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Chinese Company To Build Swansea Tidal Lagoon Barred By World Bank For Fraud

June 7, 2015

By Paul Homewood  

 

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http://www.bbc.co.uk/news/uk-wales-south-west-wales-32993437

 

I reported back in February on plans for a tidal lagoon in Swansea Bay. Evidently the plans are moving closer to fruition.

The BBC report:

 

A £300m deal to build the six-mile wall for the world’s first tidal lagoon power plant in Swansea Bay has been awarded to a company from China.

China Harbour Engineering Company will open a base in the UK and spend half of the contract’s value on a British workforce, partners and supply chain.

Prime Minister David Cameron said the deal was "win-win" for both countries.

About 1,850 construction jobs could be created by the £1bn lagoon project, which could operate from 2018.

Mark Shorrock, chief executive of Tidal Lagoon Power, said: "I have worked in China, speak Chinese and have huge esteem for China’s delivery capability and ability to deliver projects to time and budget."

The two firms could also work together for the development of similar projects in Asia.

Speaking during Prime Minister’s Questions on Wednesday, Mr Cameron added: "It’s [Swansea Bay] subject to a planning decision, but I think tidal power does have significant potential.

"I’ve seen some of the plans for myself and I hope this is something we can make progress on and obviously attracting investment into the country to help make it happen is a win-win for both countries."

The deal could also lead to further investment with China Harbour Engineering Company – one of the world’s largest specialist marine engineering contractors and investors – looking at growing its presence in the UK and Europe over the next decade.

Its president, Lin Yi Chong, said Swansea Bay Tidal Lagoon was a "pioneering scheme that could bring the world a new energy option, as the cornerstone project in our business development strategy in the UK and wider Europe".

 

The choice of China Harbour Engineering Company may come as a surprise to many, as its parent company, China Communications Construction Company (CCCC) Limited, was debarred from World Bank contracts in 2011 because of fraudulent practices. This was the statement issued at the time by the World Bank:

 

 

Washington, July 29, 2011−The World Bank today announced the debarment of China Communications Construction Company (CCCC) Limited, and all its subsidiaries, for fraudulent practices under Phase 1 of the Philippines National Roads Improvement and Management Project. Under the sanction, CCCC is ineligible to engage in any road and bridge projects financed by the World Bank Group until January 12, 2017.

http://www.worldbank.org/en/news/press-release/2011/07/29/world-bank-applies-2009-debarment-to-china-communications-construction-company-limited-for-fraud-in-philippines-roads-project

 

 

However, this is not the only instance of fraud committed by the company. In 2011, the son of a former Prime Minister of Bangladesh was jailed for taking bribes from the China Harbour Engineering Company, as The Hindu reported:

 

A Bangladesh court Thursday sentenced the fugitive son of former Prime Minister Khaleda Zia to six years in jail for laundering money taken as bribes from two global companies.

Judge Mohammad Mozammel Hossain said in his verdict Arafat Rahman was guilty of smuggling more than 200 million takas ($2.66 million) to Singapore. The judge also fined Rahman 190 million takas ($2.53 million) and asked authorities to get the smuggled money returned.

Rahman, the younger son of Ms. Zia, was accused of taking bribes from China Harbour Engineering Company Ltd. and the Bangladesh subsidiary of Germany’s industrial giant Siemens AG for helping them win government contracts during his mother’s 2001—2006 premiership.

Rahman was tried in absentia. He has been living in Bangkok since 2008 after he was released pending trial on the grounds of poor health. He later refused to return for trial.

http://www.thehindu.com/news/international/khaleda-zias-son-sentenced-over-bribes/article2129181.ece

 

   

 Then, in 2012, China Harbour Engineering were accused by a Jamaican minister of breaching regulations. The South China Morning Post reported:

 

Mainland Chinese state entities involved in two Jamaican road projects worth US$468 million have breached regulations, the Caribbean nation’s Minister of Transport, Works and Housing Omar Davies has alleged.

The two projects – the US$400 million Jamaica Development Infrastructure Programme and the US$68 million Palisadoes Shoreline Protection and Rehabilitation Works, are being partly financed by the China Export-Import Bank (Exim Bank). Exim Bank is providing US$340 million for the project.

A forensic audit on the two projects had revealed "a host of occurrences, which demonstrate complete disregard for normal and well-established government practices", Davies said.

