Teesside corruption scandal threatens £600m factory investment

Tees Valley Mayor Ben Houchan has faced allegations of nepotism in connection with the redevelopment of the Teesworks site. Credit: Danny Lawson/PA Wire

Plans for a £600m power cable plant in Teesside are under threat as an alleged corruption scandal threatens to engulf a proposed redevelopment of the former steel mill and its titular Conservative mayor.

Global InterConnection Group, founded by British investor Edie Truell, plans to manufacture marine electrical cables and connectors on a 4,500-acre former SSI steel mill.

However, it has been revealed that the company has now opened talks with the Tyne Port Authority amid fears of increased political pressure on Teesworks and Ben Howchen, the Conservative mayor of Tees Valley, who was raised to the peerage on Friday following the resignation of Boris Johnson. /p>

Interest in the Global InterConnection Group began to waver after accusations of love deals between the mayor of Tees Valley and two local businessmen were raised in Parliament, according to senior industry sources.

Global InterConnection Group is not implicated in the alleged scandal.

Teesworks was chosen because of its free port status, which offers generous tax incentives. companies in the zone for five years, as well as access to the Redcar Bulk Terminal, a deepwater port on the mouth of the River Tees, which is one of the most attractive on the east coast of England.

Nonetheless, allegations of nepotism Mr. Houchen got bosses thinking that sources say choosing Teesworks might be «too much of a risk.» > Freeport Teeswork is the site of Europe's largest redevelopment of abandoned mines. Photo: Lorne Campbell. The choice of Port Tyne or Teesworks is planned for the end of June, according to people familiar with the situation.

This means a decision could be made too soon for the results of independent verification of allegations of love deals with two local businessmen to develop Teesworks, its flagship project and the site of Europe's largest abandoned mine regeneration.

Mr Hoshen supported calls for an investigation, stating that it would clear his name and that allegations of wrongdoing amounted to Labour's «smear campaign».

Tyne Port claims to be one of the UK's most efficient deep water ports. Although the government rejected an application for free port status in 2020, in March this year, ministers designated the North East United City Hall as one of the UK's 12 investment zones.

Truell, a former adviser to Boris Johnson, listed the shell company Disruptive Capital Acquisition Company (DCAC) on the Amsterdam Stock Exchange in October 2021, raising £125m from institutional investors.

DCAC agreed to merge in April with the Global InterConnection Group with plans to establish three divisions: high voltage cable production, investment in electrical connectors and a consulting division to provide design advice, planning and operational management for both networks and interconnecting devices.

< p>At the time, the group indicated that it had chosen Teesside for a «cable and armouring plant» along with test and research facilities in Iceland. The company said the preferred sites «have been identified.» The construction of the factories will start in the second half of 2023.

“The Teesside plant, due to reach full capacity in 2025, is expected to create more than 800 jobs, support dozens of renewable energy projects around the world and make the UK a world leader in the production and export of cables [high voltage electricity]. ”according to documents filed with the Amsterdam Stock Exchange.

Michael Gove, Secretary for Advanced Studies, initiated a parliamentary inquiry into the event. Angie Ridgewell, Executive Director of Lancashire County Council and formerly General Manager of the Business Department, was named Lead Reviewer last week along with two other senior government officials.

Leveling Secretary Michael Gove launched a parliamentary inquiry into development. Photo: Leon Neal/Getty Images

Labour MPs called for the request to be processed by the National Audit Office and argued that the commission was «handpicked» by ministers.

Andy Macdonald, Labor MP for Middlesborough, used parliamentary privilege earlier this year to say that «industrial-scale corruption» took place after local developers Chris Musgrave and Martin Corney bought a 90 percent stake in Teesworks despite something that was spent almost 250 million pounds of taxpayer money. repairs to parts of the former steel mill.

Mr Musgrave and Mr Corney denied the accusations, saying they had «nothing to hide.»

Mr Hoshen backed calls for an investigation, however, he insisted that the allegations of wrongdoing amounted to a «smear campaign» by Labour.

However, his critics argue that when transferring a share to two local businessmen, there does not appear to have been a public procurement process.

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“Regardless of the optics. We were left in a position where Chris and Martin had the keys to open the steel mill,” Mr Houchen told The Telegraph last month. «Or it stays abandoned and costs the taxpayers £20m a year and we don't create new jobs.» Global InterConnection Group and Tyne Port did not comment.