Dec 172022
 

Business Improvement District entity Aberdeen Inspired kept a lid on its finances – until now. Suzanne Kelly writes.

Businesses in the BID area pay 1% of rateable value to Aberdeen City Council. Aberdeen Inspired invoices ACC for salaries, the levy, and schemes ranging from lacklustre to hare-brained.

AI’s website boasts “…we will try our best to answer any queries and engage with our audience…”. In reality AI blocked many from its social media and won’t answer Freedom Of Information requests.

Happily, a FOI to Aberdeen City Council about an AI scheme resulted in 80 invoices and 200 pages of emails being released.

These show AI invoicing ACC for the Christmas village (ACC contributing £165k in 2019 and £180k in 2018), an annual mural event (£100k pa), and more. These events are nice enough – but they do not seem to be saving businesses from folding.

The released invoices total nearly £3 million including VAT, but don’t cover all AI’s activities. Inspired invoiced the city a total of £1.6 million for the levy across these invoices – the true total is likely to be higher.

Two winners from the BID scheme were AI’s City Centre Manager and its Night Time & Eveniing Economy Manager, trousering £47k and £20k respectively per annum. What do they and AI do to earn their cash?

AI Chief Executive Adrian Watson, a retired police officer, boasted the 2018 Christmas market welcomed 631k visitors. When questioned on the absurdly-high figures, Watson said they used an external company to track footfall.

Had even a fraction of such a crowd visited nearby John Lewis and other shops, perhaps JL and other business would still be here.

During lockdown AI spent £80k on wooden ‘parklets’ (aka benches). Some were vandalized; all have since been removed in a huge waste of materials.

Many BID levy payers were shocked when it emerged £400k of central government money went on a scheme for illuminated street signs.

The 12 signs can only be read from one direction, they experience failures, and are often left switched off.

The company awarded the work (apparently with no tender exercise held) was an English firm that has since gone bankrupt.
How this was meant to help local businesses remains a mystery.

What’s the impact on retailers and hospitality of these follies plus a gift card scheme AI charged £15k to launch, £30k on a ‘place-based investment fund,’ and £6.4k for seagull nest and egg removal? Businesses are leaving in droves.

From the departure of John Lewis, potential pull-out of Marks & Spencer through to the closure of beloved restaurants, pubs and small shops, the millions AI spent have had no measurable positive impact.

Don’t assume though that Inspired don’t know how to economise. In 2015 it invited musicians to audition to play for free at the Christmas village where they could ‘pass the hat around in the usual manner.’

Mar 092021
 

By Suzanne Kelly.

It appears Marischal Square is nothing like the money-spinner city taxpayers were promised.

Within that glass box building, one of the most repugnant carbuncles to disgrace Aberdeen in recent years, government, multinationals and food businesses are enjoying sweeteners in the form of rent holidays, discounts and more.

Figures obtained through Freedom Of Information requests reveal that, to date, these sweeteners amount to nearly £4.5m.

Other costs have been estimated by the ‘We Campaigned Against Marischal Square’ group, which like Aberdeen Voice, has been fighting for data from Aberdeen City Council under FOI law.

We Campaigned posted:

“By my reckoning, since opening, MS has COST US £18 million so far. It’s taken in around £3 million and we have paid Muse/Aviva rent > £15 million plus we’ve spent around £3 million in operational costs.

How do we stop this financial mismanagement? Can we hold anyone to account? (We also have £1.3 BILLION debt to pay back the bond – interest payments of £40 million per year).”

Should the council have decided to go into the commercial rental sector with a new build? Did it have the expertise in house?

At one point the city claimed it had no idea of the amount of rent each individual business was paying, and that only Muse knew this.

If true, it’s a shocking dereliction of fiscal responsibility. Effectively, it makes freedom of information requests hard to successfully lodge, as Aberdeen Voice and ‘Stop the Desecration of Marischal Square’ have found.

The following companies moved in. The list shows the value of their sweeteners. 

Tenant / Approximate sweetener total
Aberdeen Journals Ltd / £1,710,630
Tony Macaroni / £225,000
Chevron / (£285,270 min, £570,540 max) £427,905
Ernst & Young / £570,420
Mitchells & Butlers / £187,500
Tenaris / £116,215
KPMG / £266,535
Scottish Ministers / £582,905
Costa / £59,800
National Westminster Bank / (£193,847 min £ 243,306 max) £218,576
Prezzo / £46,200
Mackies / £38,200
TOTAL = £4,449,886.00

Aberdeen City Council was less than forthcoming with this information Only after the Information Commissioner’s office interceded did they release the information.

Anyone wanting to see the actual heads of terms agreements for the rents showing duration, other perks granted eg. carpeting allowances and free parking, size of space rented, etc, will find this hard-fought-for information here. 

