By Tash Shifrin
18 February 2010
Cornwall Council has admitted it cannot afford to scrap a Private Finance Initiative waste scheme, which centres on a controversial incinerator that has been refused planning permission.
The unitary authority’s Cabinet voted at its February meeting to continue its 30-year, £427m deal with contractor Sita after hearing that terminating the contract at a cost of £200m was ‘not affordable’. The council has asked Sita to submit a revised project plan.
The waste deal, signed in 2006 by the former Cornwall County Council, included construction of a 240,000-tonne, energy-from-waste plant at St Dennis, a village in Cornwall’s historic china clay district near a special conservation area.
But the planned incinerator sparked widespread local opposition and the county council’s planning authority refused planning permission last year. A planning inquiry is set to be opened on the scheme next month, after an appeal by Sita.
Consultancy PricewaterhouseCoopers told the council that if it terminated the PFI scheme on a no-fault basis, this would cost £35m–£50m. Another £166m would be added to the bill in landfill tax costs from the expected delay of nine years before a new scheme could be devised, procured and put into operation.
Council officers have also warned the Cabinet’s waste management advisory panel that the final bill could be nearer £300m.
Minutes of the Cabinet meeting noted: ‘A number of Cabinet members stated that, in other circumstances, it may have been the case that the contract would be terminated, but it was not felt fair to burden the people of Cornwall with the resulting costs over the coming years.’
But Julian German, Cabinet member for waste and environment, told Public Finance: ‘Now is not the time to terminate the Sita contract.
‘[Engineering consultancy] Fichtner has concluded that a single energy-from-waste plant in Mid-Cornwall is the best technical, environmental and financial solution and we will take that on board. We will now await the beginning of the planning inquiry with interest.’
The Cabinet papers also reveal that the costs of the scheme are set to rise because a fixed-price arrangement with the subcontractor expected to build the incinerator has expired. When the deal is redrawn, ‘it can be anticipated that this price will increase significantly’, the papers said. ‘The Revised Project Plan will seek to mitigate any increase as much as possible.’
They also warned that the cost of any alternative technology in the revised plan would ‘vary considerably… and therefore cannot be quantified in a meaningful manner’.
18 February 2010
Cornwall Council has admitted it cannot afford to scrap a Private Finance Initiative waste scheme, which centres on a controversial incinerator that has been refused planning permission.
The unitary authority’s Cabinet voted at its February meeting to continue its 30-year, £427m deal with contractor Sita after hearing that terminating the contract at a cost of £200m was ‘not affordable’. The council has asked Sita to submit a revised project plan.
The waste deal, signed in 2006 by the former Cornwall County Council, included construction of a 240,000-tonne, energy-from-waste plant at St Dennis, a village in Cornwall’s historic china clay district near a special conservation area.
But the planned incinerator sparked widespread local opposition and the county council’s planning authority refused planning permission last year. A planning inquiry is set to be opened on the scheme next month, after an appeal by Sita.
Consultancy PricewaterhouseCoopers told the council that if it terminated the PFI scheme on a no-fault basis, this would cost £35m–£50m. Another £166m would be added to the bill in landfill tax costs from the expected delay of nine years before a new scheme could be devised, procured and put into operation.
Council officers have also warned the Cabinet’s waste management advisory panel that the final bill could be nearer £300m.
Minutes of the Cabinet meeting noted: ‘A number of Cabinet members stated that, in other circumstances, it may have been the case that the contract would be terminated, but it was not felt fair to burden the people of Cornwall with the resulting costs over the coming years.’
But Julian German, Cabinet member for waste and environment, told Public Finance: ‘Now is not the time to terminate the Sita contract.
‘[Engineering consultancy] Fichtner has concluded that a single energy-from-waste plant in Mid-Cornwall is the best technical, environmental and financial solution and we will take that on board. We will now await the beginning of the planning inquiry with interest.’
The Cabinet papers also reveal that the costs of the scheme are set to rise because a fixed-price arrangement with the subcontractor expected to build the incinerator has expired. When the deal is redrawn, ‘it can be anticipated that this price will increase significantly’, the papers said. ‘The Revised Project Plan will seek to mitigate any increase as much as possible.’
They also warned that the cost of any alternative technology in the revised plan would ‘vary considerably… and therefore cannot be quantified in a meaningful manner’.
