PEMBROKESHIRE politicians have slammed a council leadership bid in the wake of revelations that the previous administration lost £1.8m by exchanging a £1.9m loan in the Bluestone holiday village for shares.

At the full council meeting of Pembrokeshire County Council on May 11, members heard the secured £1.9m loan investment in Bluestone was exchanged for shares which – at best – have been valued at £70,000.

Cabinet member for finance, Alec Cormack told members at the May 11 meeting that the very best annual dividend received on the shares was £5,250, meaning it would take 340 years to recoup the apparently written-off loans.

The behind-closed-doors decision, made by the previous council administration’s Cabinet in 2009, also included the removal of a previous agreement securing public access to the Blue Lagoon water park, then known as Waterworld.

The issue was raised at the May meeting by Councillor Alan Dennison, a new member of the council’s Independent Political Group (IPG), which also happened to be the previous administration.

In a submitted question, he asked full council: “Given the council’s previous investment in Bluestone of a 1.9 million secured loan, now converted into shares, can the Cabinet Member advise what return on investment per annum has been received over the last five years in share dividends or any other form of income?”

Members heard that amounted to just £19,000 in five years.

The £110m Bluestone eco-resort, near Narberth, opened in August 2008.

Early on, the county council invested two loans, adding to a total approaching £1.9m, the lion’s share in respect of Waterworld – now called the Blue Lagoon – with the key justification being there would be year-round public access for the public.

In 2009, it was reported that the county council took up an equity share option in the company behind the Bluestone holiday village, exchanging its loans for them.

Cllr Cormack answered Cllr Dennison’s question at the May 11 meeting, saying the original £1.9m investment was secured with a legal charge on land at the land registry, but was later exchanged for shares with no guarantee and the loss of the public’s right to access the-then Waterworld.

It was in 2009 that the confidential behind-closed-doors decisions were made, removing the loans and the guarantees, members heard.

“The council’s lost £1.8m of the £1.9m – roughly 95 per cent – of the IPPG investment and the public’s lost the guaranteed right to use the Bluestone pool,” said Cllr Cormack.

“At this rate, if we took that maximum dividend amount of £5,250, the council would get its money back in roughly 340 years.”

Speaking after the meeting, a spokesperson for the Pembrokeshire Labour Group praised Cllr Cormack’s role in bringing the information to the public domain.

“Cllr Cormack’s revelations about what had been agreed by the IPG administration are astonishing. There is simply no justification, whatsoever, for the decision by the Independent Political Group (IPG) cabinet leader of the time [Cllr Jamie Adams] to convert the loan into shares.

“Not only do they contain no justification for the decision; it’s clear the IPG swopped a secure loan for shares without any consideration of the consequences. They traded the people of Pembrokeshire’s access to the blue lagoon and £1.8m of taxpayers’ money for shares worth less than £70,000.

“Not only were they worth just £70,000, they’re also non-voting shares meaning this shoddy deal failed to secure this authority any influence over the company – it absolutely beggars belief.”

Referring to a forthcoming vote of no confidence in Council Leader David Simpson, in favour of IPG group member Huw Murphy, the spokesperson added: “This is the same Independent Political Group who are now desperate to run the council again and they’ll need the backing of the Tories to do it. The question must be, what secret deal have they cut to short-change the people of Pembrokeshire again?”

Councillor Jamie Adams, leader of the IPG group, has been contacted to comment.