government supported Doosan because “they employ 1,300 people in Scotland and the research and development on their worldwide skills centre for boiler making is continuing that investment”.

He added: “We also expect Doosan to make more investments, important investments, in Scotland in the future.”

A Doosan statement said the company had decided to delay its investment in offshore wind at the end of last year, citing lack of investor confidence prompted by the European debt crisis and sapped market confidence, which had placed a question mark over the future of the offshore wind market.

A Doosan spokesman told BusinessGreen magazine: “We informed the Scottish Government and potential customers at the time.

“We were not prevented by the Scottish Government from releasing the news.”