By Tash Shifrin
9 October 2009
Three local authorities have issued a tender notice for a £1bn waste management scheme, leaving the method of financing, contract structure and technology to be used up for negotiation.
Despite its size, Project Transform – launched by Warwickshire County Council and the unitary authorities for Coventry and Solihull – could bypass the Private Finance Initiative.
The tender documents said finance was expected to come ‘predominantly, if not wholly’ through the PFI. But it added that other sources could include prudential borrowing and loans from the European Investment Bank or the Treasury Infrastructure Financing Unit.
Programme manager Kalen Wood told Public Finance that the decision to be flexible over financing ‘came out of the Manchester experience – that’s why we are leaving it open to look at additional or alternative finance’.
The £4.7bn PFI scheme signed off by Greater Manchester Waste Disposal Authority in April was severely delayed by financing problems arising from the credit crunch. Its senior debt package eventually included prudential borrowing and loans from Tifu and the EIB.
Wood noted that procurement for Project Transform could take two years. ‘We don’t know what the economy will be like then.’
The scheme could be run on a design, build, finance and operate basis. But the three councils have also reserved their right ‘to adopt a contract structure that best meets their respective needs’.
Wood said the outline business case included production of energy from waste, with a combined heat and power facility. But this was also open to change.
As part of the procurement process, the partners will look at the potential for selling on any energy produced to the three councils, the National Grid or other users.
Meanwhile, the GMWDA is to apply for a High Court case brought against it to be thrown out. The proceedings were launched by unsuccessful bidder Sita UK, which is seeking unlimited damages for breach of procurement law.
John Bland, the waste authority’s treasurer and deputy clerk, told PF that defence papers were due to be submitted on October 9. ‘But the court agreed to extend that to allow an application to strike out proceedings to be heard.’
The GMWDA has said it is confident that its contract was awarded to Viridor Laing in accordance with the law. But it is understood that fighting the case could cost the authority a six-figure sum.
9 October 2009
Three local authorities have issued a tender notice for a £1bn waste management scheme, leaving the method of financing, contract structure and technology to be used up for negotiation.
Despite its size, Project Transform – launched by Warwickshire County Council and the unitary authorities for Coventry and Solihull – could bypass the Private Finance Initiative.
The tender documents said finance was expected to come ‘predominantly, if not wholly’ through the PFI. But it added that other sources could include prudential borrowing and loans from the European Investment Bank or the Treasury Infrastructure Financing Unit.
Programme manager Kalen Wood told Public Finance that the decision to be flexible over financing ‘came out of the Manchester experience – that’s why we are leaving it open to look at additional or alternative finance’.
The £4.7bn PFI scheme signed off by Greater Manchester Waste Disposal Authority in April was severely delayed by financing problems arising from the credit crunch. Its senior debt package eventually included prudential borrowing and loans from Tifu and the EIB.
Wood noted that procurement for Project Transform could take two years. ‘We don’t know what the economy will be like then.’
The scheme could be run on a design, build, finance and operate basis. But the three councils have also reserved their right ‘to adopt a contract structure that best meets their respective needs’.
Wood said the outline business case included production of energy from waste, with a combined heat and power facility. But this was also open to change.
As part of the procurement process, the partners will look at the potential for selling on any energy produced to the three councils, the National Grid or other users.
Meanwhile, the GMWDA is to apply for a High Court case brought against it to be thrown out. The proceedings were launched by unsuccessful bidder Sita UK, which is seeking unlimited damages for breach of procurement law.
John Bland, the waste authority’s treasurer and deputy clerk, told PF that defence papers were due to be submitted on October 9. ‘But the court agreed to extend that to allow an application to strike out proceedings to be heard.’
The GMWDA has said it is confident that its contract was awarded to Viridor Laing in accordance with the law. But it is understood that fighting the case could cost the authority a six-figure sum.