As an aside, when finally handing this information over, the city tried to claim the documents were so large that they could only pass them over if Aberdeen Voice opened an account with ACC.  This nonsense was quickly countered. An account with ACC to access its FOI documentation or make requests is not required.

The ‘too large documents’ were under fifty pages in total.

The city is competing with the private sector in creating this building, just a time when Brexit impacts and the changes in the oil industry reverberate. Sir Ian Wood is busy trying to convince central government to build yet more offices and industrial space in the city. Doubtless he’ll get his way.

The businesses that moved out of existing spaces to Marischal such as KPMG leave behind empty office space and take income from the private sector.

In order to compete with the private sector in a market where office space is hardly in short supply, ACC uses the taxpayers’ largess to dole out the sweeteners.

Aberdeen Voice will try to determine whether the city is giving any further rent breaks or sweeteners to their Marischal Square tenants

The businesses forced to close, yet forced to pay for Aberdeen Inspired/business rates may look with some justified envy on the treatment given to national chains, multinationals and Aberdeen Journals Ltd.

Damian Bates, disgraced former Aberdeen Journals Ltd empresario, alluded to the fact the city was already subsidising its rent at Lang Stracht.

Why a genuine news corporation would be willingly indebted to a government with so many stories that should be robustly investigated is not a mystery – the city used to spend quite heavily on advertising in the rags.

However, the P&J and EE no longer refer to Marischal Square as ‘controversial’ and seem happy to sing its praises.

The city recently said it is £30,000,000 in debt.

Many consider this figure to be considerably lower than the reality. Where it will be in a year’s time is anyone’s guess – but if it is banking on Marischal Square, it’s doomed.

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Feb 222018
 

A three-year, £350m Aberdeen Harbour expansion project chalked up a broken leg and a serious head injury in the first two months of construction. By Suzanne Kelly

Spanish firm Dragados is contracted to deepen and industrialise the Bay of Nigg, and is keen to keep a lid on its mounting problems.

According to one contractor: 
“Everybody is told at the beginning, ‘There is a group of people against the project

“We encourage you not to talk with these people in any manner, social media included.'”

Despite frequent verbal threats to would-be whistle-blowers, mounting injuries and near-misses are encouraging people to speak out.

One worker described the lead-up to the broken leg:

“On 6 December 2017 an Eastern European broke his leg when a supervisor for Dragados – with no risk assessment, no toolbox talk – instructed a forklift driver to move steel ten meters long (a practice which is frowned upon by others more experienced).”

While the steel was being moved it either hit or fell on the injured party who was rushed to hospital.

The injured man left the UK and is said to have been paid a hefty settlement.

Another person was hospitalised after someone opened the door of a lorry into their head.

One source said:

“I’d say 90% of the workforce don’t know what’s to be done as there are no plans in place.”

They claim safety material is not routinely translated for non-English speakers.

“Some of the management’s English is that poor they don’t understand certain documents.”

The HSE confirmed only one of these two accidents was reported (they would not confirm which incident this was, but they requested materials and are investigating).

One whistle-blower said:

“Dragados are now contemplating sub-contracting out most of the work as they will be unable to complete it; they simply do not have the safety systems in place.”

Javier Buron, Community Engagement Officer, Aberdeen Public Relations and Communications for Dragados SA UK & Ireland, had no idea whether he could even release the company’s Health and Safety Policy – something most companies publicise widely and are proud of.

Mr Buron promised to send a statement, but did not express concern on behalf of Dragados for the injured.

When chased for lines for publication Mr Buron said:

“We cannot issue any of these documents [no documents were requested].

“It is [for] internal use. It is illegal to share it.”

His posting to this multi-million-pound project is something of a leap; his Linked-In profile gives his previous experience as working for Aberdeen’s International Youth Festival (which is about to lose its £100k yearly council funding).

There seems to be as haphazard an approach to supply management as there is to safety and public relations.

Several sources claim 40 tonnes of non-specification stone was imported from Norway, only to be rejected as inferior.

Dragados now has to get rid of the stone and make up the financial loss.

Disenchanted workers are watching to see how this plays out while scratching their heads as to how Dragados became the preferred bidder in the first place.

Work is due to complete in 2020. No one working on site believes this is possible.

The impact of this expansion on the dwindling number of salmon, sea birds and cetaceans is another matter which doesn’t seem to have troubled Scottish environmental authorities sufficiently to make them object; time will tell the impact on wildlife.

Sceptical locals are promised cruise ships will dock. Whether well-heeled travellers will disembark to spend money in Torry’s pubs, betting shops and off-licenses is doubted.

As one source summed it up:

“It’s a complete joke.”

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Sep 282017
 

With thanks to Ross Anderson, Senior Account Manager, Jasmine Ltd.

A leading north-east accountancy firm is targeting further growth as it marks its one-year anniversary in Banchory after expanding in to Deeside.
James Milne Chartered Accountants acquired the business of AC Howat Chartered Accountant in September 2016 and moved into a new office in the Banchory Business Centre.

