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Doncaster defers decision on BDR Waste Project

The four bidders for the Barnsley, Doncaster and Rotherham Waste PFI project will now have to wait until next month at the earliest to find out which two of them have been shortlisted.

The delay comes after Doncaster council's Cabinet opted on Monday (January 18) this week to defer a decision on its continuing support for the project (see letsrecycle.com story).

Few details have emerged as to why Doncaster has not yet agreed to move forward to the next stage.

However, it is thought that the authority is keen to look in detail at the financial implications of the proposed PFI agreement and is also keen to take stock of the potential for merchant facilities, and other alternatives, to handle some of its waste should the PFI project not go-ahead.

Control

The overall expectation remains that Doncaster will stick with the PFI project and the delay is in part down to the fact that a new grouping took control of the council last year and wishes to ensure it has had sufficient time to assess the waste project because of its financial impact.

Both Barnsley and Rotherham agreed to move forward to the next stage, which was to see the Waste Project Board meeting on January 25, 2010 to shortlist two of the four bidders.

The councils have recently received updated information about the affordability of the options as well as details of necessary changes to the project budget, which are thought to relate to ongoing procurement costs. Defra has allocated £77 million to the project in PFI credits.

The issue of break points under the procurement process are part of a complex Inter Authority Agreement which has been prepared by legal firm Walker Morris of Leeds. David Kilduff, head of the commercial group at Walker Morris, was unavailable to comment on the process.

But, it is understood that there is concern among some of the authorities at the implications of proceeding with the procurement process and whether they will face penalties if they chose to quit.

Fines

Previously, Mr Kilduff has spoken of the waste reduction targets facing the three councils and has warned: “If any authority fails to meet its target they could face significant fines.”

At present there are four bidders:

  • AmeyCespa;
  • Earth Tech Skanska;
  • SITA Lend Lease;
  • 3SE (Shanks Group PLC and Scottish and Southern Energy Limited).

All four are thought to have put forward a mix of options for the waste treatment contract with variations on energy from waste as the main route.  The potential for energy generation is expected to figure prominently in assessment of the bids as it will also have an impact on revenues for the project which will serve a population of 767,000.

Board statement

A statement issued by the BDR Project Board this week, noted: “In view of Doncaster's deferral yesterday, we are unable to confirm an announcement date on our de-selection down to two bidders, but hope to be able to do so shortly.”

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