Portavadie, the oil village built with government money and never

used, now faces the prospect of being demolished with the Government

again the loser.

IT IS perhaps the ultimate irony that the Scottish Office is being

asked to pay to demolish the oil village in Argyll which was built using

government money and which was never used for any purpose.

A hangover from the oil boom of the seventies, the Portavadie saga is

one of bad luck and bad timing, incredible bureaucratic incompetence,

and ends up in the tentacles of the BCCI banking scandal.

The village of Pollphail was the by-product of an attempt by the then

Labour Government to rationalise the pressure from the oil and

construction industries to build a plethora of oil yards on the west

coast.

In 1973, by order of the Department of Energy, 110 acres of Portavadie

on Loch Fyne were developed to provide an oil platform construction yard

which had been designed by Sea Platform Constructors, a British-Dutch

consortium part-owned by the Trafalgar House conglomorate, who were to

be its tenants.

At the time construction companies, which could make a fortune from

just one order for a concrete oil platform, were prowling the west coast

looking for deep-water sites without taking too much account of what the

consequences could be.

The developers were seen off at the celebrated Drumbuie inquiry in

Wester Ross only to reappear at Kishorn, just a few miles further up the

coast. Portavadie sought to contain development to one or two locations

but the reality was that there were too few concrete orders for too many

sites and Portavadie -- with its dry dock, construction site, and

massive #3.5m accommodation village for more than 500 workers -- was

obsolete before it was complete.

Consigned to being a white elephant, the #11m oil yard, its dry dock

flooded, was sold in 1984 to Linn Investments, an offshoot of the

Glasgow hi-fi company Linn Products, for just #50,000 but only after the

Government had spent another #1m on infilling and landscaping. What was

described at the time as the most expensive hole in Europe was

subsequently sold again and now lives out its life as a fish-farming

site.

The village of Pollphail built to house the workers at the yard was

another matter entirely. The accommodation blocks funded by the

Government to the tune of #3m became the property of the construction

firm Sea Platform Constructors after an enormous blunder by the

Department of Energy.

The department built the village on land it had neither owned nor

leased in spite of provisions in Scottish law that property belongs to

the owner of the land on which it is built.

The land had been sold to SPC who effectively received the buildings

gratis and then sold them in 1980 for #175,000 to Bertshire Enterprises,

an offshore company registered in Curacao in the Caribbean islands.

Within days Pollphail had earned its owners a #225,000 profit. For

#400,000 it was sold to Berjac NV, a company registered in the Dutch

Antilles, to gasps of astonishment from the Scottish political

establishment.

Apart from the fact that it was administered from the Channel Islands,

details of who was behind Barjac NV were never fleshed out, and Argyll

and Bute District Council spent months trying to contact the owners when

planning permission for the deserted village lapsed in 1986 and

demolition of the vandalised site was ordered. Despite appealing against

the enforcement notice through their solicitors the owners failed to

appear at the subsequent planning inquiry to defend their property.

''The lack of attention to the village since 1981 suggests it has been

effectively abandoned by its owners,'' the council's planning director

told the inquiry.

Apart from wandering sheep nothing much happened at Pollphail until

developer Alan Bradley stepped into the frame backed by Mr Danny

Blundell, a cockney millionaire, who acquired the village for #780,000

in 1987. A promise of a holiday leisure complex of swimming pools,

saunas, snooker, cinema, and conference facilities within a year failed

to materialise.

Blundell's company, Towerdean Properties, gave every impression of

being a highly profitable operation and part of their deal for acquiring

the 25-acre village was that the enforcement order for demolition,

served in 1986, was lifted.

A fresh application for a hotel and leisure complex was approved by

the council but it was a lack of funds which appears to have prevented

any further development apart from making the buildings wind and water

tight.

Towerdean later collapsed owing several millions to BCCI, and Alan

Bradley found himself in an even more complicated position when the bank

itself was closed down. Alan Bradley still disputes that the receivers

of BCCI control the Pollphail site but the complexities of unravelling

ownership are swamping him.

Argyll and Bute District Council, its patience worn thin after years

of living with an eyesore and broken promises, took action yesterday to

demolish the village in September unless action is taken by the

developers, an unlikely scenario, and they are to approach the

Government for funding.

Scottish Office officials may be ruefully contemplating that the

unfettered free market alternative to a government development at

Portavadie in the 1970s might now be half a dozen abandoned concrete

sites on the west coast with environmental and financial consequences to

match. As it is, the bill for exorcising the ghost of the oil boom from

Loch Fyne is likely to be several hundred thousand pounds.