Established in 1888, James Milne has a team of 30 staff and partners across its offices in Aberdeen, Inverurie and Banchory who provide accountancy, taxation and business services to a range of business and personal clients.

The firm, which prides itself on its partner-led approach, has seen growth across all areas over the last twelve months.

Partner Richard Christie, who heads up the Banchory office, has worked with colleagues Lauren Thompson and Bill Urquhart to increase the firm’s client base in the area.

He said:

“We’ve had a very promising year since setting up in the Banchory Business Centre and the team has done an excellent job working with new and existing clients to provide a range of accountancy and taxation services.

“Being able to expand into Banchory and Deeside was a significant step for the firm and we are very excited about continuing to develop the relationships with our existing clients as well as the potential for further growth in the area.”

James Milne also provide support to businesses and are regularly contacted by people who are looking to start their own company and require advice. The firm’s range of services, includes, accountancy, business taxation, bookkeeping, payroll services and tax planning.

Bill Urquhart worked with Alan Howat for 13 years in Banchory and has helped to maintain important links with clients.

He said:

“It’s been a very quick year but it feels like there’s been a seamless transition and I’m delighted to be working with so many longstanding clients.

“We have a good team here in Banchory and Richard, Lauren and myself are on hand to assist clients with their accountancy needs and meet with people and businesses who want to find out more about our services.”

James Milne serves both personal and business clients across a diverse range of industries, from the Aberdeen and Aberdeenshire staples of oil and gas and agriculture through to retail, hospitality, fishing, haulage, trades, construction and many more. For more information, please visit: www.jamesmilne.co.uk

May 252017
 

By Ian Baird.

Every time a report is written about the Harbour Board’s expansion plans into the Bay of Nigg, there is invariably a reference to a Scottish Enterprise report which justified the project in economic terms, along the lines of, ‘An independent study, commissioned by Scottish Enterprise, estimates that the development will generate an additional £1 billion per annum to the economy by 2035 and will create an additional 7,000 equivalent jobs.’
But that Report was written in December 2013, three and a half years ago and therefore pre-dating the current prolonged oil downturn.

Before finally committing to the project in December when a contract was agreed with Dragados, surely in the light of what is acknowledged to be a significantly changed trading environment, the assumptions and projections made in the Biggar Report should have been reviewed?

Had this been done with any vigour, it is difficult not to come to the conclusion that the business case for £350+ million development no longer stands up to scrutiny and proceeding with the development on that basis cannot be justified.

Let’s look at some aspects of the Report from the perspective of 2017.

1) Harbour Capacity: One of the most compelling arguments emanating from the Harbour Board as justification for the expansion was that the harbour was working at or near full capacity. The argument was echoed in the Report which stated:

“It is clear additional capacity is required to retain activity in the oil and gas sector in Scotland.  If this capacity is not developed, then there is a risk that new and existing demand will be lost to Norway. Capacity constraints at the Harbour are also likely to hinder existing and potential users from developing new market opportunities in areas such as renewable energy, decommissioning, passenger ferries and cruise liners.”

As the construction of the expansion begins, is the existing harbour still running at or near full capacity? The Report noted that arrivals to the port in 2012 numbered in excess of 8,100. Based on the Board’s statements we have to assume this figure is close to maximum capacity. By 2014 arrivals were very similar at 7,937, but in 2015 they dropped to 7,428 and then precipitously to 6,462 in 2016 (unpublished).

That’s more than a 20% drop in traffic activity from the 2012 high to 2016. In short, the harbour is no longer working at or near to full capacity. Of course, had the arrivals levelled off at around the 8,000 mark, it could be legitimately argued that capacity issues were inhibiting expansion but with a 20% drop in activity it is clear that this is quite simply a downturn in business.

To update, the first 4 months of 2017 are no better than the equivalent period last year; and so just as the heavy plant moves in to the Bay, annual arrivals are around 1600 fewer per year than when ‘at or near maximum capacity’.

When challenged about declining arrivals at the 2016 AGM, Chief Executive Colin Parker argued lost business because of larger vessels being unable to enter the harbour were the main cause of the decline. This seems a curious statement given that vessels as large as 20,000 tonnes have used the harbour and yet the average gross tonnage is only about 4,000 tonnes. Two of the largest ships using the harbour are the passenger ferries plying to the Orkney and Shetland Isles. They each have a gross tonnage of 11, 720.

How many arrivals were there of vessels with a gross tonnage of over 10,000 tonnes, other than the ferries, using the port in a year? In 2015, only 21 out of 7,428, or .002%; in 2016, ever fewer at 11. Apart from the ferries, the upper 50% of the tonnage capacity range (10,000 to 20,000 tonnes) is virtually unused.

Where is the evidence that lack of size capacity is inhibiting business?

