A group of five South Welsh councils has formally begun the procurement process for one of Wales' largest ever waste treatment deals, with a projected value of £1.1 billion over 25 years.

The 'Prosiect Gwyrdd' partnership issued a notice on the Official Journal of the European Union (OJEU) last week (November 24), inviting anyone interested in bidding for the public private partnership (PPP) deal to contact them and complete a pre-qualification questionnaire.

The Prosiect Gwyrdd procurement process is being led by Cardiff council

The partnership - which is being led by Cardiff council but also involves Caerphilly county borough council, Monmouthshire county council, Newport city council and Vale of Glamorgan council - is looking to procure facilities to treat the 30% to 35% of its waste that it believes will be left after recycling and composting in the future.

Based on 2008/09 figures for the partnership's municipal waste arisings, this would mean the infrastructure procured under the deal would be needed to treat between 137,989 tonnes and 160,987 tonnes of residual waste a year.

While the partnership has stressed that it is "technology neutral", the Welsh Assembly Government (WAG) has proposed a cap of 30% on the amount of Wales' municipal waste that can be treated using incineration by 2024/25 (see letsrecycle.com story), and strongly backed the use of anaerobic digestion to divert food waste from landfill.

Councillor Mark Stevens, chair of the joint committee for Prosiect Gwyrdd, explained that the facilities were needed to work alongside the five councils' efforts to increase their recycling rates to the 70% target for 2024/25 proposed by the WAG.

He explained: "The European Journal advertisement confirms the commencement of a project that will deliver a sustainable, beneficial solution to the remaining waste and is set to be the biggest collaboration between the public and private sector in Welsh history.

"The partnership will deliver a low carbon impact solution to waste after recycling and composting has been maximised, minimising waste to landfill, obtain maximum value from waste as a resource and provide best value to the taxpayer," he added.

Even before the formal start of the procurement process, Viridor had unveiled plans to develop a £150 million treatment facility at Trident Park in Cardiff, using energy-from-waste with combined heat and power technology, to treat the five councils' residual waste.

However, a planning application for the facility was rejected in July 2009 (see letsrecycle.com story), with Cardiff's planning committee citing concerns over the fact that the facility would be taking waste from outside the city.

Funding

In January 2009 the WAG committed to provide up to £7.8 million a year of the operational costs - in the shape of the gate fee - for facilities developed under Prosiect Gwyrdd (see letsrecycle.com story).

And, in May 2009, this grant, which is based on the estimated cost of providing the facility, was increased to up to £9.124 million a year.

The OJEU notice also reveals that, while the project is expected to be "predominantly, if not wholly" procured with private finance, money could be sought from other sources such as prudential borrowing and the European Investment Bank.

Process

The potential for the infrastructure developed under the contract to accept "third party waste", such as from the commercial and industrial sector, will also be explored during the procurement process.

With between six and eight bidders expected, the next stage of the procurement will see an industry day being held next week (December 7), with potential bidders then given until January 22 to submit a pre-qualification questionnaire.

The partnership aims to name a preferred bidder in autumn 2011, with the aim of finalising the contract in 2012.