Enterprise top choice for £300m Ealing waste deal
19 July 2011
Services company Enterprise has emerged as the frontrunner to run the London borough of Ealing’s household waste and recycling collections under a long-term contract that could be worth up to £300 million over the next 15 years.
If Enterprise is approved as preferred bidder for the contract by the West London council’s cabinet next week (July 26), it would pave the way for it to begin running the collection service in April 2012, taking over from current collection contractor May Gurney.
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- Enterprise is not expected to make any immediate changes to Ealing's household waste and recycling collections if it takes over the service
May Gurney took control of the collections contract in June 2008 as part of its acquisition of the UK’s largest community recycling group ECT. When the deal was originally awarded to ECT in 2004 it proved controversial, with some waste companies questioning aspects of the award (see letsrecycle.com story).
That contract, which began in 2005, could have run for up to 21 years, but Ealing decided last year not to extend it beyond its initial seven years (see letsrecycle.com story). The council cited a need to return to the market to secure a contract that would allow it to make further improvements to its service.
‘Restructuring’
This is alluded to in a report which recommends the Cabinet approve the choice of Enterprise as preferred bidder, which explains that last year the council “concluded that the re-structuring of the service that would be necessary to achieve savings and best value made extension unfeasible.”
Part of this restructuring included procuring the waste and recycling collection and street cleansing services which are currently run by May Gurney in a bundle with other environmental services, such as grounds maintenance.
In light of this, the contract which Enterprise is first choice for is known as the contract for ‘Waste and Recycling Collection, Street Cleansing, Grounds Maintenance, Burials and Associated Services’.
The deal has the potential to run for up to 15 years, though the Cabinet report details council officers’ preference for it to offer a break – a point where the deal could be ended – after seven years.
Savings
The current annual value of the council’s waste and recycling contract is £15 million, while the grounds maintenance contract is worth £5 million a year. But, the Cabinet report claims the new contract will bring major savings.
Figures from the council’s consultants White Young Green, which are referred to in the report, detail a £1.160 million saving that can be made during the first year of the new contract.
And, while the council adds that a direct comparison with the current services is made difficult due to the two operations being significantly different, it also alludes to further “significant savings” to be made in the waste collection operation.
Particular ways in which it says savings can be made include:
• increased tender competitiveness and sophistication in the waste contracts market;
• the rising trend in rates obtained for recycled materials;
• the operating efficiencies gained by integrating Grounds Maintenance into the Waste and Street Cleaning contract
• and, improved working methods.
And, the report points to the potential for further savings to be made by making service changes, which could be considered. The report states that introducing charges for a wheeled bin garden waste service could save £700,000 as well as generate income.
Kerbside sort
In the report, this emerges as just one of a number of possible service changes that the council asked bidders for the contract to provide a price for. These include potentially moving from the council’s kerbside sort recycling service – an approach closely associated with the community recycling sector ECT was part of - to a fortnightly commingled dry recycling collection.
The council explains that this could become necessary due to budget cuts and the rising cost of waste disposal.
But, it stresses that there will no changes to waste and recycling collections “from day one” of the contract, which means householders will continue to receive weekly residual waste, food waste and dry recycling collections.
The deal also covers the management of Ealing’s household waste recycling centres, in Acton and Greenford.
Implementation dates
If the Cabinet approves the choice of Enterprise, it will then enter a ‘call-in’ period until August 9. If no call-in is made, bidders will receive notification letters on August 10, triggering the 10 day legal ‘cooling off’ period – ALCATEL – which would end on August 20.
The contract is then scheduled to be “engrossed, executed and delivered” on September 24, before the ground maintenance part of the contract begins on January 30 2012 and the waste services aspect starts on April 1 2012.
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