Teesworks: Ben Houchen's South Tees Development Corporation paying millions in unexplained deal

STDC owns the land of the former Redcar steelworks site, which it bought via compulsory purchase in April 2020. After completing demolition of structures on site this year, it continues to remediate plots of land at public expense which will be sold or leased to the private sector upon completion.

Clean aggregate and soil are taken to the 4,500 acre site by contractors Hall Construction Services Ltd as part of remediation work, to replace heavily-polluted land that’s in the process of being removed.

The Yorkshire Post has seen an invoice from Teesworks Ltd to STDC, dated May 22 2022, charging £4 a tonne for “Fill volumes” at the South Bank part of the site. The invoice total is £1,186,752.00, and its existence verifies a story published in Private Eye this week about the as-yet-unexplained agreement. The magazine has seen similar invoices from the last two years which total to £13.9m.

Teesworks Ltd was initially a 50-50 venture between the publicly-owned STDC and local property developers Chris Musgrave and Martin Corney. Messrs Musgrave and Corney were given 90 per cent of the venture in November 2021, although the terms under which they acquired the additional equity have never been publicly revealed.

The company has first right of refusal to purchase any parcel of land at the site after its remediation, and can do so at a cost of £1 per acre plus VAT. Its purchase of the 90-acre site that will become home to SeAH Wind for only £96.79 drew heavy criticism and accusations in Parliament of “corruption”.

A side deal has seen Teesworks Ltd agree to pay £15m for the land purchase. The first payment of £5m was paid in March, and is the only investment made by the private partners that has been verified thus far. The remainder of the balance is not due until December 2025.

Secretary of State for Levelling Up Michael Gove commissioned an independent investigation in June to examine the governance, accountability and value for money being delivered by STDC’s parent authority, Tees Valley Combined Authority (TVCA).

Tees Valley Conservative mayor Lord Houchen has always strongly denied any accusations of corruption or wrongdoing, and welcomed the investigation into TVCA.

Middlesbrough MP, Labour’s Andy McDonald said: “I suspect that a lot of people reading about the dealings at Teesworks are left scratching their heads.

“We need complete openness, disclosure and transparency.”

Both STDC and Teesworks Ltd were asked why the former was paying millions to the latter to deliver aggregate to a site it owns outright. Neither responded in time for publication.