The extraordinary meeting of Chief Pleas will consider whether to take the loan to fund the compulsory purchase of the island’s electricity company. Proposal documents revealed that with an assumed interest rate of 6.2%, this could end up costing the island more than £1.1m. in interest payments over 20 years.
Conseiller Frank Makepeace said he wanted the decision deferred until after the forthcoming election, or after wider consultation. ‘We are being asked to consider a decision with long-term financial consequences for the whole community,’ he said.
‘This is not about opposing progress. It is about ensuring that decisions of this scale are taken with clear public confidence behind them. Without it, we risk not only financial consequences, but a loss of trust in how decisions are made – and that is far harder to repair.’
He pointed out that many of those making the decision had been elected unopposed, and that only two members of the island’s Policy & Finance Committee currently held mandates that had been recently tested through a contested election.
‘This is not a criticism of individuals, but it does raise a wider constitutional concern. Sark’s system allows candidates to be elected unopposed where there are insufficient nominations. That is a reality of island life.
‘Is it right that a committee, the majority of whose members have not recently been tested by voters, should commit the island to a major financial obligation? The greater the decision, the stronger the mandate should be.’
The vote on the loan is expected to be passed, in which case Chief Pleas will also vote to set up a company to operate the electricity grid and appoint James Lancaster, the former managing director of Alderney Electricity, as its interim managing director. Sark Electricity has opposed the move to use compulsory purchase laws to acquire the company since Chief Pleas voted back in June to start the process.
In a statement, managing director Alan Witney-Price said Sark residents now faced multimillion-pound exposure.
‘SEL’s message to residents is straightforward – the real cost of this pathway is not the proposed purchase price alone,’ he said.
‘Chief Pleas has chosen to pursue compulsory purchase and to resolve core issues through court processes. That route is slow, expensive, and creates material contingent liabilities for Sark’s public finances. Based on matters already in court or pending court action, SEL has identified minimum quantified exposure of circa £4.06m., excluding the actual purchase of SEL.’
Chief Pleas and SEL are known to be poles apart on their valuations of the company, with Mr Witney-Price previously stating it is worth £2.4m. and Chief Pleas less than £500,000.
The value is due to be decided by an independent valuer once terms have been agreed by the Seneschal’s Court in a hearing due to take place this month.
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