Summary: This blog considers the lessons for the wider major infrastructure industry from three development consent orders granted in July 2016, the dawn of the Brexit age.
Certainty in uncertain times
Between the Brexit result on 23 June and Theresa May becoming Prime Minister on 11 July, to say we were entering a new political era is a gross understatement. Many promoters of schemes requiring development consent orders under the Planning Act 2008 wondered what the effect would be on decision-making. This fast-track consenting process for nationally significant infrastructure, the so-called “DCO regime”, had been specifically designed to promote certainty and confidence, revitalising UK infrastructure and placing it at the forefront of George Osborne’s national economic strategy. And yet certainty and confidence were in short supply just after the referendum to leave the European Union.
Keeping calm and carrying on
Even so, in the spirit of the motivational war poster produced by the British government in 1939, DfT and the new Department for Business, Energy and Industrial Strategy (DBEIS), have kept calm and carried on with three DCOs issued within a fortnight of Theresa May’s premiership:
- Meaford Energy’s Combined-Cycle Gas Turbine, a joint venture between Glenfinnan and St. Modwens, aimed at catalysing regeneration at Meaford Business Park, Staffordshire.
- Sirius Minerals’ York Potash harbour facility on the River Tees, with an associated conveyor system to transport polyhalite from a materials handling facility. This is part of the wider York Potash Project which already has a consented mine and underground conveyor to the handling facility.
- A 132kv overhead line connecting a number of proposed North Wales wind farms promoted by the distribution network operator.
What lessons of wider application are there for promoters for DCO applications going forwards?
Meaford Energy’s Combined-Cycle Gas Turbine
Much of the certainty of outcome for DCO schemes resides in the Government’s national policy statements (NPSs). There is a statutory presumption in favour of projects consistent with the NPSs, with the Planning Act requiring that a scheme compliant with the relevant NPS should be granted consent, unless its adverse impacts would outweigh its benefits. In its first DCO decision, DBEIS concluded that nothing overcame that presumption for Meaford.
Key to this was confirmation from the Environment Agency that the facility’s emissions were capable of being regulated under the separate pollution control regime, and the Agency was not aware of anything which would preclude an environmental permit being issued. Promoters are always well-advised to allocate responsibility internally as early as possible for obtaining these “letters of non-impediment” for all post-DCO statutory consents. Particularly where this relates to controversial matters such as safety or amenity, this allows Examiners and the Secretary of State to “hive off” questions appropriately and lawfully dealt with outside of the planning process. Of course, different Government agencies take different approaches to whether and how speedily they actually provide such letters. Using highly-regarded professional consultants with a track-record of co-operating with the relevant agency can help.
When yours is not the only apparatus en route
Meaford also illustrates the difficulties for promoters in trying to settle arrangements with statutory undertakers, i.e. where existing apparatus crosses a proposed project, in time for the end of the DCO examination. The Secretary of State cannot alone allow the promoter to compulsorily acquire operational land or rights in it if the undertaker has not withdrawn its representations by that point. That is unless the Secretary of State forms the view that there will be no serious detriment to the carrying on of the undertaking or the land can be replaced elsewhere.
By the end of its examination, Meaford was still working with at least six undertakers to agree a position which balanced the certainty needed for the project and safeguards for existing apparatus. Following the examination, agreement was reached with three. The Secretary of State noted the lack of progress from Meaford’s documented efforts with the remaining three. Even so, he concluded that there would be no serious detriment, given the package of proposed protections incorporated into the draft DCO for the undertakers.
Promoters are well advised to identify appropriate contacts within statutory undertakers as early as possible during pre-application consultation. Often their in-house legal teams are a useful conduit whilst discussions between engineers continue alongside. Ultimately some statutory undertakers will be more proactive in engaging than others. Nonetheless, understanding the extent of progress and where differences lie is increasingly of interest to examiners early on in the process. The Secretaries of State appear willing to engage in the details of the parties’ respective cases. Even so, some uncertainty remains in that different Government Departments take slightly different approaches to the same arguments of the same statutory undertakers.
York Potash harbour facility
The key consideration for the Secretary of State in determining Sirius’ York Potash harbour facility was a safety issue which was too intertwined with the basic land-use premise of the project to be left to a separate regime post planning.
The owner of a gas pipeline which carries around 8% of the UK’s national gas demand from the North Sea persuaded the Examining Authority that there was an intolerable societal risk of Sirius locating the overhead conveyor system close to it for around two kilometres along a proposed “Southern Route”. The human error in identifying the high pressure gas pipeline when installing conveyor footings was considered an unreasonable risk. So development consent was withheld for that route but granted for the alternative “Northern Route”, which ran alongside the gas pipeline for only half a kilometre.
The project was considered to accord with the relevant national policy and to have particularly valuable employment benefits in the deprived Teesside area. Even so, there is a sense in the decision that even this might well not have been enough for the Secretary of State, given the risk that Sirius’ preferred “Southern Route” could not be constructed safely. So including the “Northern Route” as a fall-back was critical to the success of the application. And the Secretary of State concluded that there was still a compelling case for the compulsory land take even though Sirius’ preferred route had included fewer plots. Clearly taking such an approach involves greater cost and complexity in consultation, environmental assessment, land negotiations and preparation of the DCO itself. However, York Potash shows that this can make all the difference between success and failure where there is concern that the decision-maker will not accept that risks along a particular route can be overcome.
North Wales Wind Farms Connection
This application by a distribution network operator (DNO) in North and Mid Wales for a relatively short overhead electricity connection for four wind farms is yet another example of how schemes need to be prepared to address changes in circumstances even during what can be a fast and furious examination.
Developers of two of the four wind farm abandoned their schemes mid-way through the DNO’s examination. Nonetheless the DNO’s needs case was still considered sufficiently reliable and robust by the Secretary of State. DCO teams reasonably focus on the many complexities of their core scheme itself during preparation. But it is always prudent to stress-test applications early for scenarios arising from slightly off-radar occurrences.
The scheme was also revised mid-examination to accommodate requests for certain pole locations by affected landowners. Tactically this can be risky as PINS needs to accept the change as not rendering the project materially different from the one consulted on and submitted, and examination timescales are tight. But it can be worthwhile where changes are not major, accommodate the wishes of affected persons and do not involve different landownership and the Inspectors, increasingly pro-active, have indicated that they might be open to the idea.
Preparation and pragmatism
In efforts to show that Britain is still open for business, these decisions show that Government Departments are increasingly demonstrating a reasonable degree of pragmatism, as the DCO regime matures in any event. But this is no excuse for complacency. These applications also show that Inspectors and the Secretary of State need to be given the tools to be comfortable with exercising that pragmatism. Here these included hard-won letters of non-impediment from decision-makers in safety and environmental regimes, alternative routes, well-supported cases for unilaterally settling arrangements with statutory undertakers and robust application documents that envisaged foreseeable changes in circumstance. As ever, the DCO regime still favours the well-prepared.