16 January 2009
By Graham Clews
Delays in developing new Private Finance Initiative waste treatment facilities could result in hundreds of millions of pounds worth of European Union fines, the National Audit Office has said.
In its report on local authorities’ use of the PFI to develop waste management sites, published this week, the NAO warns that the EU’s 2013 target for landfill reduction in England remains ‘challenging’.
This could leave the Department for Environment, Food and Rural Affairs facing a big bill unless new waste management projects, both PFI and publicly funded, can be brought into operation in time.
The NAO criticised Defra for a ‘slow start’ in responding to the 1999 EU directive that demanded a 50% reduction on 1995 levels in the use of landfill in England by 2013.
Since then, only two new PFI-funded waste treatment sites have been completed, although local authorities have finished building a number of other sites outside the PFI programme.
The NAO said the development of PFI-funded sites took nine years to be completed and had been delayed by 19 months on average. This was due to difficulties in obtaining central government funding, planning permission and, more recently, the necessary private finance.
Defra has now, under its Waste Infrastructure Delivery Programme, improved its oversight of PFI projects and the support it provides for local authorities, the NAO report concludes.
A Defra spokeswoman said the NAO report acknowledged that the PFI programme was ‘progressing well’.
‘Even though meeting the 2013 target has always been a challenge, government and local authorities are working hard together to meet it,’ she added.
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