"The report from the forensic auditor has unearthed wanton disregard for the conventions and procedures established by the government of Jamaica," he said. "These breaches of procurement guidelines have drained precious budgetary resources and undermined the very foundation of public institutional integrity."

Programme funds were used for unrelated projects, the Chinese parties did not adhere to fund allocations approved by the Jamaican parliament and Ministry of Finance, and subcontractors were arbitrarily selected, Davies told the parliament.

In December last year, former transport minister Mike Henry resigned following criticism of the project, the government news agency JIS reported.

"Chinese companies come from a jurisdiction where enforcement of corruption and bribery laws is weak, and they often have poor anti-corruption, fraud and bribery controls in place," said Ben Wootliff, the Hong Kong head of Control Risks, a British risk consultancy. "So when they are operating in an overseas environment where enforcement is also weak – such as Jamaica – it can create serious problems."

http://www.scmp.com/business/china-business/article/1054922/jamaica-accuses-china-state-entities-abuse-over-road

 

Understandably, concerns were raised in the Cayman Islands, who were at the same time in the middle of negotiations with China Harbour Engineering to build cruise berthing facilities. The Cayman Compass reported in June 2012:

 

In the Cayman Islands, China Harbour Engineering Company has proposed to build cruise berthing facilities in George Town, cruise facilities in West Bay and to make improvements to the Spotts dock area.

During his visit to Cayman in April, Overseas Territories Minister Henry Bellingham said the UK government was concerned with the procurement process surrounding the government’s agreement with China Harbour.

“We have a number of concerns about this particular project, this is after all a huge project … for the Cayman Islands and it’s incredibly important that we get it right,” Mr. Bellingham said. “I’m not going to get into the technical detail of all of this. The [Framework for Fiscal Responsibility] … makes it very clear that procurement must be carried out to very high standards.

“I’ve asked [the premier] to reassure me as to how he will bring this process back in line with international best practice. I suggested that he seeks the views of the chairman of the CTC and the auditor general on how he will achieve this,” he added.

http://www.compasscayman.com/caycompass/2012/06/06/Concerns-over-China-Harbour-amid-World-Bank-sanctions/

 

The following January, the Compass reported that the deal had been abandoned:

 

Citing concerns about the port selection process, the United Kingdom compelled the government in the Cayman Islands, a British Overseas Territory, to drop negotiations with China Harbour in November 2012.

http://www.compasscayman.com/caycompass/2013/01/25/No-clarity-on-Spotts-money/

 

This whole business led to a row about who knew about the tentative agreement, which had been signed with China Harbour Engineering the previous year. From the Cayman Compass in April 2013:

 

A tentative agreement between the Cayman Islands government and the China Harbour Engineering Company was signed without formal approval from a majority of Cabinet members, two Cabinet ministers confirmed to the Caymanian Compass on Wednesday.

The now-expired framework agreement signed in March 2012 by government officials and a representative of the China Harbour Engineering Company for the development of a cruise ship berthing facility in George Town reveals that Cayman could owe the Chinese state-owned developer significant amounts of money.

In addition, documents made public Tuesday by Grand Cayman legislators Arden McLean and Ezzard Miller also reveal concessions proposed as part of a “summary of definitive agreements” on the project. However, that agreement was never put into effect and negotiations with the Chinese company were abandoned last November when the UK government intervened and scuttled the process.

The release of the information was the first some Cabinet members had heard of the framework agreement with China Harbour.

“I had never seen the agreement until [Tuesday] night,” Health Minister Mark Scotland said. “We would get very brief updates in [United Democratic Party] caucus, but it was never tabled or approved in Cabinet.”

Deputy Premier Rolston Anglin confirmed the framework agreement with China Harbour never came to Cabinet for formal approval.

http://www.compasscayman.com/caycompass/2013/04/04/Cabinet–We-didn-t-OK–CHEC-agreement/

 

It is ironic that the UK Govt were concerned enough about the whole procurement process to order negotiations to be ended. Now the same government seem to be putting their weight behind China Harbour Engineering’s bid to build the Swansea Bay Lagoon.

The Lagoon project is still awaiting planning approval, but, given the government’s desperation to push ahead at any cost, it seems likely this will not be long delayed.

7 Comments
  1. Roger Dewhurst permalink
    June 7, 2015 4:53 am

    ROGER DEWHURST
    M.App.Sc.

    CREST ENERGY KAIPARA PROJECT

    Abstract:
    The Crest Energy Kaipara Project will fail for two reasons. Magnetic sands will damage the turbines and reduced tidal currents in the turbine field will result in deposition of sand around the turbines with resulting loss of performance and possible destruction of the undersea cables.

