Major surprise as power station winners named

A previously unknown company, Mountside, and its two international partners look set to win one of the largest contracts of the year to build one of two new power stations in the Republic.

Mountside Properties Ltd, associated with Navan-based beef processor Mr Martin Blake, plans to build a 400 megwatt gas station on the old Tynagh Mines site in Co Galway. It has formed a consortium called Tynagh Energy to complete the project.

The Limerick-based company Aughinish Alumina has been selected to build a smaller 150 megawatt station in Limerick.

The two companies have been named by the Commission for Energy Regulation (CER) as "preferred bidders". The two contracts are believed to be worth €1.5 billion, with the lion's share going to Tynagh Energy.

There was huge surprise in the electricity industry yesterday when the CER announced the preferred bidders. "Aughinish have been looking to build a station for years, but Mountside were barely known to anyone in the electricity industry before now," said one source.

The surprise was heightened because Mountside managed to beat off competition from some of the largest power companies in Ireland and Britain, among them Scottish and Southern Energy, AES Electric and Viridian. The State-owned Bord Gaís was also unsuccessful.

The Tynagh consortium is expected to spend at least €250 million on the plant. Pending final negotiations, the consortium is likely to secure a 10-year contract to supply the ESB with power. The two international partners in the consortium with Mountside are Gamma Construction, a specialist in building power stations, and Investec Bank of South Africa.

Mr Blake and his family have operated in the beef processing industry for many years via the company Honeyclover Limited. This firm once benefited from an investment via the controversial passport for investment scheme.

Residents of the east Galway village of Tynagh had little immediate reaction to the announcement yesterday.

The 320-acre Tynagh Mines closed down in the early 1980s, and was effectively "abandoned in a very dangerous state", Sen Ulick Burke, a local politician said. "It dates back to pre-planning days, whereas any new development will now be subject to strict conditions and will be monitored very closely," he said.

Mountside received planning approval for construction of the proposed 400 megawatt gas-fired power plant from Galway County Council, subject to conditions which will include "rehabilitation" of the site, Sen Burke said.

Earlier this year, members of the Irish Farmers' Association (IFA) in east Galway staged a protest outside the Tynagh mine site over concerns about the safety of materials on and emissions from the area.

Mr Patrick Whelan of the Tynagh Mines Environment Action Group said he believed the power station development would be viewed positively.