THE value of a Stormont contract to source wood pellets for heating government buildings has increased more than three-fold, it has emerged.
Co Fermanagh timber firm Balcas was awarded a £7.25 million contract by the Department of Finance in August.
The six-year supply contract, which commenced in October, involves providing wood pellets for biomass boilers in buildings used at dozens of government buildings, including colleges, police stations and hospitals until 2030.
It came five years after a similar contract was awarded to Clearpower Limited, valued at £2m.
The Department of Finance said the value of the replacement supply contract had increased in response to extra demand from government bodies.
“The contract is demand driven and the increase in the estimated value of the contract reflects additional users and allows sufficient scope for any unforeseen demand for the supply of wood pellets during the life of the contract,” said a department spokesperson.
“There is no guaranteed level of spend under the contract.”
The department said the additional bodies which can avail of the new contract include St Mary’s University College Belfast, the Northern Ireland Fire and Rescue Service, the Ambulance Service and the Belfast, Western and Southern health trusts.
A tender notice published by the Department of Finance last year, indicated that other parties involved in the contract include the four regional colleges, the NI Prison Service and the DVA.
The College of Agriculture, Food and Rural Enterprise (CAFRE), Public Records Office NI, Arts Council NI, National Museums NI, Waterways Ireland and the Department of Finance’s properties division, which includes offices used by the NI Civil Service, were also named.
It’s understood there were just two bidders for the new tender.
Balcas was originally awarded a Stormont contract to supply wood pellets to a limited number of government sites in 2010.
The Co Fermanagh timber firm later lost out to Drogheda headquartered Clearpower when the contract came up for renewal in 2014.
Balcas became the major supplier of wood pellets following the introduction of the renewable heat incentive (RHI) scheme by the former Enterprise Minister Arlene Foster in 2012.
Widespread abuse of the scheme erupted in the 2016 ‘cash for ash’ scandal, which later led to the collapse of the Stormont institutions in early 2017.
Invest NI’s ownership of shares in Balcas came under scrutiny in the wake of the scandal.
Former Invest NI boss Alastair Hamilton told the RHI inquiry in 2018 that the shares had been acquired by in 1994 by the Department of Economic Development, a predecessor of the economic support agency.
He the preference shares, which typically involves a fixed dividend.
Balcas, which and dates back to 1962, was subsequently acquired by Glennon Brothers in 2021.
The third-generation timber processing company also owns plants in Longford, Cork and Troon.
The latest accounts for Balcas Timber Limited show it recorded a pre-tax profit of £21.85m in 2023 on a turnover of £137.2m.