Fig. 1: The Harbour Board claims the existing harbour is too small for larger vessels. This graph shows that, apart from passenger and freight ferries running to the Northern Isles, the upper end of the tonnage capacity range from 7000 tonnes upward is barely utilised by oil-related, cargo or other vessels.

2) The new market opportunities identified in the Reportrenewable energy, decommissioning, passenger ferries and cruise liners – are central in the projections of increasing traffic to the expanded facility. How well does potential success in these markets stand up to scrutiny from today’s perspective? Let us look at each in turn:

Renewable Energy: Despite initial enthusiasm for chasing business in this market, the Harbour Board has been very quiet about prospects in this sector since the Report’s publication.

There has probably been a belated recognition that weaknesses in the local infrastructure (inadequate roads network for heavy and wide loads, lack of fabrication facilities) and being close to neither centres of turbine and blade manufacture nor to the offshore areas identified as potential for offshore wind arrays, means that there are no specific advantages, and several disadvantages, for suppliers of renewable energy components considering using Aberdeen as a transport base.

Biggar suggests a need for creating industry clusters around key infrastructure investment locations, and that one such cluster should incorporate the supply chain for offshore renewables by developing the land beside Nigg Bay as a marine renewable cluster in Aberdeen City and Shire.

Fine words, but despite the fact that construction of the harbour expansion is under way, there seems little action towards this suggested initiative and there seems inadequate land available to develop a suitably well-equipped cluster as proposed.

Decommissioning: Although the total decommissioning market is huge, Aberdeen’s potential to handle significant elements of it will again be limited by onshore infrastructural weaknesses and by the lack of deep-water berthing. Since the Report was published, many other ports in Scotland, North-east England and Norway have signalled their determination to secure a share of the decommissioning market.

Many, such as Dundee, Cromarty, Kirkwall and Scapa Flow are already well ahead in extending infrastructure and capacity. In what will be a highly competitive scramble for work, it is difficult to see Aberdeen, coming late into the game with improved facilities in 2020, attracting any more than relatively minor contracts.

Ferries: Apart from its inclusion in the Report as one of the potential markets for the expanded port, no evidence or research is offered to substantiate the sector as a potential market. The Northern Isles are the only destinations with a regular ferry service to Aberdeen. The existing ferries are large and, although running near to full capacity at peak holiday periods, for much of the year they are running well below.

At current passenger and freight usage levels, larger ferries plying those routes would not be cost-effective. NorthLink have not identified any need, nor expressed any interest, in introducing larger ferries to Kirkwall and Lerwick.

Cruise Ships: The Report predicts that up to 40 cruise ships could be attracted to the new harbour each year but there are quite a number of qualifications to that figure:

“If a new harbour is built and [if] improvements are made to surrounding roads infrastructure then this may make the harbour a more attractive destination for visiting ships. For example road improvements may make it easier for coaches to access to the quayside, which would make it easier for cruise companies to organise excursions for passengers. The additional space may even make it possible to create dedicated visitor reception facilities. [My emphasis]”

The projection of 40 cruise ships per annum is therefore very speculative. While it is true that the average size of cruise ships is rising, ruling out many of them from the opportunity of docking in the existing harbour, it does not follow that a sufficiently large harbour will attract those larger ships. A bigger swimming pool doesn’t necessarily mean more (or larger) swimmers, perhaps just more space per swimmer.

If we compare the new harbour with, for example, Shetland’s port at Lerwick, which is projected to attract 80 cruise ships in 2018, there must be some doubt about its attractiveness as a destination, requiring as it will a bus journey with views (and possibly smells) of a sewage works, possibly an incinerator, Altens industrial estate and a complex onward route to get to either Aberdeen city centre or to Deeside.

In fact, all of the Report’s projections of future economic gains are qualified by the recognition that for their predictions to be realised it would be necessary ‘to upgrade the roads infrastructure in the surrounding area’.

We are now embarking on a £350 million development, not only in the absence of any such planned upgrade, but with the economics of the North Sea oil industry considerably changed for the worse, and with technological changes and innovations which lessen Aberdeen’s ability to attract certain kinds of business (for example the commissioning of the Pioneering Spirit vessel which can lift and transport complete platform topsides of up to 48,000 tonnes to a limited number of deep-water berths).

There is no doubt that on the completion of the new harbour, some additional types and sizes of vessels will visit the port.

The question is: will they do so in sufficient numbers and frequency to justify a £360 million investment and the permanent loss of a valuable amenity to the local community?

To fulfil the expectations of the Biggar Report, harbour activity not only has to regain the current 20% loss of traffic but has to utilise to near capacity the additional 25% berthing the expansion will enable. That’s 45% above current activity.

Given that the mainstay of the harbour is oil-related business and that it is not contested that it is an industry in decline, there must be a huge question mark over the prediction that in Year 20 of the Report’s projections the net economic impact of Aberdeen Harbour in the City and Shire will be 12,350 jobs and £1.8 billion GVA (Gross Value Added).

