Years of wrangling over one of the UK’s biggest industrial regeneration sites ended on Thursday when three Thai banks agreed to sell 840 acres to the South Tees Development Corporation for £1.
The deal paves the way for the reclamation of heavily polluted iron and steelworks beside the River Tees in northern England by the STDC, a publicly funded body chaired by Tees Valley’s elected mayor, Ben Houchen. He has pledged that steelmaking will resume within three years on part of the site.
The land had been owned by Thai company, Sahaviriya Steel Industries, which acquired it from Tata Steel for $469m in 2011.
SSI UK invested a further $600m and resumed iron and steelmaking at the site but struggled to make a profit. It went into liquidation in 2015, costing the area 3,000 jobs and ending its 170-year iron and steelmaking history.
The three Thai banks — Siam Commercial Bank, Tisco and Krung Thai — were owed about $815m by SSI UK when it was liquidated, giving them a hold over the 840 acres.
The STDC, set up to regenerate the area’s economy, has control of a 4,500-acre swath of land beside the River Tees. About half is already in use, but it includes 2,300 acres formerly owned by SSI UK and Tata Steel.
Last year Tata sold its 1420 acres of the site to the STDC for £11.5m. But protracted negotiations over the remaining 840 acres owned by SSI failed to reach an agreement. The STDC then sought a compulsory purchase order, or CPO.
Although a deal has now been reached, the CPO hearing is still in progress, but it will now concern only about 30 remaining acres, which are owned by other entities.
The £1 sale price reflects the huge costs of reclamation and regeneration of the site. In a submission to the CPO hearing, David Allison, STDC chief executive, described the “perilous nature” of buildings there. Experts say that demolition will cost many tens of millions of pounds.
Keeping the land safe has cost £44m to date, which has come from £221m committed by the UK government until 2022 for maintaining and regenerating the site. Westminster has also granted £71m towards developing it as a clean energy, manufacturing and tech company base.
Win Viriyaprapaikit, chief executive of SSI, welcomed the deal, and said he was “grateful for the Thai banks’ support and their good intentions for this regeneration of this region”.
Mr Houchen said: “With the potential to create more than 20,000 jobs over the next two decades, today really marks the beginning of a new era.”
