Scottish govt. signs £405,600 contract with Deloitte for contingency planning advice around Lochaber aluminium smelter deal

Sanjeev Gupta owned GFG Alliance’s deal with the Scottish Govt. stated that the government undertakes the cost of a 25- year electricity supply contract between Lochaber aluminium smelter and the adjoining hydro-plant.

The key factor to acquire both the facilities by Sanjeev Gupta’s GFG Alliance in 2016 was the income stream.

The Scottish ministers had expected the continued operation of the plant, which employs around 100 people and was acquired from Rio Tinto for £330m by Gupta’s GFG Alliance that will safeguard jobs in the region and allow for a sustainable metal production sector in Scotland.

It was further reported that the deal incorporated the commitment of a new aluminium wheel factory, which will create a further 2000 job opportunities, unfortunately, neither eventuated.

The Scottish officials inked the contract of £405,600 in May 2021 with Deloitte, one of the globally renowned accounting firms towards “contingency planning” advice for this guarantee, which has been reported as being worth as much as £575 million to the public fund.

Willie Rennie, Scottish Liberal Democrat leader, reacting to the new contract with Deloitte, said: “Holyrood and the public have every right to know what is being planned.”

He further added: “The questions are mounting for both the SNP Government and the GFG Alliance about what has happened already. This matters because thousands of jobs were promised but they haven't materialised.”

"I think Parliament and the public have every right to see what is now being planned.”

"This latest £405,600 contract is just the tip of the financial iceberg. The guarantees provided to the GFG Alliance represent one of the biggest deals ever signed off by the Scottish Government. Taxpayers are exposed to the tune of hundreds of millions.”

A Scottish Government spokesperson said: “The administration of Greensill Capital UK has impacted a range of businesses across the UK, including those operated by the GFG Alliance in Scotland.”

“Scottish and UK Ministers are monitoring the situation closely and the Scottish Government has initiated routine contingency planning with input from specialist advisers such as Deloitte to protect its interests. Deloitte has been retained as advisers on matters relating to the Lochaber guarantee since 2017.”

“In autumn 2016 the Scottish Government intervened to support continuing aluminium production in Lochaber.”

“In November that year, Scottish Ministers sought Parliament’s permission through the Finance and Constitution Committee to provide a guarantee of the smelter’s power purchases. The Committee reviewed and approved the contingent liability.”

“Our support prevented the break-up of the assets and closure of the smelter, protecting hundreds of skilled jobs.”