Taxpayers face £1bn bill if SSI Redcar collapses, warn unions

David Cameron last week promised his government would do “everything that we can” to keep steelmaking on Teesside, but so far his ministers have declined requests from plant owner SSI for bail-out cash.

Union leaders and Redcar MP Anna Turley held a press conference yesterday to warn that the works could be days away from closure as it is running out of fuel to power the coke ovens. They also voiced concerns that if the plant is wound down and cash isn’t available to mothball it “in a professional manner” assets including the Redcar Coke Ovens and blast furnace will be damaged beyond repair. That would stymie efforts to find new owners if SSI decides to pull out.

The longer term prospects for the site are even more grim. Unions warned if SSI walked away then taxpayers could end up footing the bill to clear the site for industrial or housing development, which could cost up to £1 billion.

Roy Rickhuss, general secretary Community union

Speaking at the headquarters of steel union Community in Middlesbrough, Roy Rickhuss, General Secretary, said: "What SSI needs is some short-term and immediate assistance from government. The most important thing to do is to ensure that these industrial assets are protected and preserved until steel making can resume. If that means the government has to step in and assist then so be it.

"The costs of inaction could be far greater for the government. Should SSI fail then it's taxpayers who could pick up the costs of redundancies and cleaning up the site. Clean up costs could run to hundreds of millions of pounds. It's in the interests of all parties to find a solution to the current difficulties."

The prospect of Bangkok-based SSI holding on to the Redcar plant faded yesterday after reports from Thailand said the steel firm had failed to restructure debts payments. SSI wanted until December 30 to repay £500m in bank loans but The Bangkok Post said the lenders would ignore those pleas and insist on payments being made by Wednesday next week.

That would heap further pressure on SSI president Win Viriyaprapaikit who last week halted production at Redcar to stem losses.

He is understood to be willing to listen to offers for the Redcar plant, or for parts of the site he bought from Tata Steel and returned to production in 2012.

Redcar MP Anna Turley, Mr Rickhuss, and Tom Blenkinsop MP have written a joint letter to the SSI chief who has remained tight-lipped since Friday’s shutdown.

Ms Turley said: “The steel industry on Teesside is in crisis and it is time for SSI to be open and honest and set out their intentions for the plant. The prolonged silence is causing uncertainty and distress for the workforce, their families, and local businesses and supply chains. The lads, who have given it their all to turn the plant around over the past five years and to keep it going over recent weeks, will need paying at the end of the week and deserve to have their faith reciprocated. The suppliers and businesses who depend on the site need honesty too.

STEEL BLOW: A worker at the SSI Redcar Ironworks on the day steelmaking was suspend on Teesside. Picture: TOM BANKS

“While the blast furnace remains lit we can remain hopeful that steelmaking is staying but without a commitment from SSI it means nothing. We have been told there will be a restructure of the business but they have not made clear whether the UK arm will receive the investment it needs. Their silence and brinkmanship is playing fast and loose with jobs, businesses and livelihoods on Teesside. The industry is the heart of our community and is too important for us to lose.

“We also need the government to step up and recognise the urgency of the situation and accept that the industry is too important to go under. They need to be working with SSI to secure the site, secure jobs, secure industry, and make sure we have a future for steelmaking on Teesside.”