11 January 2017 by Tom Goulding

Sheffield debates early end to Veolia PFI contract

Sheffield city council is to decide whether to end its 35-year waste services PFI contract with Veolia by April 2018, on the grounds that it is not delivering the desired savings.

The authority’s cabinet will meet next week (18 January) to consider a ‘Waste Services Review’ report put forward by Simon Green, executive director of the Place Management Team.

Sheffield council wants to greater share of income from the Veolia-operated EfW plant

Sheffield council wants to greater share of income from the Veolia-operated Bernard Rd EfW plant

Veolia’s Integrated Waste Management Contract began in 2001 and is not due to expire until August 2036. But the future of the contract could be at stake.

The report to cabinet states: “Despite significant work with Veolia over the past five years, it has not been possible to achieve the level of savings required to ensure IWMC can operate within the Council’s reducing budget. The Waste Contract Review was therefore commissioned to consider if there is a deliverable alternative strategy to the current contract.”

In-house

However, the council will not initially seek to bring the services contract in-house, with the report noting: “Based on the analysis, the option to insource this service at this stage was discarded as this would result in too much risk for the Council and would not meet our prime objective of securing savings.

“However, the recommendation is that the contract will include a requirement for bidders to set out how they will introduce new ways of working to bring greater efficiencies and safer working practices and at the same time enable the Council to consider insourcing this service following expiry of the contract.”

In place of the Veolia arrangement, the council could introduce a contract with separate lots for collection, recovery and HWRC management aimed at offering a more ‘responsive, flexible, improved and sustainable service’.

The council has proposed rolling out a 240L brown bin for households

The council has proposed rolling out a 240L brown bin for households

Collections

At present recyclables in Sheffield are collected fortnightly by specialist split-body vehicles, with glass, cans and plastics collected from a 140-litre blue bin and paper and card from a 55-litre blue box.

In a review of its waste policies, the council has proposed swapping residents’ blue boxes with 240-litre brown bins for glass cans and plastics – with paper and card moved to the slimmer 140-lite bin.

By removing boxes, this would allow the council to replace the split vehicles with cheaper standard collection trucks and would require less manual tipping by crews.

While refuse would continue to be collected every fortnight, brown bins and blue bins for recycling will be collected on alternate weeks – meaning a four-weekly cycle between collections. The council is also considering shared bins for some streets, a policy which has been previously adopted by Derby city council.

Notably, the colour of the 240-litre brown bin had been chosen to ensure consistency with Barnsley, as the council ‘has the aspiration to work more closely with neighbouring South Yorkshire authorities and ‘align waste services where possible’.

ERF

The council will also consider re-tendering operations at its Bernard Road energy from waste plant, to ‘seek a significantly higher share of income’ than is available under the Veolia contract.

The plant, which is a ‘static asset’ owned by the council, takes in around 50,000 tonnes of waste per year from Sheffield as well as additional tonnage from third party contracts.  The council fears that with ‘a very limited number of customers’ it could struggle to operate the plant at maximum capacity, and will not have the ‘technical expertise’ to manage the plant itself.

“Our contract with Veolia, which was signed 16 years ago, is no longer meeting our needs and is no longer compatible with the tough financial landscape in which the Government is forcing us to operate.”


Cllr Bryan Lodge, cabinet member for environment
Sheffield city council

Sheffield also has concerns over management of the district energy network – which utilises waste heat from the plant to power a ‘number of customers’ – which ‘presents a significant risk’ to the council due to its age and the condition of the pipework. The council notes: “This uncertainty is exacerbated because of the lack of transparency in the IWMC with Veolia.”

‘Tough’

Commenting on the proposals, councillor Bryan Lodge, cabinet member for the environment, argued the council was operating in “very tough financial times”.

He said: “Our contract with Veolia, which was signed 16 years ago, is no longer meeting our needs and is no longer compatible with the tough financial landscape in which the Government is forcing us to operate.”


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