AN energy firm will abandon troubled North-East factories after spiralling costs crippled construction.

Air Products is dropping its energy-from-waste business, which includes part-built plants at Billingham, near Stockton, in a £770m business write-off.

Officials say the factories, which have been hit by technical issues, would have delivered 100 jobs and generated energy for about 100,000 North-East homes by burning domestic and commercial waste destined for landfill.

However, they have now admitted the developments, on Tees Valley enterprise zone land, near the North Tees Chemical Complex, will be halted.

The Northern Echo understands Air Products is looking for a buyer for the plants, though the company has yet to confirm its intentions.

The decision, announced as the Tees Valley Combined Authority (TVCA) held its first meeting, represents another blow for the area’s employment landscape, which has been hit by Redcar steelmaker SSI UK’s liquidation, job losses as miner ICL UK, in east Cleveland, and uncertainty at Tata Steel.

Only weeks ago, the US firm issued a strong rebuttal over claims it was mothballing its Tees Valley One factory (TV1).

However, it has now confirmed work will be suspended, just as it was last year on the sister Tees Valley Two (TV2) development, when about 700 workers were laid-off with severance pay.

TV1 was planned to open later this year and it is believed bosses met with union leaders just two weeks ago to dispel fears over a similar postponement.

TV1 has been latterly providing work for more than 140 people, including 20 contractors, and it is not yet known what will happen to those jobs.

Last night, Alex Cunningham, Stockton North MP rounded on Air Products, saying the business’ plans were “shrouded in secrecy”, adding both it and the Government, which previously agreed to buy power from its second plant, have questions to answer.

Mr Cunningham, whose constituency houses Air Products’ developments, told The Northern Echo the pull-out was another demoralising hit for Teesside.

He said: “This is an absolutely devastating blow and just heaps more misery on what we’ve seen in recent times.

“First and foremost, construction jobs have been suspended, but in the long-term, there was a promise of 100 highly-skilled jobs.

“But the whole thing is now shrouded in secrecy about what the future holds for them and Air Products’ intentions.

“The problem seems to be that they have come up with this innovative way of getting energy from waste, but have not been able to get it right.

“They have not got the answers to their problems (but) the company has got questions to answer.”

Mr Cunningham added he will raise the issue in Parliament, revealing he wants a response on why it agreed an energy deal with a company using unproven technology.

Councillor Sue Jeffrey, chairwoman of TVCA, said it would speak to Air Products urgently to get assurances about the factories’ futures, a quest reiterated by Councillor Bob Cook, Stockton Borough Council leader.

Coun Jeffrey said: “This is a blow for the area and its ambitions to be at the forefront of green energy.

“However, the establishment of the combined authority means we are better placed to tackle this sort of issue and we will contact Air Products to ascertain the full picture and whether there is the possibility of the sites being taken over by other companies.”

Coun Cook added: “If there is potential for someone to step in and maximise the potential of the project, we will work alongside our partners to support that process.”

But Steve Cason, regional construction officer for the Unite union, was less charitable, saying it had been left in the dark.

He said: “I’m absolutely appalled; we have heard nothing.

“Two weeks ago they told us it wasn’t shutting down.

“It’s very disappointing; we’ve worked hand-in-hand with them and bent over backwards.”

In a statement, Air Products cited test results as the catalyst for its decision, saying its withdrawal from energy-from-waste will allow it to focus more on industrial gases.

Seifi Ghasemi, chairman, president and chief executive, said: “Testing and analysis indicated additional design and operational challenges would require significant time and cost to rectify.

“The board has decided it is no longer in the best interests of the company to continue the Tees Valley projects.

“We pushed very hard to make this new energy-from waste technology work and I would like to thank the team who worked so diligently.

“We appreciate the hard work of our employees and contractors at the site, and certainly understand their disappointment in this decision.

“We are also disappointed with the outcome.”

The Northern Echo contacted Stockton South and Northern Powerhouse Minister, James Wharton, for his reaction, but did not receive a response.