The Scottish Liberal Democratic Party spoke out this week about Sanjeev Gupta’s deal with the government to keep the Lochaber aluminium smelter running, claiming that the GFG Alliance has grossly enriched itself at taxpayers’ expense.
According to a spokesperson from the party, GFG Alliance has witnessed the aluminium smelter’s value increase by over £100 million since 2016. The assessed value of the plant at the time GFG took title to it was £330 million, and now the smelter and hydroelectric plant attached to it is worth £438 million, claimed the Liberal Democrats.
“GFG Alliance is laughing all the way to the bank with the Lochaber smelter deal with the SNP Government,” lamented Liberal Democratic economy spokesman Willie Rennie this week.
While the Scottish government backed the aluminium smelter with a guarantee of £586 million, the Liberal Democrats say that GFG has made scarcely any investment in the plant.
“Since 2016, Liberty Aluminium has fulfilled all its power purchase and guarantee fee obligations, and there has been no call – and therefore no resulting public expenditure – against the Scottish Government guarantee.”
The Liberal Democrats say government records show that GFG pays between £14 million and £28 million per year for the term of the guarantee.
For its part, the Scottish government defended the arrangement.
“The Scottish Government’s guarantee helped secure the future of the businesses at Lochaber,” stated a government spokesman in response.
“They are now operating profitably and have created 40 new jobs since 2016, increasing direct employment in the complex to 200 jobs while supporting a valuable supply chain with hundreds of associated jobs.
“The business remains committed to investment in the long term future of the site.
“There has been no call on the guarantee and the value of the security package held by the Scottish Government in relation to the Lochaber guarantee exceeds its financial exposure according to Treasury Green Book analysis prepared by independent advisers.”
“The net present value of the remaining power purchase agreement revenue stream over the remaining 20 years is £286m, while the companies’ valued the assets at Fort William at £438m in their 2019 accounts,” the spokesman concluded.
A GFG Alliance spokesperson went on record this week defending the arrangement as well. “The Lochaber aluminium smelter remains a profitable operation,” noted the spokesman.
“GFG Alliance’s continuing commitment to the operations and to investing in a new recycling and aluminium billet plant will secure their longer-term future, create new high quality employment in the area and provide opportunities for the local supply chain.
“These expansion projects, which recently received consent from the local planning authority, will further bolster Lochaber’s role as a hub for green aluminium production – thanks to its hydro-electric facility integrated with the wider estate, the plant already produces some of the lowest carbon aluminium on the market,” concluded the GFG spokesman.
However, the Liberal Democrats remained unmoved.
“The workers have been let down as has the taxpayer who have repeatedly funded the SNP Government’s failed industrial intervention policy – from BiFab to Fergusons to the Chinese deal and Lochaber, the SNP Government’s record is a shocking one.”
“The SNP Government have been very secretive over Lochaber and should now come clean on their plans to get GFG to stick to their promises on thousands of extra jobs,” concluded the Liberal Democratic spokesperson.