A PUBLICLY funded regeneration firm altered an independent valuers’ report resulting in a multi-million pound pay-out boost to a company run by former Rangers owner Sir David Murray.
Clyde Gateway has to date received £200 million of funds to regenerate parts of Glasgow’s east end.
It paid Sir David's property company £4.5m plus VAT for 16 acres of derelict ground which Murray Estates Ltd had bought just five years earlier for £375,000.
The site was the former Dalmarnock Power Station, which contaminated the surrounding land with a cocktail of chemicals between 1915 and its final year of operation in 1977.
On top of industrial pollutants, the site contained Japanese Knotweed, a plant so aggressive it can damage property. The site was also used by fly-tippers.
In its justification for reaching such a figure, Clyde Gateway, which is chaired by Lord Smith of Kelvin, said its twin boards had depended upon a value of £7.242m. The figure was contained in an independent report commissioned by the quango from the property firm Ryden.
However, after the deal attracted negative publicity, the property firm felt forced to reveal that the figure did not come from them.
In a statement they suggested: "Ryden would recommend that you contact Clyde Gateway to confirm who arrived at the figure of £7.242m in the board paper.
“Ryden provided a Market Valuation to Clyde Gateway on 26th October 2009. The value reported for the former Dalmarnock Power Station site was not £7.242m.”
However, under Environmental Information legislation, it was discovered the true valuation offered by Ryden was £5.7m – £1.5m lower that the Clyde Gateway report suggested.
The land owned by Sir David’s company was zoned for industrial use but Ryden were instructed by the quango to assume it had permission for housing, inflating its value, during the estimation.
The final figure paid to Murray Estates reflected the estimated millions of pounds needed to clean up the site. If the true Ryden valuation had been accepted by Clyde Gateway, Sir David Murray’s company could have expected to be paid around £1.5m less.
Clyde Gateway has confirmed that it had made “one key variation” in the independent report from Ryden. The effect of this was to increase the amount of land that Ryden had considered suitable for housing.
The change had been made by a member of the Clyde Gateway team, though this was not mentioned in the quango's report to the regeneration body's two board meetings which approved the deal.
The Taxpayers’ Scotland watchdog group said the public now deserve a full explanation of how the deal was reached and financed.
A spokesman said:”This raises some serious questions around the transaction and the authorities need to address them.
“A huge amount of taxpayers' money is tied up in this deal and we have every right to know the details of how the decision was reached to make a payment of that scale.”
Most of Clyde Gateway’s budget comes from the Scottish Government, Scottish Enterprise, Glasgow City Council and South Lanarkshire Council.
The quango was set up to harvest the economic possibilities created by Glasgow staging the Commonwealth Games last year.
A spokesman said: “Our Board Paper of 30 November 2009 took all the assumptions and information within an independent valuation of the site and made one key variation in relation to revising and reducing the size of area that was likely to be required for a Sustainable Urban Drainage (SUDS) system.
“This particular action, which was carried out by a very experienced Fellow of the Royal Institute of Chartered Surveyors who was part of the Clyde Gateway team, increased the amount of the site that would be available for redevelopment and in doing so highlighted its higher value.
“I can again reaffirm our previously stated position that the purchase price paid by Clyde Gateway at the site of the former power station was fully in line with the market value independently reached.”
Sir David’s company declined to comment. There is no suggestion that either the businessman or Murray Estates was at fault.
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