SC’s McMaster says $150M for Scout site prep overruns eventually ‘will be there’
South Carolina Gov. Henry McMaster said he believes money to pay for the $150 million in Scout Motors site preparation overruns will eventually be made available for the Commerce Department despite state budget writers not including the cash in spending proposals.
McMaster made the comments after touring the Scout Motors training facility, which is part of the electric vehicle automakers $3 billion investment in the Blythewood area.
In 2023, South Carolina lawmakers approved a $1.3 billion incentive package to bring Scout to the South Carolina. The package included preparing the site of the factory for construction.
The Department of Commerce this year asked budget writers for $150 million to help pay for cost overruns. But neither the state House budget nor the budget proposed by the Senate Finance Committee honors that request.
“Eventually it will be there because it must be there,” McMaster said. “That was part of the deal that we make the site ready. This money’s not going to Scout. It’s going to the site, to make that site ready. So we will do what we said we would do.”
The state Senate on Tuesday is scheduled to begin budget deliberations on the floor. The House will have a second run through the budget after it returns from the Senate. House budget writers acknowledge the need to cover the costs, even if lawmakers are unhappy with the overruns.
“We have to pay our bills,” Ways and Means Chairman Bruce Bannister said.
If the House approves giving the Department of Commerce money for the Scout site overruns, the issue will have to be resolved during the budget conference committee.
The state’s work included building a railway bridge over Interstate 77 to the Blythewood industrial park site, building a new I-77 interchange to serve the eventual factory, additional road improvements, electrical work, and water and sewer infrastructure.
It also included more wetlands mitigation work than originally budgeted by Commerce, after the Department of Natural Resources called to protect and restore more land in connection to the Scout Motors site project.
“There was a lot of work to be done, but the (Commerce) team got together and got it done. We believed that the mitigation package was more than ample. Turned out some others thought it wasn’t. But of course, that gave us a five-month delay. Also (we) had bad weather record. Bad weather, a lot of water. But those are the kind of things that happen in the construction business,” McMaster said.
The Senate Finance committee included three provisions in its proposed spending plan, one of which calls for a review by the Legislative Audit Council and Office of the Inspector General on how the cost overrun happened. The Senate Finance Committee proposed preventing Commerce from entering into open-ended incentive agreements, and requiring the agency to have specified incentive amounts in contracts to serve as an expenditure ceiling for any project.
Despite questions on whether the Department of Commerce will be given the money to pay for its overruns and delays encountered on the project, the work at the factory is progressing.
Scout Motors antipates the first vehicles to roll off the assembly line by the end of the year. However, those will be concept vehicles to start initial testing.
“You have thousands of parts coming from around the country, all coming together, being galvanized here, and assembled and put together to make a vehicle,” Scout President and CEO Scott Keogh said. “From there, the vehicles will get more and more mature.”
Two more phases of vehicles are anticipated in 2027 for testing on durability and how well the batteries perform in the winter months, among other things before cars are ready for purchase in 2028.
When those vehicles are eventually on sale, Scout still plans to sell vehicles directly to consumers rather than through traditional dealerships. However, public pushes to allow direct sales in South Carolina, where vehicles must be sold through dealerships did not take place this year in the General Assembly.
“We think it’s right for the customer. I think it makes things faster, it makes things more transparent, and that’s why we’re doing it,” Keogh said. “And look, I’m also an optimist. I have no doubts we will navigate that in South Carolina as well, but one bridge at a time.”
