Row erupts over Net Zero Teesside Power steel sourcing
The £833m, government-backed gas power station in Redcar, built on the site of a former steelworks, has attracted criticism after awarding a 7,000-tonne steel contract to a Chinese firm.
Tees Valley Mayor Ben Houchen, trade association UK Steel, and a number of MPs have spoken out against the decision, which will see Net Zero Teesside Power source steel for its structures from Shanghai-based Modern Heavy Industries.
British steel engineering firm William Hare will also be involved in the project. Turner & Townsend has been appointed to oversee project management, cost control and construction scheduling, while Balfour Beatty is acting as the main contractor.
The UK steel industry has been in a precarious state for many years, with Houchen referencing its woes in his complaint: “It’s beyond belief that despite repeated warnings to government ministers, officials and the leadership at NZT, British taxpayers are set to foot the bill to import thousands of tonnes of Chinese steel into Teesside, while the UK’s own steel industry remains on its knees.
“To now use Chinese steel on the very site where our own steelworks shut a decade ago is nothing short of a slap in the face.”
Gareth Stace, the UK director general of UK Steel, said: “The decision to buy Chinese steel rather than sourcing it from British Steel just miles away, beggars belief.
“For a major, taxpayer-supported project, this is deeply disappointing and should never have been allowed to happen.”
Nic Dakin, MP for Scunthorpe where British Steel is located, was involved with the government’s emergency takeover of the steel manufacturer last year.
British Steel is around 100 miles from the Redcar site. Speaking about the decision to import the necessary steel from China, he said: “The decision of the private company, in receipt of government support, to use Chinese steel for the Teesside project is outrageous.
“Steel MPs, including myself, have made clear their frustration with this. I have spoken to the steel minister about this. He shares our concerns and is in ongoing discussions with the company involved.
“This episode does highlight the need to get the rules around procurement urgently improved from those inherited from the previous government.
“I am working with UK Steel, the steel unions, and the government to find the best way of doing this.”
A spokesperson for NZT Power said: “Our tier-1 contractors manage sub-contract procurement under fixed-bid contracts, balancing a range of commercial and technical considerations, including value for money.
“Subcontracts are awarded through transparent, competitive procurement processes
“NZT Power’s major contractors remain on track to deliver more than 50% UK content, with around £1bn of UK-based subcontracts already awarded.”
The Redcar steelworks, a huge industrial site on Teesside, closed in 2015, ending local steel production and leading to job losses. It is now being redeveloped into Teesworks, the UK’s largest freeport, with major structures, including its iconic blast furnace, demolished by 2023 to make way for green energy and industrial projects.
Net Zero Teesside Power, a joint venture between BP and Equinor, aims to become the world’s first gas-fired power station equipped with carbon capture and storage technology.
