Sustainable Sark needs negotiating
'THE Sark Chamber of Commerce, and no doubt all residents, were delighted to hear in the press release issued by the Sustainable Electricity Policy Development Team, that this project remains very much active, is progressing and a priority objective' said president of the Sark Chamber of Commerce, Alan Jackson.
However, while the press statement is welcome, it is written in a disquieting tone and raises an interesting question. Without the solid engagement of the power station and its grid, how does the PDT anticipate delivering power to the consumer?
Unfortunately, the substance of the PDT statement and the way in which the negotiations were broken off suggests that personality is taking precedent over policy. When you are buying beans for the house, that is fine but this, however, is a £10m. to £12m. project that will affect Sark for generations to come.
Back in March of this year, when it was announced, the proposal to purchase Sark Electricity had the endorsement of this very PDT, Chief Pleas, Sark Electricity, Guernsey's Treasury and Resources, Guernsey Electricity, the States of Guernsey Policy Council and the Sark public at large. Of these seven, only the PDT is walking away from this component and no one else has endorsed the action at this stage. The silence from every other party is deafening.
The PDT themselves declared in their statement on 21 July that an effective agreement needs to be acceptable to both parties. The only way to achieve that is to complete the negotiations, unless the PDT is considering a stronger and less 'mutually acceptable' approach. A position that the Chamber of Commerce strongly discourages. As a community we should remember that Sark Electricity has invested heavily in equipment and infrastructure. That investment by SEL still needs to be paid for somewhere along the line; simply plugging in a cable does not remove our community's obligation to Sark Electricity. Who among us would accept the government simply destroying our income stream without protecting ourselves?
Any option that does not involve an agreement acceptable to both parties and reasonably compensates SEL will simply result in a lengthy and costly legal challenge which will, in all likelihood, simply delay this vital initiative.
Of the two alternative options that immediately spring to mind – compulsory purchase and price control through regulation – compulsory purchase will require a fair market value to be reached which is the specific purpose of the Heads of Terms on the table and currently rejected by Chief Pleas. Regulation of electricity pricing has just been abandoned by the States of Guernsey for being far too expensive in a market of Guernsey's size to administer, which does not bode well for Sark. According to Guernsey Electricity's 2014 accounts, regulation costs £75,000 for the regulator and £19,000 of internal costs or £94,000 per annum. Even at half the cost locally, which is still unlikely, this is an additional £150 per year for a local household. Given the objective is to reduce the price per unit by as much as possible to encourage local economic activity, introducing this additional cost seems counter intuitive and will still require these heads of terms to be agreed.
Sark is no longer feudal, it is a democracy and, in the 21st Century, a western government cannot simply decide arbitrarily how much it wants to pay someone for their property. While Chamber recognises that it has proved difficult to reach an agreement, it only proves impossible while the PDT refuses to engage.
Nearly £50,000 of cost has been incurred by the PDT to get the legal agreement to this stage; a substantial sum of money for those who have it lying around. Sark does not. Walking away at this stage and writing off this investment to spend yet more money looking at other 'options' is simply wasteful and certainly not in the island's best interest.
Specifically, Chamber encourages everyone to remember that buying Sark Electricity was the universal plan A. It is only reasonable to determine, therefore, that plans B and C were more expensive and nowhere near as sensible. There may be alternative options, but, at this stage, they don't appear worth considering. The Sark Chamber of Commerce again encourages all of the parties to return to the negotiating table and finish what was started. A review of the heads of terms makes it clear that this is in everyone's reach.
Please contact our secretary lorraine.southern@sarkchamber.com if any of you as business owners or professionals think that Sark Chamber can offer any assistance or support for your business.
SARK CHAMBER OF COMMERCE.