    Introduction:
    It appears to me that certain issues in relation to this project have been un-noticed, ignored or given insufficient weight by the Environment Court, the Northland Regional Council and the Department of Conservation, the authorities principally concerned with the protection of the environment and the people.

    Although much emphasis was put on environmental issues certain technical issues appear to have been largely or wholly disregarded. Among these are the post glacial and historical development of the coast and the harbour, the mineralogy of the sediments in and around the harbour entrance, the nature of the sands forming North Head, the effect of artificial structures in the Graveyard channel and the effect of magnetic particles in the magnetic fields surrounding the turbines.

    The principals involved are all so fundamental that I am surprised that they have escaped due attention. In my view a combination of these omissions will lead to the total failure of the project with consequent adverse effects to Northland.

    Post glacial history:
    Let us consider the Kaipara 20,000 years ago at the climax of the last glaciation. Sea level was nearly 100 metres lower and the coast many kilometers to the west of its present position. The shore was probably fringed with sand dunes much as it is today. The land, now swallowed by the sea, was probably forested. One might surmise that the Kaipara and Northern Wairoa Rivers meandered through forested valleys to join somewhere north of what is now South Head before flowing west to the sea.

    16,000 to 18,000 years ago the climate began to warm and as it did the sea level began to rise. This continued until about 11,000 years ago when the climatic reversal known as the Younger Dryas took place. Warming and sea level rise recommenced about 10,000 years ago before reaching a climatic maximum about 6,000 years ago when sea level was several metres higher than it is now as we can see from the raised beaches at Kaiaua. As the sea rose and inundated the lowland forest the coastal dunes migrated inland to form North Head as it now is.

    By now the Kaipara Harbour had formed. As the silting of the harbour was, as yet, little advanced and sea level was higher, tidal flows were greater. The gap between South Head and North Head was probably formed to accommodate this greater flow. As the harbour silted and sea level fell slightly the Tory Shoal and the Southern Shoal formed limiting the main flow though the narrow channel which came to be known in recent times as the Graveyard because of the hundred or so ships that foundered there.

    Recent history:
    There are now two coastal currents. One flows north along the west coast of the North Island and the other flows south along the west coast of Northland. They converge off Northland. When North Head was formed I surmise that the southbound current predominated. Now the northbound current is dominant off the Kaipara Harbour. These currents control the movement of sand along the coast. I surmise that the southbound current may have been dominant until perhaps until the end of the Little Ice Age. I doubt that the sailing ships of one hundred and fifty years ago with their relatively primitive navigation equipment could have regularly got through the harbour entrance as it now is. I surmise that the shoals that now bound the south side of the entrance channel are of relatively recent formation and due to the increasing dominance of the northbound current. Evidence was given to the Environment Court that the south-west of North Head has been eroded since the harbour was a major port.

    Magnetic sands:
    There are deposits of titanomagnetite, black ironsand, from Wanganui northwards. This titanomagnetite originates largely from the andesite volcanoes of Taranaki and to a lesser extent from central North Island andesites and transported down the ancestral Waikato River. This highly magnetic mineral is transported northwards by the northbound coastal current and by wave movement. Evidence was given to the Environment Court that deposits of this mineral occur around the entrance to the Kaipara Harbour after storms. The significance of this evidence escaped due attention. I surmise that the magnetic mineral enters the Graveyard channel, where the turbines will be located, via the southern shoals on a rising tide particularly when there is a strong swell from the south west.

    Generators:
    A universal characteristic of electrical generators is a very strong magnetic field between the stator and the rotor. The proposed turbine rotors are some metres in diameter with a large hole in the centre. Thus the bearing surface must lie between the rotor and the stator which is the peripheral housing of the rotor. For efficiency the stator and the rotor should be as close together as possible but there must be some gap. How will the design, if indeed it does, prevent particles of titanomagnetite which will vary between 0.1mm and 0.3mm getting into the intense magnetic field between the stator and the rotor? Does the rotor behave like a giant sanding disk when the magnetic mineral adheres to it? What protection do the coils in the stator have? These questions should have been asked. It is not sufficient for the Department of Conservation and the Northland Regional Council to say “It is not our job to question the design”. If the ultimate outcome of design failure results in damage to the environment or the population of Northland is adversely affected it is within the job specifications of these authorities.

