Row over apparent collapse of Scots-China investment pact

The agreement was signed at the first minister's Bute House residence in Edinburgh in March

A row has broken out over an investment pact between Scotland and China after the Scottish government blamed the opposition for its reported collapse.

The first minister signed a memorandum of understanding (MOU) with SinoFortone and another Chinese firm in March.

After reports that the agreement has now been cancelled, the Scottish government highlighted a "climate of hostility" from opposition parties.

Opponents of the deal called for a full statement on the "sorry episode".

The agreement, said to be worth up to £10bn, was signed with representatives of SinoFortone Group and China Railway No. 3 Engineering Group (CR3) at Nicola Sturgeon's official Bute House residence in Edinburgh.

However opposition parties voiced fears about the deal, amid concerns CR3's parent company China Railway Group had been named in an Amnesty International report on human rights abuses and had been blacklisted by Norway's oil fund.

Ms Sturgeon said no specific deals would be done with the Chinese consortium if legitimate concerns were uncovered, with all actual investments to be scrutinised by the Scottish Parliament.

'Climate of hostility'

The Sunday Times newspaper reported the deal had collapsed in August and claimed it had become known in China as the "Scottish shambles".

A spokesman for Economy Secretary Keith Brown said the government was aware of some concerns but had not thought the deal was off.

He also said opposition parties should be "ashamed" for putting potential investments at risk.

The spokesman said: "We did not consider that the MOU had been cancelled but were aware that SinoFortone felt they could not move ahead at that time in the climate of hostility they faced from other parties.

"However, they continued to believe in the benefits for Scotland of an infrastructure partnership with China and we remained committed to pursuing these opportunities.

"The MOU is about building relationships with a view to investment and we remain committed to it. We are sorry if the partners consider the MOU to be cancelled and we remain open to working together on projects in the future."

Opposition politicians including Willie Rennie, Jackie Baillie and Dean Lockhart criticised the handling of the matter

Opposition parties maintained their stance, with Labour's Jackie Baillie demanding the government "come clean" about the fate of the agreement "as a matter of urgency".

She said: "Scotland deserves answers on this backroom deal - the whole affair poses serious questions about the transparency and competence of SNP ministers. The SNP government's handling of this has been cackhanded from the very beginning, so it is no wonder it has been branded a shambles.

"The SNP tried to hush up this deal throughout the election, and now we find out that it fell apart months ago, and yet the Scottish people - once again - were none the wiser."

Scottish Conservative economy spokesman Dean Lockhart added: "This whole episode has shown the SNP just can't be trusted with economic matters. It thought it had struck gold, tried and failed to keep it a secret, and now doesn't seem to know what's going on.

"We now need a calm assessment of all this to see if a potentially lucrative deal with China can be reached. These things can't be allowed to fall through because of SNP bungling."

'Clouded in secrecy'

Scottish Liberal Democrat leader Willie Rennie, who lodged 28 parliamentary questions about the MOU on the first day of the new Holyrood term, also called for an "urgent statement" from Mr Brown about the affair.

He said: "They must explain what recent discussions they have had with these Chinese companies, what lessons they have learned from this sorry episode and what new arrangements will be put in place to attract ethical investment for Scotland.

"The SNP has a chance to inject some much needed transparency for something that has been clouded in secrecy. Throughout this whole process groups such as Amnesty International and Transparency International expressed concerns but the SNP covered their ears and ploughed on regardless. The showed a casual disregard for human rights."

The Scottish government spokesman said opposition parties should be "ashamed", accusing them of "doing Scotland down".

He said: "The opposition should be ashamed of themselves if their actions, in search of cheap headlines, have put up to £10bn of investment at risk.

"The Scottish government will do everything we can to make sure that Scotland is open for business. It would be helpful if opposition parties joined us in making the case for Scotland, rather than doing Scotland down."