Negotiations regarding Lancashire's waste PFI contract are proceeding well, according to officers within the Lancashire Waste Partnership.

Since Australian company Global Renewables was appointed preferred bidder for the contract in September, its parent company – the mining company GRD – has extended its 50% stake in the company to 100% ownership.

We are currently engaged in detailed negotiations and are hoping to have financial closure in the next couple of months.
- Dick Ellis, Lancashire Waste Partnership Global Renewables is hoping to bring in its mechanical biological treatment technology to divert Lancashire's waste from landfill without using mass burn incineration.

The Lancashire Waste Partnership has told letsrecycle.com that talks with Global Renewables are going to plan, and that the contract looks likely to be signed towards the end of June, 2006.

Dick Ellis, technical adviser for Lancashire's waste PFI team, said: "The contractor is totally committed – as is the partnership – in delivering this project. We are currently engaged in detailed negotiations and are hoping to have financial closure in the next couple of months."

Costs
Mr Ellis revealed that negotiations with Global Renewables, which have been continuing this week, were in part dealing with the costs involved in the PFI contract. Last September, council officers highlighted the "unacceptably high" cost as a key factor that needed ironing out with the project's preferred bidders.

Global Renewables is expecting the PFI contract to bring in around £2.8 billion in revenue over its 25 years.

A limiting factor on treatment costs could be Defra's decision to set fines for exceeding landfill permits at £150 per tonne. However, Mr Ellis said in his opinion, it would be better to pay £150 per tonne for a treatment plant to divert waste away from landfill rather than paying the Defra fine and continuing to "put it in a hole in the ground".

Sites
Although the final shape of the contract is dependent on the ongoing negotiations, Lancashire's outline business case involved a network of 11 sites. These included four waste technology parks at Leyland, Thornton, Huncoat and Middleton, which could be developed to house MBT plants.

Mr Ellis said the Lancashire Waste Partnership had already secured most of the sites required for the PFI contract, although one site was yet to be secured.

Global Renewables' mechanical biological treatment system, already established at the company's Australian operations near Sydney, involves mechanical separation processes as well as both anaerobic digestion and in-vessel composting.

With materials like metals and plastics removed by conventional recycling machinery, remaining waste from black bags would be washed, with the liquid and fine materials being treated by the digester to produce a biogas. Other material would be treated in an enclosed composting facility.

Diversion
Council officers believe the process will divert as minimum of 54% of residual waste from landfill, and 82% of its biodegradable content. Biogas from the anaerobic digestion component would generate energy equivalent to that used by 11,000 homes, but this energy would most likely power the plants themselves.

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Lancashire's waste strategy

Concerning the residues from the MBT process, Mr Ellis said: "Within the financial model for this, stabilised waste would go to landfill, having had its biodegradability reduced.

"But we consider this material to be suitable for restoring brown-field sites. Some people call it 'grey compost', and legislation is very prescriptive over it at the moment, but we consider it good organic growth material," he added.