The questions are these therefore. What re-evaluation of the Biggar Report was undertaken prior to the final decision to proceed with the expansion into the Bay of Nigg? Is anyone from the Harbour Board, Biggar Economics or Scottish Enterprise prepared to stand by the projections in the 2013 Report? If not, on what basis is the project proceeding?

Sources: Economic impact of Aberdeen Harbour Nigg Bay Development – A final report to Scottish Enterprise, Biggar Economics, December 2013

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May 192017
 

With thanks to Esther Green, Senior Account Executive, Tricker PR.

One of the biggest shake ups of European privacy legislation which is expected to have a significant impact on the way business is done comes into force in 12 months’ time.

It’s going to have a huge impact on how businesses store and process data and carries tough penalties and hefty fines for breaches.

The Government will implement the General Data Protection Regulation and it is expected that the UK will continue to comply with GDPR after Brexit – so all businesses should be assessing how they use personal data and how this legislation will affect the sector in which they operate.

Advanced planning is key to ensuring compliance with the new legislation which comes into force from 25 May 2018, according to Austen Clark, managing director of Clark Integrated Technologies.

 “The changes that will come with the 2018 deadline will have implications for businesses of all sizes that handle the personal data of EU residents, regardless of location,” Mr Clark states.

“The GDPR is going to have a huge impact on how businesses store and process data and they need to act now to make sure they are properly prepared for this major overhaul of data protection legislation which will impact on us all. Dedicating time to this now will ensure businesses have procedures in place to be able to comply with the new regulation.

“This isn’t just for big businesses – a gym that offers a members’ loyalty scheme or a one-person chiropractor that asks patients to complete a wellbeing form will have to ensure that personal data is stored in line with the new regulations and not breach them.”

GDPR will directly apply in EU countries and replaces ageing European and national data protection legislation, with companies given until until May next year to adopt the measures and become compliant.

Influenced by technological advances, it introduces new accountability obligations, stronger rights and ongoing restrictions on international data flows. GDPR seeks to protect individuals whose personal data is handled by companies. Data processing refers to the handling, storage, evaluation, reference or general use of information relating to individuals. Businesses should only be collecting necessary data and discarding it when it is no longer required to protect data subject rights.

So an online retailer running a small e-commerce site that holds customers’ personal details is subject to GDPR regulations. And any company or individual providing marketing, IT, accountancy or business support that may have access to a wealth of client and customer data needs to ensure this is collected, stored and protected in specific ways.

One of the biggest considerations of the new regulations is ensuring sensitive data is handled correctly.

Government help to prepare for the regulation is available, with webinars, training courses and data flow audits and Mr Clark suggests a good starting point is to carry out a gap analysis of current processing in line with GDPR.

“Understand what data you hold, how you are using it, and make sure that you are practising good data hygiene by limiting access to data to only those who need it, and ensuring that authentication protocols are up-to-scratch for those users,” Mr Clark advises.

“Businesses should also consider deleting data that is no longer required so that it does not become an unnecessary risk.”

Clark IT is already working with clients to assess how GDPR will impact on them and the sector in which they operate, to guide them through the complexities of the legislation and to ensure they become fully compliant. The IT specialists can take clients through the process from start to finish using its unique portal and working with partners to cover legal, datacentre, insurance and finance matters.

While it may seem like a daunting process, GDPR should not be viewed as unnecessary red tape says Mr Clark, who predicts that the legislation has the ability to bring benefits to both businesses and individuals.

Mr Clark states:

“This creates a new single data protection act, and has scope to bring increased consistency to data protection practices, eliminating problems arising from the existence of different national variations.

“There are enhanced powers given to data protection authorities in tackling non-compliance and it will also be easier for individuals to claim against data controllers where their data privacy has been infringed.

 “GDPR will also give individuals greater control and rights over their personal data. As a result, individuals will be able to request that businesses delete their no longer necessary or accurate personal data.

“The regulation could also prove to be an advance in the war against cybercrime, given mandatory breach notifications. Taking GDPR seriously will see businesses invest in, and demonstrate, high levels of security which could in turn raise customer trust.”

Clark IT based near Turriff in Aberdeenshire is one Scotland’s leading independent providers of managed ICT solutions with a broad range of corporate and commercial clients not only in the North-east but across Scotland and beyond.

Its clients benefit from the specialist knowledge of its 26-strong workforce to support their systems and through managed IT services. Clients also benefit from Pro-active IT Support, 24/7 Monitoring, A virtual IT Manager, predictive IT costs and a strategic IT plan tailor-made for their business.

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Apr 202017
 

With thanks to Esther Green, Senior Account Executive, Tricker PR.

Austen Clark, managing director of Clark Integrated Technologies.

A major UK business survey revealing that a fifth of British businesses have been hacked by cyber criminals hammers home the need for all firms to ramp up their defences against cybercrime.

