Taxpayers foot £4.5m bill for contaminated land deal
Site bought from Murray firm had to be cleaned up for housing plan
A QUANGO has made a multimillion-pound loss on contaminated land it bought from a company led by former Rangers owner Sir David Murray.
Clyde Gateway paid £4.5 million to the businessman’s property company for 16 acres of derelict land in Dalmarnock in the east end of Glasgow five years ago.
However, it was later revealed that Murray Estates had paid just £375,000 for the plot in 2005 and the purchase was followed by the economic downturn, which decimated property values.
Now the public body set up to capitalise on last year’s Commonwealth Games has admitted it has sold the site for £4,822,480 plus VAT, after spending £3 million making it suitable for use. Six further acres, worth a further £1,690,000, were included in the pot.
With the Clyde Gateway spend on the land totalling £9,239,000, the loss on yesterday’s deal amounts to £4,416,600 when VAT is stripped out. Glasgow Cathcart MSP James Dornan said the disposal underlines the “poor value for money” taxpayers received due to the original high price paid for the land.
He said: “I welcome the building of new homes on this prominent site. But the figures show how we, as taxpayers, got a bad deal when Clyde Gateway purchased the land in the first place.
“Clearly, we all got poor value for money when Sir David’s firm was handed £4.5 million for it.”
Clyde Gateway purchased the site of the former Dalmarnock Power Station, which had contaminated the surrounding land with chemicals between 1915 and its closure in 1977.
Pollutants included Japanese Knotweed, which is known to damage property and the site was also used by fly-tippers.
The land lay outwith Clyde Gate- way’s operating plan but the public body said it pressed on with the purchase, mainly because it was an eyesore.
Records stated Sir David’s Murray Estates had paid just £375,000 for the land in 2005.
In justification, the public body said it had asked the property firm Ryden to carry out an independent valuation, which had produced a figure of £7,330,000.
Clyde Gateway yesterday revealed it had sold the riverside site plus six further acres to social landlord Link Group, which is planning to build 550 homes, including social housing, for £4,822,400.
The money has been provided by Glasgow City Council through the Scottish Government’s housing supply programme.
Clyde Gateway’s chairman, Lord Smith of Kelvin said: “We have stepped in to deal with market failure
“Having initially purchased the site and followed it up with a spend of £3m on decontamination and infrastructure improvements beneath the surface, we have found a very able and willing development partner who will deliver the type and quality of housing that the community here requires.”
Clyde Gateway was asked what Lord Smith meant by “we have stepped in to deal with market failure” but declined to explain.
Murray Estates also declined to comment.