Tom Greatrex – 2014 Parliamentary Question to the Department for Business, Innovation and Skills

The below Parliamentary question was asked by Tom Greatrex on 2014-06-09.

To ask the Secretary of State for Business, Innovation and Skills, what assessment he has made of the report, Merits of UK Coal State Aid Application submitted to his Department on 9 May 2014 by Orion Innovations.

Michael Fallon

I asked officials to review the report and discuss it with the author. This included a discussion on the background to the report and an explanation from Orion of the methodology and conclusions made in the report. Furthermore, they questioned the detail of the analysis, the robustness of the assumptions and areas for further development. Their conclusions are that the report is a high level analysis of the key issues and that it would require significant further work, diligence and validation of assumptions and contingency. It also requires enhancements to methodology, for example, to model the phasing of cash flows and include time value of money considerations and appropriate returns to capital. Orion has noted that the work was completed on a short timeframe and that they would be open to carrying out further work if a mandate could be agreed. On this basis, it is not possible to draw conclusions sufficient to inform any investment decision.