Beds partnership denies conflict of interest over land purchase

Questions have been raised over the Bedfordshire Energy and Recycling Project after the council partnership opted to purchase land for the reference site from a potential bidder for its long-term PFI deal.

The Bedfordshire Energy and Recycling (BEaR) Project, involving Central Bedfordshire, Bedford and Luton councils,entered into a land option agreement for the former Brogborough landfill site with Northamptonshire-based Waste Recycling Group at the end of last month (July 21).

The agreement came after BEaR had an application for 109.9 million in government PFI-funding denied over issues with its reference site.

However, some councillors and industry experts have now voiced disquiet that the purchase of the site from the Spanish-owned waste management group – which has expressed an interest in bidding for the BEaR contract – might give the company an unfair advantage in the eventual tender process.

One industry expert explained: “The Waste Infrastructure Team at Defra might think it is odd when it is also a site of one of the bidders. I would expect the cost of the site is going to have to be passed back onto the contractor that uses it.”

Defra’s Project Review Group, which oversees the PFI-funding applications, denied the three council partnership PFI credits in March this year after it was not satisfied it had acquired or had in place an option on an appropriate site despite ear-marking a site at Rookery Pit near Stewartby in its Outline Business Case.

WRG

The council partnership, which used energy-from-waste with combined heat and power as a reference technology, denied that there was any conflict of interest in now purchasing land from WRG. And, it said that under the deal the partnership intends to pass the cost of the site back to the bidders that elect to use it and said that this means the deal “remains fair to all bidders”.

A spokeswoman for the BEaR Project told letsrecycle.com: “The partnership does not see a conflict of interest as the option agreement secures the parcel of land for the partnership and will allow it to be offered to any bidder for use in their contract.”

Spanish-owned WRG outlined its own plans in January to build an energy-from-waste facility at the Brogborough site with the intention of improving its chances to win the BEaR contract when it was advertised.

Speaking at the time, the company claimed it would be unlikely to proceed with the plans for a 120 million, 180,000 tonnes-a-year capacity facility if it was not selected for the contract (see letsrecycle.com story).

Responding to the question of potential impartiality, a spokesman for WRG told letsrecycle.com: “In our discussions with Central Bedfordshire council on the option agreement we do not believe that to be the case as there will be no competitive advantage.”

Reference

The site at Rookery Pit, near Stewartby, had been used as the reference site in the Project’s Outline Business Case, however, American incineration giant Covanta Energy has since unveiled plans to develop 600,000 tonnes-a-year capacity facility there (see letsrecycle.com story).

The council, which previously voiced its criticism of the North American firm’s plans, denied that the fact Covanta was also pursuing the site had led it to purchase the Brogborough site and claimed that it was still able to change its reference site, having identified Brogborough as an alternate option in its original appraisal.

Further criticism was leveled at the project over the decision to class the Central Bedfordshire executive meeting on July 21, where the land option was approved, as “urgent” and therefore exempt from being called-in by councillors.

Treasury

Councillor Peter Blaine, the Liberal Democrat councillor for Sandy Division, said: “I did raise a question of the Executive and it all relates to when the relevant committee will be making its decision. I think it is a little bit weak because part of the argument is that if we miss a Treasury meeting and cause a delay of some months. The argument is that the sooner BEaR Project gets along there is the opportunity to save money and there is something of argument but I would have wanted to review that.”