Caithness Heat and Power To Be Wound Up

13th May 2011

The 242 households in Wick which receive their heat and hot water from Caithness Heat and Power (CHaP) have been told that attempts by The Highland Council to find a private operator to take over the district heating system have been unsuccessful and that the Council will now work with residents to reinstate domestic heating systems in their homes.

In a letter hand delivered to their homes earlier today (Friday), CHaP Company Secretary, Michelle Morris, Assistant Chief Executive of The Highland Council, advised households that the Council and the directors of CHAP have been striving over a long period to find an operator from the private sector to take over the district heating system

The Council was initially involved in discussions with a company called Clearpower. When the Council was not able to conclude an agreement with them, it entered into discussions with the reserve preferred bidder, Ignis.

Ms Morris wrote: "Regrettably, Ignis have failed to achieve the conditions required for concluding an agreement and the Council, supported by the directors of CHAP, have agreed to terminate the procurement process and not to award a contract.

"Continuing to operate the existing district heating system is not commercially viable and therefore the Council has decided that the way forward must be for houses to revert to the reinstatement of domestic heating and hot water systems.

"For Council houses, tenants can be assured that these systems will comply with the Scottish Housing Quality Standard and that the work will form part of our Housing Capital Programme.

"For tenants of other organisations (Cairn, Albyn, Pentland) the Council will now initiate discussions with your landlord about how the reinstatement work will go forward.

"For private owners the Council will contact you individually to understand your circumstances.

"Please be assured the Council and the directors of CHAP have worked tirelessly and done everything possible to attempt to make a success of the CHAP initiative and both are deeply disappointed at the outcome.

"Also be assured we will maintain the current service using the oil boiler until the reinstatements are addressed.

"We will keep you advised of developments and consult with you on how the reinstatement work will affect you."

Councillor Ian Ross, a director of Caithness Heat and Power, described the outcome as a great disappointment.

He said: "Since taking over the company, the Council has done everything possible to find a way forward for this project, which, at the outset, promised so much for Wick households. Our focus now must be on reinstating domestic heating systems in the homes and giving every help possible to households in terms of coping with the change."