Cheshire waste project looks set to be abandoned
19 January 2012
The procurement of a long-term contract to treat residual waste from homes in Cheshire looks set to be abandoned, after the withdrawal of £160 million in PFI funding from Defra.
Cheshire West and Chester and Cheshire East councils had been working in partnership to establish a 25-year waste waste deal that would have been worth around £850 million and would have involved 180,000 tonnes of waste per year.
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- An artist's impression of Viridor's proposed MBT facility
However the proposals were thrown into doubt when Defra announced that it would withdraw funding from a total of seven proposed local authority waste treatment schemes in October 2010 (see letsrecycle.com story), which included £130 million set aside for the Cheshire West and Chester and Chester East project.
At a meeting of its executive committee last Wednesday (January 11), Cheshire West and Chester Council announced that it is recommending that the PFI scheme be dropped, which would see the authority write off a total of £1.2 million of expenditure from the procurement process. And, Cheshire East, which has spent a further £1.6 million, is soon expected to follow suit.
Cheshire West and Chester council’s executive member for community and environment, Lynn Riley said: “We believe that the PFI scheme is no longer an affordable option and the loss of strategic funding has left us with no alternative but to discontinue. The problem of disposal remains and with rapidly dwindling landfill resources we must move on quickly and find an alternative solution.”
The plans come as a blow to waste management company Viridor, who had emerged as the front-runner for the contract shortly before the announcement that the PFI support would be withdrawn in 2010, and was confirmed as the preferred bidder in November of the same year (see letsrecycle.com story).
Legal Challenge
Cheshire West and Chester and Cheshire East councils had launched a legal challenge to the government’s decision in January 2011 on the basis that the methodology used by Defra to decide to cut the funding had been “seriously flawed” (see letsrecycle.com story).
But, the Judicial Review failed to overturn Defra’s decision at a two-day High Court hearing in Leeds in June 2011 with Mr Justice Langstaff dismissing the case on all five grounds put forward by the councils (see letsrecycle.com story).
Proposals
The proposals set out by Viridor included the building of a mechanical biological treatment facility at Lostock Gralam, in Northwich for which planning permission had been granted.
A source at Cheshire West and Chester council confirmed that the council is currently exploring alternative solutions.“At this stage there is still a formal process to go through, we are still looking at what the future will be.”
Cheshire East council leader Wesley Fitzgerald said: “Following the Judicial Review, Cheshire East council will make the decision to discontinue the PFI scheme in April 2012. It is possible that this council may have to write off £1.6 million of expenditure as part of the project.
“We are however, still in the position of having to find a sustainable method of disposing of Cheshire’s household waste over the next 25 years. We are keen to discuss this situation further with the government and to find a solution that meets the needs of Cheshire East.
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