By Tash Shifrin
10 September 2009
Greater Manchester Waste Disposal Authority is facing a High Court challenge to its huge Private Finance Initiative deal.
Sita, an unsuccessful bidder, is seeking unlimited damages for breach of procurement law.
The authority signed a long-delayed 25-year deal with contractor Viridor Laing in April to provide state-of-the-art waste and recycling facilities. The deal, worth £3.8bn to Viridor Laing, was eventually closed when the Treasury stepped in to provide a loan.
Waste management firm Sita is part of a consortium that lost out when Viridor Laing was selected as preferred bidder in January 2007.
Papers filed by Sita on August 27 claim that the Manchester authority failed to assess the tenders to identify the most economically advantageous bid and/or acted in breach of European Union procurement law.
A spokesman for Sita said the eventual cost of the deal was ‘15% more expensive than Sita UK’s bid in 2007 and 25% more expensive than their original submission’.
The authority had agreed ‘significant changes’ to the project after selecting its preferred bidder, he said.
‘In our view, Sita UK should have been invited to submit a revised bid,’ he added.
The final scheme is unusually complex, with two special purpose vehicles. The first, Viridor Laing Greater Manchester, will provide recycling facilities. In turn, it established a joint venture with chemicals firm Ineos ChlorVinyls to build a combined heat and power plant.
The waste authority’s treasurer and deputy clerk, John Bland, told Public Finance that the authority was ‘disappointed and surprised’ about the legal proceedings, but was ‘confident that the contract was awarded in accordance with EU procurement law’.
10 September 2009
Greater Manchester Waste Disposal Authority is facing a High Court challenge to its huge Private Finance Initiative deal.
Sita, an unsuccessful bidder, is seeking unlimited damages for breach of procurement law.
The authority signed a long-delayed 25-year deal with contractor Viridor Laing in April to provide state-of-the-art waste and recycling facilities. The deal, worth £3.8bn to Viridor Laing, was eventually closed when the Treasury stepped in to provide a loan.
Waste management firm Sita is part of a consortium that lost out when Viridor Laing was selected as preferred bidder in January 2007.
Papers filed by Sita on August 27 claim that the Manchester authority failed to assess the tenders to identify the most economically advantageous bid and/or acted in breach of European Union procurement law.
A spokesman for Sita said the eventual cost of the deal was ‘15% more expensive than Sita UK’s bid in 2007 and 25% more expensive than their original submission’.
The authority had agreed ‘significant changes’ to the project after selecting its preferred bidder, he said.
‘In our view, Sita UK should have been invited to submit a revised bid,’ he added.
The final scheme is unusually complex, with two special purpose vehicles. The first, Viridor Laing Greater Manchester, will provide recycling facilities. In turn, it established a joint venture with chemicals firm Ineos ChlorVinyls to build a combined heat and power plant.
The waste authority’s treasurer and deputy clerk, John Bland, told Public Finance that the authority was ‘disappointed and surprised’ about the legal proceedings, but was ‘confident that the contract was awarded in accordance with EU procurement law’.
