Veolia withdraws from NLWA procurement

21 December 2012

Veolia Environmental Services has withdrawn its tender for two large-scale contracts with the North London Waste Authority, leaving an element of uncertainty around the future of the deal.

The waste management firm had been shortlisted for the NLWA’s waste services and fuel use contracts, but has submitted notification to the Authority of its withdrawal from both.
The announcement leaves just one bidder in place for each contract: a consortium of FCC/Skanska the waste services deal estimated to be worth, and E.On/Wheelabrator for the fuel use contract estimated to have a combined value of around £4 billion.

The NLWA, which represents seven boroughs, will now only have one contractor to assess for each of two contracts
The NLWA, which represents seven boroughs, will now only have one contractor to assess for each of two contracts

Details of why the company has opted to withdraw have not been made public, but a range of factors are thought to be behind the decision, including financing and uncertainty around the future of the project.

The procurement process has so far been plagued with withdrawals, after SITA UK dropped out of the running for the waste services deal in July 2011 (see letsrecycle.com story ), and US incineration specialist Covanta withdrew its bid for the fuel use contract in February 2012 (see letsrecycle.com story).

Government guidance

NLWA is now to follow published Government guidance on managing a "premature ending" of a competitive process. The Authority represents seven boroughs: Barnet, Haringey, Camden, Enfield, Hackney, Islington and Waltham Forest.

It will be required to consider the strength and quality of the remaining bid for each contract, consider the extent to which the competition up to that stage has been effective, and consider whether value for money can be demonstrated with only one bidder for each contract.

Commenting on the news, councillor Clyde Loakes, chair of the NLWA, said: “Although it is disappointing that we will not receive competitive bids, we will now work with remaining bidders and undertake work ourselves to ensure that we are still able to deliver long term, sustainable services that are the best possible in both quality and cost terms, and that value for money is delivered for tax payers.

“I hope today’s announcement on the future use of the Pinkham Way site will provide some further clarity and certainty for local people. They now know that subject to a successful planning application at the existing Edmonton site, there should be no residual waste treatment at Pinkham Way.”

Veolia Environmental Services said it had no comment to make on the matter further to the NLWA statement.

Pinkham Way

NLWA has also announced today that it is likely to abandon its plans for a proposed mechanical biological treatment (MBT) facility at the controversial Pinkham Way site in Haringey, which has been the subject of considerable opposition from the local community.

The Authority had originally proposed, MBT facilities at two sites, but has revealed that subject to a successful planning application for a facility at Edmonton, the Pinkham Way plans will not be taken forward. The announcement is said not to be linked with the Veolia ES decision.

But, plans for a waste transfer station on the site will remain unaffected any withdrawal of the proposed MBT facility, NLWA has said.

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