With only a quarter of firms surveyed by the British Chambers of Commerce (BCC) saying their business has security measures in place to guard against hacking, Austen Clark of Clark Integrated Technologies warns that too many firms could be exposing themselves to the very real danger of being hit by cybercrime.

Mr Clark, managing director of the Turriff-based ICT firm, says that the BCC report published this week drives home need for all businesses ramp up security defences to protect against hacking – and there are simple, tangible actions that all organisations can follow to reduce their risk of becoming a victim.

Larger companies – defined as those with at least 100 staff – are more susceptible to cyber attacks, according to the report, which found that 42% of big businesses had fallen victim to cybercrime, compared with 18% of small companies. Only a quarter (24%) of the survey’s 1,200 respondents said their business had security measures in place to guard against hacking.

Cybercrime can jeopardise a firm’s finances, confidence and reputation as well as causing disruption to business and productivity, warns Mr Clark, adding that while data breaches at web giant Yahoo, telecoms firm TalkTalk and the dating website Ashley Madison are the ones to grab headlines, the BCC report shows how worryingly widespread the problem is across the economy.

Mr Clark says:

“The internet brings huge opportunities but it also brings risks and every single day businesses face cyber-attacks, with attempts to steal information and money, or disrupt business. It is increasingly important to manage these risks to take advantage of the internet whilst protecting your business.

“As cybercriminals become more determined and better organised, no business can afford to take its eye off the ball. Firms of all sizes, from major corporations to one-man operations, can be victims so all need to be proactive about protecting themselves from cyber-attacks.

“Cybercrime is a bit like the elephant in the room – everyone has heard of it and has stories relating to ‘other businesses’ but no one wants to admit they have been hit by a cyberattack as there seems to be a stigma around being a victim of a scam or con. But reports like this one show the alarming extent of the problem, and its impact on the economy.”

The good news is that there are regular and simple actions that can be taken to help businesses promote good cyber health and Clark IT advises the following:

  1. Install and update anti-virus, anti-spam, and firewall/s
  2. Carry out regular updates on all software and devices
  3.  Change your password regularly (make it difficult to ever guess)
  4.  Secure your network
  5.  Provide clear and concise procedures for handling email, internet and mobile devices
  6.  Train your people in good security practices
  7.  Implement and test backup plans
  8.  Carry out regular security risk assessments to identify important information and systems
  9.  Carry out regular security testing of your business
  10.  Be suspicious – not everyone is a prince with $100 million dollars to send your way

Hacking attacks on British businesses has been said to cost investors £42bn.

Clark IT is based near Turriff in Aberdeenshire and is one Scotland’s leading independent providers of managed ICT solutions with a broad range of corporate and commercial clients not only in the North-east but across Scotland and beyond.

Clark IT clients benefit from the specialist knowledge of the firm’s 26-strong team to support their systems and through managed IT services. Clients also benefit from Pro-active IT Support, 24/7 Monitoring, A virtual IT Manager, predictive IT costs and a strategic IT plan tailor-made for their business.

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Apr 132017
 

Port of Malaga. Photo by Daniel Bichler.

By Ian Baird.

When in December Aberdeen Harbour Board’s Chairman Alistair MacKenzie signed the contract with Dragados’ representative in Scotland – Daniel Paunero Alonso – to build the harbour’s £350 million expansion into the Bay of Nigg, it was the culmination of an an idea which had been conceived six years earlier.

Against stiff local opposition, with multiple planning and maritime applications to overcome, and complex loan agreements to negotiate, Chief Executive Colin Parker, the Chairman, and his fellow Board members must have breathed a huge sigh of relief when finally reaching the stage where building could commence.

But Daniel Alonso would have had a smile on his lips too. He had helped secure a huge contract for his firm in his operating region of Scotland.

Three years earlier, Daniel’s star wasn’t shining so brightly. In October 2013 in his then capacity of Manager of Dragados in Spain, together with Sanchez Domines, President of Dragados’ parent company Sando, he was summoned to testify as a defendant in a tribunal case in Malaga. The pair’s presence was required to answer allegations of irregularities in projects undertaken by the two companies at the Port of Malaga in 2008.

The Port was claiming losses amounting to a total of €5.3 million as a result of work carried out which subsequently proved not to be done to specification. The prosecution in the case, which is still ongoing after 5 years of investigation, is demanding a total of 26 years of imprisonment for 5 directors and engineers of the two companies for the crimes of document falsification, embezzlement and fraud.

Is this important as far as the Harbour Board is concerned?

Well, it may be the end of the planning and approval stage, but it’s only the beginning of what will be, at a minimum, three years of construction. Entrusting Dragados with this major project should mean that the Harbour Board has exercised due diligence in satisfying itself that the company has a sufficiently impressive record to give them confidence that the construction will be completed on time, on budget and to the required specification.

