The Teesside Freeport

How does the development of UK’s first post-Brexit freeport link with a major environmental disaster and alleged corrupt political practice?

[Author’s note: this piece has been rumbling in my mind for a few weeks, but recent political events have brought it to the fore. Perhaps the last sentence is the reason why I am posting it now? You might want to start with that...]

Background

The Teesside freeport, known as Teesworks Ltd, lies on the land previously occupied by the former Redcar steelworks, at the mouth of the river Tees (see photo). It was Europe’s largest brownfield site (over 2,500 acres) and needed significant clearing and decontaminating before a new use could be made of the land. It has been estimated that £20 million per year would need to be spent just to keep the site safe.

The scheme has received notoriety because a significant amount of land (over 100 acres) that had already been regenerated at a public cost of £100 million was sold off to local businessmen at the rate of only £1 per acre. The assets of the land, including the freehold, amounted to £120 million including the scrap metal left on the site. By the end of 2021, 90% of the equity of the site had been handed over to JC Musgrave Capital, Northern Land Management, and DCS Industrial Limited with the remaining 10% still in the hands of the South Tees Development Corporation (STDC), a state-owned entity. The leading protagonist in these affairs was the Conservative Tees Valley Mayor Ben Houchen. One of the key developments due to take place is the building of a wind turbine construction base by the South Korean firm SeAH Wind Ltd creating 750 jobs.

The Teesworks site

From: Teesworks £400m wind turbine parts factory work begins - BBC News

Corruption?

Several people have made allegations that the buy-out/take-over of the land involved corruption, stating that the land had been given away, below value and without being placed out to tender. The developers were sold the land/scrap metal cheaply on the understanding that they would take on further decontamination liabilities, instead of the state. The argument was that they, the developers, would be incentivized to invest in a site that had a net negative value. However, this understanding was not an obligation and has since been waived. STDC will now shoulder these future costs. Demolition and remediation at Teesworks have so far cost STDC £450m. Critics allege secrecy, cronyism, and poor governance in general.

The original plan for the area, made in 2017, was that the decontamination and redevelopment would take place over a longer period, up to 25 years, keeping the freehold of the land in public ownership and retaining public control over which businesses moved on to the site. The current Conservative government and local Mayor clearly saw this differently.

The National Audit Office (NAO) carried out an informal and limited review in the summer of 2022 to examine how government grants were being spent and found that they had been spent as billed. Mayor Houchen then claimed ‘a clean bill of health’ for the freeport, claiming the NAO had looked at ‘every single document, contract, advice, email, and every other piece of paper relating to Teesworks’. The NAO then stated that this was ‘misleading’.

Pollution

Full-scale decontamination of the area was not deemed financially viable, so it was decided to dump much of the waste material at sea. Cleaning up former industrial sites by moving polluted soil and river silt and then dumping it somewhere else has created huge problems in several locations around the world. Here on the Teesside site, a cocktail of toxic materials was removed and taken to a nearby North Sea floor location. Chemicals including pyridine, which had been lying undisturbed for decades on the site but in a stable state, were dumped in the sea.

Shortly after work began on the freeport, with the movement of contaminated material coinciding with routine dredging of the river mouth, a large amount of sea life was found dead, and bodies of sea animals were washed up onto several North Yorkshire beaches. People walking their dogs along the local seafronts reported finding enormous numbers of dead shellfish and starfish along with a few of their predators. Scientists stated that this mix of deaths might be associated with mass poisoning from pyridine.

The deaths have been occurring for several months and they have destroyed the livelihoods of fishing communities along the coast and put local tourism at risk. It can be argued that no one wants to visit a resort where the beaches are covered with rotting and stinking corpses of sea creatures.

Reaction

The government has sought to play down the problem by repeatedly issuing calming reports which has enabled the decontamination work to continue. Calls for an enquiry were initially resisted; then an initial official report was commissioned which informed the public that the die-offs were due to an algal bloom. However, it has been stated by others that algal blooms do not last for months or continue deep into winter.

A subsequent report suggested that the die-offs might be due to a disease. The trouble with this view is that no disease has yet been detected that would be capable of killing both shellfish and starfish in such large numbers as well as lower numbers of other types of sea life.

The government has consistently denied that there is any evidence of significant pyridine poisoning in the coastal waters. However, York University has now developed its own accredited test for pyridine and is planning a series of intensive investigations throughout the estuary. In the meantime, the dredging and dumping have continued.

Questions

Why did public officials authorize this land sale so quickly, and so cheaply?

Was any pressure put on them by government ministers?

Has anyone who benefited from the scheme donated funds to any political party?

What safeguards are being put in place to make sure that the development of the next freeport is not a similar tale of dubious controls over public money and lack of care for the environment, as well as for those whose livelihoods depend on it?

Conclusion

This is the biggest freeport in the UK, and the biggest ‘levelling up’ project instituted by the Conservative government in the country. It has great economic significance for the Teesside region and establishes a blueprint for future Freeport projects.

[In June 2023, the Tees Valley Mayor Ben Houchen was made a life peer by the outgoing PM and MP Boris Johnson.]