Bid off the rail

PLANS for a railhead at Grangestone near Girvan have hit the buffers after funding problems meant the project missed the Scottish Government’s deadline for grants towards the scheme.

The Scottish Government had set a deadline of last Monday for applications for the £2 million cash pot for projects designed to take freight off the country’s roads and onto the rails.

Ailsa Horizons had been putting together a bid to the Freight Facilities Grant (FFG) but were left facing a massive hole in their business plan when it was discovered moving cargo from Girvan to Liverpool was proving more expensive than previously thought.

Horizons’ Stuart Lindsay was, understandably, disappointed with the delay.

He said: “We were disappointed we couldn’t make the deadline for application. However, should more money become available we will look to apply for it.

“As you know, the business case for the railhead has been very tight. Towards the end of last year one of the main customers reduced the amount of traffic it was prepared to commit by about 40,000 tonnes a year.

“Clearly, we needed to fill that gap. In January this year we got a letter of intent from LandEnergy - the company that is planning to build a wood pellet mill at Grangestone and is keen to have its products transported by rail.

“We’ve been working on the costings for their traffic flows and the very short timescale allowed by the government for applications to this year’s grant scheme accelerated the process. In the time available, we have not been able to find a cost effective route for one of LandEnergy’s flows - wood pellets to its customers in Liverpool. That accounted for around 14 per cent of our traffic in the crucial first three years of the business.

“Losing that traffic takes a significant amount of money out of our annual income (after direct costs) and makes the whole thing unworkable.

“So, we will not be able to meet the current deadline for FFG. As you know, it is not clear whether the funding scheme will be reinstated after the election. You’ll understand how disappointed I am that the project cannot go ahead - particularly since Horizons played an important role in persuading the government to reinstate this grant scheme for 2011-12.”

The plan for a railhead was given widespread support from companies at Grangestone.