    North Head:
    North Head is composed principally of wind blown dune sand. There are two cemented layers within it visible from a boat in the Graveyard channel. These layers are probably, I say probably because I have only seen them from a boat, ancient soil horizons dating from periods of dune stability. The marine chart shows quicksands in the south-west part of North Head. Unconsolidated wind blown sands are particularly prone to erosion by water. That the North Head has been formed as I have suggested earlier can easily be demonstrated with one or more reverse circulation bore holes drilled to about 40 metres below sea level, or perhaps less. Such a bore, or bores, will show, I anticipate, the remains of a forest which can be carbon dated to six thousand years old or a little more.

    Channel hydraulics:
    Structures, natural or otherwise, on the floor of a channel slow the flow of water. That is a simple fact. The structures that Crest Energy propose to emplace in the Graveyard channel will slow the flow. Crest could not abstract any energy if it is otherwise. The volume of water flowing into and out of the Kaipara Harbour with each change of tide will not immediately be changed by the proposed structures. However, as the velocity is decreased in one part of the channel cross section it will increase somewhere else. That is simple. I suggest that it will increase to the north of the Graveyard channel because the sands are finer and because they are not being incremented by coarser sands passing over the southern shoals. The size of particles moved by currents depends on their size and density as so well described in Stoke’s Law. The unconsolidated sand of the southern part of North Head will removed elsewhere by the faster current and sands will be deposited where the turbines are located. As the water shallows and the velocity declines barnacle, mussel, oyster and weed growth on the turbine substructures increases and further slows the tidal flow through the turbine field while it increases velocity to the north and erodes North Head.

    The main cables:
    The steadily growing body of sand on the channel floor will cover the mesh of cables connecting the turbines and make it increasingly difficult, and eventually impossible, to maintain the network and lift the turbine generators for maintainance. As the new channel cuts into North Head the main cables will be exposed. These will be, according to the evidence, be held on the bottom with large pieces of concrete. When the bottom is no longer there the cables, laden with their lumps of concrete, will swing freely in the tide some metres above the bottom.

    An interesting and quite relevant aspect of the metallurgy of copper is that of annealing and stress hardening. Annealed copper is very soft and flexible. Bend it repeatedly at the same point it becomes stress hardened and brittle. Then it bends no further but it breaks. You may try this for yourselves. Take a short strand of copper wire, about as thick as a pencil lead or a little less, and heat it to red heat. That anneals it. When it has cooled bend it. It will bend easily. Now try and straighten it. It will not straighten at the bend because it has been stress hardened. That will happen to the weighted cables swinging in the tide. I suggest that they will break. You may visualize the consequences.

    May 2011.

  2. June 7, 2015 6:39 am

    June 10 is the scheduled date for Amber Rudd’s decision (3 months after the Planning Inspectorate report to the SoS for Energy). The Government seem hell-bent on bringing forward unaffordable and intermittent green crap. They haven’t a clue what they are doing when it comes to our future supply of reliable and affordable electricity.

    The ‘lights going out’ gets ever nearer and there is still no sensible energy policy. Instead the Government keeps digging the hole deeper.

    Christopher Booker highlights the issue again at http://www.telegraph.co.uk/comment/11657474/Insane-crazy-the-riddle-of-the-sands-in-Swansea.html#disqus_thread

  3. June 7, 2015 9:25 am

    The good thing about the tidal lagoon concept is it is one step away from creating a polder and a new airport/port. Japan’s cost over $11 billion, of course it is useless as a device for generating electricity and would never pay off the cost especially with a rise in interest, if you are really serious you would build a causeway between Cornwall and Ireland and Scotland and NI generating more power than the nations would ever need.

  4. June 7, 2015 10:35 am

    Maybe the Great Wall of Swansea could make money as a tourist attraction.

    Then again, maybe not :/

  5. June 7, 2015 11:37 am

    Reblogged this on Tallbloke's Talkshop and commented:
    All hail the Great Wall of Swansea! What could possibly go wrong?

  6. June 7, 2015 11:45 am

    Reblogged this on rennydiokno.com.

  7. interested3rdparty permalink
    June 7, 2015 3:36 pm

    And only 3 days after announcing this unholy alliance in the House of Commons and playing up how good it is for Britain that the construction work is going overseas, Cameron had the gall to call for a global clampdown on corruption!

    You couldn’t write it.

    http://www.bbc.co.uk/news/uk-politics-33025225

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