Is it possible that in their haste to ensure that planning, financial and contractual matters all fell into place, the Harbour Board, inexperienced in awarding such a large contract and struggling to raise the necessary finance, were overly hasty in agreeing a deal with Dragados, lured by the most attractive tender price to the exclusion of other considerations?

Had the Harbour Board investigated the details of the problems in Malaga, they would have found that there were two projects that ran into problems after their completion.

what happened in Malaga should, at the very least, have sounded a warning bell or two

The first was at the South cruise ship mooring in the Port which had been built in a joint venture between Sando and Dragados. Following a slight collision with the mooring by a cruise ship in 2008, an investigation into the damage to the pier established that fewer, and thinner, pilings had been used in its construction than had been specified.

In this case a State General Inspection concluded that the discrepancy in value between what was paid for by the Port and what was built by the two companies amounted to €1.8 million.

The second project which ran into trouble at the Port was at container dock no. 9. This was also a joint venture with Sando, but in this case Dragados was the leading partner.

After a particular vessel was unable to access the dock, it was discovered that the excavated depth of the mooring was less than had been specified and, additionally, that debris had been dumped in it. In this case the discrepancy between what was charged for by the companies and what was delivered was estimated at €3.6 million.

In addition to these very specific problems with a failure to build to specifications, there were also in both cases significant cost hikes.

The budget estimate for building the South mooring was €8 million but eventually cost €12.21 million – 50% over budget; the budget estimate for container dock 9 was €28.2 million but eventually cost €35.9 million – 25% over budget.

From the perspective of Aberdeen Harbour Board what happened in Malaga should, at the very least, have sounded a warning bell or two. Of course it is true that Dragados have been involved as contractors in many major projects without landing in court as in this highlighted case. But globally their record of completing projects on time and on budget where they are a major contractor on very large projects is very patchy [1].

By giving Dragados the major responsibility for a £350 million (budgeted) project (almost 10 times as much as the budgets for the two Malaga projects combined), has the Board considered a) the likelihood and b) the implications, of a cost increase and/or a delayed completion time?

Let’s say there was a 20% increase in costs and a 30% increase in construction time. Can the Board finance, for example, a £420 million project which takes four years to build instead of three?

Even if they can, will future business be able to service the loan or will the cruise ship and decommissioning markets prove to be elusive in the face of aggressive competition and a possible severe economic downturn? The combination of a cost escalation, a delayed completion date and a continuation of the oil downturn in the North Sea could prove to be a fatal combination for the Harbour Board’s ambitions.

if the Bay is to be lost it should at least be for very tangible benefits for Aberdeen

This article does not accuse Daniel Alonso of being complicit or having any knowledge of the failings in the two projects in Malaga and perhaps not too much should be read into the fact that he is now in Scotland rather than managing the company’s home territory.

But it seems extraordinary that with so much at stake, the Harbour Board is totally reliant on a company which has proved in the past that its management team failed to ensure adherence to specifications on two major harbour projects and exceeded budgeted costs so spectacularly.

Historically, one of the benefits to local communities of Trust Ports has been that no profits are dispensed to shareholders. That has meant that all profits have been re-invested in port improvements to help increase traffic and enhance local economic activity, as indeed has been the case with Aberdeen Harbour Trust until now.

But the absence of shareholders can have an adverse effect when projects that require external financing are considered. Because there is no financial risk to any individual Board Member or employee, the Board is in a position to back projects knowing that it is risk-free from their own personal perspective. That same phenomenon was responsible for the reckless trading by bankers prior to the 2008 crash.

If this project fails badly, either because of delays, escalating costs, unpredicted market conditions, or a combination of all three, the individuals who currently comprise the Board and the Executive will quietly retire (Chief Executive Colin Parker has already announced his imminent retirement), leaving a badly crippled Trust Port to recover from a gamble which didn’t pay off.

The residents of Torry who opposed the harbour development in the Bay of Nigg did so because of the loss of the Bay as an amenity, and the resulting general degradation of the local environment through increased traffic and pollution.

Whether the harbour would ultimately prove a commercial success or not has not been a major consideration. But now that it appears about to become a reality, I’m sure the concensus will be that if the Bay is to be lost it should at least be for very tangible benefits for Aberdeen and the wider community.

It would be a cruel blow indeed if the Bay was sacrificed for a speculative project which ultimately proves under-utilised and a financial millstone to the Harbour Board, and the Bay of Nigg is destroyed for no useful gain.

