Power Plant Fails to Fuel Funds for Project, KPMG Assumes Administrative Duties

Lucas Gilmore, “Big 4″ observer
December 13, 2010 /

Failing to gather enough fuel to put up UK’s would-be first clean coal plant, which required £635 million to finish the construction, Hatfield Colliery-owner Powerfuel turned to KPMG asking the accounting firm to take administrative duties in the company.

Currently, Powerfuel Mining and Powerfuel Power, jointly owned by Richard Budge who is known to be one of the key players in the British mining industry, and head of Russian-based coal company KRU Mikhail Abyzov, are still operating normally and have not declared redundancies in over 380 jobs at the firm, but the employment remains threatened if administrators KPMG could not find a buyer anytime soon. Easing the crisis at Powerfuel would also mean continuance of the clean coal project.

In 2009, the Powerfuel’s carbon capture and storage (CCS) project based near in Doncaster fell short of £635 million funds that should have been satisfied to forward the development of ongoing project, though the company has acquired £164 million from the European Union in 2009 to fund it. Richard Fleming, one of KPMG’s administrators, said the budget deficit went on for one year, leading up to the suspension of the project.

Powerfuel is still struggling at present to fill in the gap with the funds necessary to complete its project.

Fleming said their administrative duties include selling Powerfuel’s share capital of its mining and (CCS), while the company enjoys uninterrupted operations.

KPMG’s administrative duties would also set up a sales process to invite potential buyers who would carry on with the CCS project, requiring about £30m to fuel it again, said Fleming.

 

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