Councillor David Henderson, who represents the Inverness Ness-sideward, was speaking after a board meeting in Wick on Friday whichwas held following a visit to the innovative heat and power plantin Pulteneytown.

    The Liberal Democrat representative was unanimously elected aschairman and is one of six Highland councillors on the new board ofdirectors that also includes Wick member Katrina MacNab.

    The local authority took control of the project after itencountered technical and funding problems which led to delays inthe switch-over from the oil-fired system to one producingelectricity from woodchip and could have resulted in a £4.5million guarantee given by the council being called in.

    The authority has already committed £1.6 million to thescheme which has provided 240 local homes with cheap heat andwater.

    The new plant was due to start last September last year.

    Mr Henderson, who is a consultant in business and regionaldevelopment and previously was the head of industrial developmentat Highlands and Islands Enterprise, said: "The Highland Councilhas been a major funder of the company since it was set up inDecember 2004 and has taken control in an attempt to ensure asustainable future for the operation. There are many challengesahead but we have a good team in place, who are prepared to workhard to bring this enterprise on stream. The potential long-termbenefits are considerable."

    Mrs MacNab said: "We strongly support sustainable approaches toenergy production in the Highlands, particularly in areasvulnerable to fuel poverty, and all the directors are determined tosee CHaP succeed. We have a strong team of support staff in placeto help take this exciting project forward."

    She said cash-flow problems experienced by the previous board hadbeen caused by the slide in its schedule, and went on: "They hadanticipated being in a position where they were to have beenreceiving income from the sale of electricity from the system,whereas it was continuing to run on oil.

    "We can finish the job not because there is any question of the newboard being better than the old one, but because the council is abig organisation with the necessary expertise to carry it through."

    The other members of the board are: Eilean a Cheo independentcouncillor, John Laing, who is the chairman of transport,environmental and community services; East Sutherland and EddertonLiberal Democrat councillor Ian Ross, who is chairman of planning,environment and development; Jimmy Gray, the provost of Invernessand leader of the Labour group; and SNP councillor for Wester Ross,Strathpeffer and Lochalsh Jean Urquhart, the chairman of audit andstandards.

    The Highland Council has already invested £1.6 million in theproject and has provided a maximum guarantee of £3 million inrespect of the lease finance facilities provided by the bank toChaP.

    The guarantee is for a period of 10 years. The local authority hasalso agreed an overdraft facility made available to CHaP by thebank up to a maximum of £1.9 million with £1.55 millionreleased to date.

    At its meeting on August 1, it also agreed to release operationaland development funding towards the project.

    The decision by the Highland Council to take over the running ofthe scheme was taken at a private meeting at the authority'sheadquarters in Glenurquhart Road, Inverness, at the beginning ofthe month.

    The new cross-party board will be supported by senior councilofficials and will replace the three-man board which was chaired byWick councillor Graeme Smith and comprised fellow directors DavidDunnett, representing Pulteneytown People's Project, and DerekSinclair, a senior executive with Inver House Distillers Ltd. Theheating plant is based at Pulteney Distillery.

    Mr Smith, who chaired CHaP since it was formed almost four yearsago, endorsed the decision taken by the council.

    As reported in Friday's John O'Groat Journal, he said: "My boardfelt that the council would be able to monitor things more closelyand be more flexible with situations as they arose. The timing wasappropriate as we had, despite technical difficulties, proved thatthe innovative scheme was capable of generating electricity,through woodchip-fuelled trials.

    "We had built up some liability and were running well behindschedule so we are content to step aside and let others take thescheme forward."

    * There were concerns at one point as to whether Wick's troubledheat and power scheme would survive, the former chairman revealed.

    Highland councillor Graeme Smith explained the situation to theRoyal Burgh of Wick Community Council at last week's meeting.

    He outlined the dramatic development which involved the CHaP boardstepping down and being replaced by a new Highland Council board ofsix members, supported by senior officials.

    Mr Smith said that the authority's intervention would "certainlysafeguard the heating scheme" and added: "It is good news that thefuture of the scheme is secure and has been given a new lease oflife. There had been some doubt about that for a few months."

    He added that the new board would consider how best to progress thescheme which had run out of money through falling behind scheduleand had failed to reach the point of selling electricity to thenational grid, the aspect he described as the "money-maker",identified in the original plan.

    Mr Smith commented: "Because it is green energy, it commands a verygood price."

    g.calder@nosn.co.uk

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