Taxpayers will have to pay £5.25m bill after a regional body responsible for handling the Cardiff City Deal bungled the awarding of a demolition contract for Aberthaw power station.
The Cardiff Capital Region, a public body which was set up to invest more than £500m in the south Wales as part of the 2016 City Deal, was taken to court over how it awarded a demolition contract for Aberthaw power station, the disused power station it controversially bought from energy giant RWE.
The body, which represents 10 councils, lost a high-court legal challenge brought by a losing bidder, Brown and Mason Group, which concluded in February.
The former coal-powered station was acquired for £8m by the city region in 2022, with contractors Erith beginning demolition work last year. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here
The region's chair Mary Ann Brocklesby has provided an update to the Senedd, telling the economy committee that a settlement of £5.25m had been agreed. Brown and Mason had previously said they were seeking £10m.
"I'm not able to say much more at this point because we are undergoing an independent review which we commissioned as political leaders to set in train precisely at the point that we knew we were going through a legal process," she said.
Cllr Brocklesby said: "We had to wait until that legal process was over before that independent review could start. "We are awaiting the findings which – subject to legal caveats – we will be making public."
Kellie Beirne, chief executive of the south-east Wales corporate joint committee and Cardiff Capital Region, said: "We're taking this extremely seriously, we recognise the gravity of it and again yes, [it's] something that we don't come and report.
"Apologies again for the short notice but we had clearance, we briefed our internal stakeholders and we felt it important to be as transparent as we possibly could by conveying that this morning at this committee."
She said a full independent review has been ordered. "When that review concludes and we have findings, we'll be able to be much more open about what happened and take steps to ensure that this can't happen again," she said.
Asked whether the court case has impinged on work at the 500-acre site, Cllr Brocklesby insisted: "No, it continues at pace."
Conservative MS Andrew RT Davies said: "When you came before this committee in September 2023, Kellie you said that £40m is but a drop in the ocean.
"I think the words you used were hundreds of millions of pounds will be required. Obviously, this court case has not helped instil confidence in the private sector in coming on board as partners... so, how are you progressing in that goal?"
Cllr Brocklesby replied: "Let's look at the wider ecosystem of CCR: one of the absolute strengths of it is that we have people across the region who are highly valued within their own sectors... who are highly respected not just in Wales but globally."
"In terms of the future of Aberthaw, it does actually look very bright and we're not feeling any effects from the impacts of this highly regrettable procurement issue."
Ms Beirne said Cardiff Capital Region does not have deep enough pockets for what Aberthawr requires following the initial demolition and remediation phase.