Notes:

  1. To cite just three examples, Dragados USA is 3 years behind schedule and $223 million over budget in a tunnel-boring project in Seattle; the company was removed from the Florida Department of Transportation’s list of qualified contractors because of project delays and other problems, it being stated that on some projects they “have a variety of materials and workmanship issues that will have to be addressed before FDOT will accept the work.”; and Los Angeles Metro Agency refused to give a major contract to Dragados, despite being the cheapest bidder, because they considered they had a high probability of exposing the agency to cost overruns and project delays,

Sources:

Dársena Case’ by Marta Sánchez Esparza / Malaga, El Mundo,  23/10/2013
http://www.elmundo.es/elmundo/2013/10/13/andalucia_malaga/1381659778.html

Article, by Agustin Rivera, El Confidencial, 5/10/2013
http://www.elconfidencial.com/espana/andalucia/2013-10-05/el-presidente-de-sando-imputado-por-el-agujero-del-puerto-de-malaga_37380/

Article by S. Sánchez, Málaga, Málaga Hoy , 16/10/2013
http://www.malagahoy.es/malaga/presidente-Sando-descarga-tecnicos-puerto_0_743925794.html

‘Sacramento sewer contractor faced delays, minority hiring violations’ The Sacramento Bee, June 4, 2016
http://www.sacbee.com/news/investigations/the-public-eye/article81843937.html

‘Beleaguered Seattle tunnel project facing $223M cost overrun, 3-year delay’, Construction Dive, July 25, 2016
http://www.constructiondive.com/news/beleaguered-seattle-tunnel-project-facing-223m-cost-overrun-3-year-delay/423164/

‘The prosecution asks for 26 years of imprisonment for five people responsible for port works’, Ignacio San Martin, La Cadena SER, 16 November 2016 http://cadenaser.com/emisora/2016/11/18/ser_malaga/1479473619_856001.html

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Apr 132017
 

With thanks to Leanne Carter, Account Manager, Tricker PR.

Bob Bain, partner at Hall Morrice LLP, welcomes Tom Faichnie and Melanie Gilmour to head up the new Hall Morrice Corporate Finance team.

Aberdeen chartered accountants Hall Morrice LLP has launched a new corporate finance division as part of its strategy to prepare for the north east’s economic recovery.

The independent firm has made two key appointments to lead the new team, which will largely focus on working with corporate entities and private equity houses seeking to invest in oilfield services companies.

Tom Faichnie has been appointed to the post of managing director with Hall Morrice Corporate Finance, while Melanie Gilmour takes up the post of manager.

Both have come from RSM Aberdeen, where they specialised on deals activity within the energy sector.

Mr Faichnie has a strong track record in corporate finance, having previously worked for international accountancy firms and leading banks. He has been based in Aberdeen for almost 20 years, and believes that Hall Morrice has launched its new division at exactly the right time as the region readies itself for recovery.

He says,

“We have been seeing the green shoots of recovery for the region since the middle of last year and this is absolutely the right time to get ahead of the game and invest in Aberdeen.

“The decline in trading results seen during the period of low oil price appears to have stabilised and we can see that order books are now tipping back in the right direction. As companies start to build up again, they will need working capital to deliver and grow their order books and many will require funding.

“We also anticipate that we will see a lot of exits coming in the next six months, especially from companies at the smaller end of the scale. There now appears to be a steady base level of profitability upon which to structure a transaction and many shareholders who may have delayed selling their businesses are likely to see increased interest from the UK and overseas.

“Hall Morrice has been operating in Aberdeen for over 40 years: they understand the city and they understand corporate finance, and that, combined with our knowledge and experience, creates an excellent platform that will allow Melanie and I to build a very strong proposition.”

In addition to the external engagements, the new division will also undertake corporate finance and financial due diligence services for existing Hall Morrice clients. The firm, which employs a team of over 50 people in its offices in Aberdeen and Fraserburgh, works across a number of different sectors from property and construction to retail and leisure.

Miss Gilmour is a qualified chartered accountant having previously worked for one of the big four, and has extensive transactional experience across different industries in addition to her oil and gas background.

Hall Morrice Partner Bob Bain says the new team arrives with an exceptional track record in deal initiation and advisory services which will benefit the firm’s existing clients and new prospects.

He adds,

“The marketplace has been volatile for the past two years, but despite that we are confident that there is a now a requirement – and more so in the future – to service corporate entities and private equity houses from a diligence capacity.

“Although we remain cautious, we are optimistic of an increase in deals activity and believe that we have an excellent team in place to respond to that uplift. Tom has worked in Aberdeen for almost 20 years and during that time has established a first-class reputation as being the ‘go to’ for oil and gas corporate finance and diligence.

“Working alongside Tom, Melanie has been able to benefit from his wealth of experience and has emerged as an incredibly knowledgeable individual who will be a valuable asset to the corporate finance team.  With support from the wider Hall Morrice team, we believe that this provides a strong platform to develop our transactional offering in both Aberdeen and the wider oilfield services market.”

Founded in 1976, Hall Morrice is one of Scotland’s leading independent firms of chartered accountants and has offices in Aberdeen and Fraserburgh. Based at 6 and 7 Queens Terrace in Aberdeen, Hall Morrice can be contacted on 01224 647394 or at accounts@hallmorrice.co.uk

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