Energy giants BP and Equinor agree to press ahead with plans for £1.5bn development in Teesside Freeport

The companies have signed a lease agreement so they can build a gas-fired power plant and carbon capture facility on a 100-acre plot on the Teesworks site.

But before it was signed, they asked Teesworks directors for legal assurances that none of assets at the site had been acquired through an “unacceptable act”.

It comes after Andy McDonald, Labour MP for Middlesbrough, claimed the developers involved in the project are profiting from “industrial-scale corruption”, when he spoke in the House of Commons last month.

Tees Valley Mayor Ben Houchen, who is running the Teesworks project, confirmed that a “bespoke clause” was inserted into their legal agreement, at the request of the two energy firms.

“As well as the clause, BP and Equinor wanted assurances, given the noise they were hearing,” he told The Yorkshire Post. “We were able to provide those assurances and they signed the deal last week. Now they’re investing north of £1.5bn on this site. If anything, it exonerates us.”

Labour MPs are concerned the taxpayer is spending millions on clearing and decontaminating the Teesworks site, but developers Chris Musgrave and Martin Corney have been handed a 90 per cent stake in a company called Teesworks Limited, which has options to buy valuable parcels of the remediated land for nominal fees and then lease them to investors.

Mr Houchen and the developers strongly deny the corruption allegation.

Thousands of acres of disused industrial land on the bank of the River Tees is being turned into a manufacturing hub as part of the Teesworks project, which promises to create thousands of jobs and generate billions for the local economy.

The site is part of the Teesside Freeport zone, where businesses enjoy tax breaks and lower tariffs. It has already received over £300m of Government funding and loans.

The South Tees Development Corporation (STDC), led by Mr Houchen, is spending millions of pounds of taxpayers’ money on clearing industrial waste from the site and decontaminating it. Estimates suggest it cost at least £120,000 per acre.

He said the current arrangement ensures Teesworks Limited – 90 per cent owned by the developers – pays for each parcel of land it acquires then provides the money to cover the remediation costs in full.

“Not only are they paying us back (for the remediation), they’re paying us interest on that money,” he said. “If, for whatever reason, they chose to not exercise their option or not pay us back, they lose their option over the land.”

The developers are due to earn millions of pounds from the lease agreements and half the money made from the sale of scrap metal from the site.

Mr Houchen said claims about corruption “do impact investors” and they have asked questions about the allegations on “two or three occasions.

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