Enterprise first choice for £210m Edinburgh deal
21 October 2011
Services company Enterprise has beaten a joint bid from Kier and Shanks to emerge as first choice for a £210 million contract to provide waste and recycling collections for the City of Edinburgh council.
The council will meet next week (October 27) to endorse the decision to choose Enterprise as preferred bidder for the city’s seven-year environmental services contract, which also covers street cleaning and grounds maintenance.
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- The new contract is set to spell an end to the recycling box system currently used by householders in Edinburgh
Under the contract, which would replace the council’s existing in-house service, Enterprise has committed to increase the city’s recycling rate to over 60% by 2018. It also plans to introduce a new single-container commingled recycling service for households, replacing the council’s current source-separated service which uses two boxes.
The change would also involve an investment of £40 million in fleet vehicles, new technology, depot improvements and the new containers needed for the recycling service change, as well as 350 recycling bins being put in public places.
The council claimed the contract would also deliver it net savings of £71.6 million compared to its current service budget over the seven years of the contract, which could be extended for a further five years.
Enterprise’s business case for the contract, which is detailed in a report being considered by councillors at next week’s meeting, claims that if the contract was extended further unspecified savings would be made through a year-on-year reduction in the service fee it charges to the council.
Commenting on the deal, the council’s director of service for communities, Mark Turley, said: “The proposed partnership would provide the council with the opportunity to modernise services and significantly improve the experience of residents within the current financial restraints of the council’s budget.
Mr Turley stressed any decisions on changing the service would still rest with the council and added: “The contract is explicit in what is expected regarding service delivery and should there be any deviation from this penalties and ultimately contract withdrawal could apply.
Procurement
The report reveals that Enterprise was chosen ahead of a joint bid from services company Kier and waste firm Shanks for the contract, following a procurement using the competitive dialogue process which was agreed on in 2009.
It shows how Enterprise’s bid scored higher than Kier/Shanks on two of the areas assessed – service and financial/commercial – but lower than it on ‘transformation’. However, in total, Enterprise’s bid scored 717 out of 1,000, compared to 607 for Kier/Shanks.
The council’s assessment also showed that the savings to be achieved by Enterprise running the service were significantly more than if it continued to be run in-house - £72 million over the seven year contract period compared to £45 million for the alternative.
Enterprise’s operations director, Alasdair Slessor, said: “We’re delighted that officers of the City of Edinburgh Council have recommended to appoint us as their partner for environment services.
“We look forward to welcoming the team into the new organisation and to harnessing their skills, experience and local knowledge as we improve existing services and develop new ones.”
The contract would represent one of Enterprise’s most high-profile waste and recycling successes, although the firm already runs collections in the likes of Manchester, Solihull and Peterborough.
If councillors agree to appoint Enterprise as preferred bidder next week, the council aims to sign the deal in the week commencing November 28 2011, with Enterprise taking over the service at a to-be-confirmed date in early 2012.
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