Two companies in frame for UK’S biggest-ever waste contract

A meeting of the Greater Manchester Waste Disposal Authority yesterday decided preference for bids from SITA UK and Viridor Waste Management.

” Those taxpayers want to see a high quality environmental solution and an appropriate workforce solution, with the minimum new demands on Council Tax. “
– Cllr Neil Swannick, GMWDA
Shanks Group was named as reserved bidder for the contract, which will involve recycling and treating waste collected from almost one million households in the Manchester area.

The bid from Waste Recycling Group was, however, dropped from the Authority’s shortlist.

The contract, which has government backing to the tune of 100 million through the Private Finance Initiative, is expected to begin in April 2007. It is thought to be worth in the region of 4 billion over the 25-year period.

The Authority is responsible for waste disposal in the metropolitan boroughs of Bolton, Bury, Manchester city, Oldham, Rochdale, Salford, Stockport, Tameside and Trafford. It currently manages around 1.4 million tonnes of household waste each year, recycling about 16%.

Whichever company wins the contract is likely to either acquire the council-owned waste company Greater Manchester Waste, or use it as a sub-contractor.

Costs
Commenting on the contract bids, councillors on the Authority said they were pleased regarding the costs proposed by the companies.

Councillor Neil Swannick, chair of the waste disposal authority, said: “The two proposals we are taking forward stood out from the others in terms of their competitive position on costs and risk transfer.

“They were the highest two scorers in our evaluation and provide good prospects for best value for the council taxpayers of Greater Manchester. Those taxpayers want to see a high quality environmental solution and an appropriate workforce solution, with the minimum new demands on Council Tax,” Cllr Swannick added.

Feedback
Tim Judson, procurement director for GMWDA, told letsrecycle.com after the meeting that each of the bidders would be given feedback, with a timetable for the next stage likely to be put in place in the next few weeks.

As reserve bidder, Shanks will be asked to take another look at its proposal in the light of the Authority’s feedback, and could still replace one of the two favoured bids on the shortlist.

RDF
Yesterday’s meeting indicated that the Authority has eyes on some form of mechanical biological treatment for household waste that is not destined for straightforward recycling. Councillors decided to take forward a possible separate contract for the management of refuse-derived fuel produced as a residue from the combination of physical separation techniques and composting or digestion.

The idea of the separate RDF contract for Manchester already has the blessing of ministers, and could take the form of a separate PFI contract. Minister Ben Bradshaw has already indicated that Defra would consider such a contract for support through the PFI scheme.

The Authority has already approached Cheshire county council and Merseyside Waste Disposal Authority about a possible partnership for the construction of a plant to process RDF from all three authorities.

Landfill
A third string to the Greater Manchester bow is a short to medium-term landfill contract for 2008 to 2013. Separate to the main PFI treatment contract, it would aim to cater for household waste disposal until treatment plants under the PFI contract are up and running.

The Authority said yesterday that from dozens of bidders, it would select landfill capabilities provided by Biffa, Veolia, Viridor or WRG.

The GMWDA indicated that no single company was currently in the position to provide the landfill capacity needed, and that there was the strong possibility that more than one – or even the majority – of the shortlisted companies would ultimately be involved.