Biffa and Leicestershire sign treatment deal worth ‘from £150m’

According to tender documents, Biffa beat one other bidder to win the contract, though it’s understood both Veolia and Viridor held interest at some stage in the process.

The contract has a minimum duration of eight years but with the option for the council to extend by periods of one or more years to a maximum of 25 years.

Biffa was selected for the contract in November 2021 and the contractor and the authority, with input from the East Midlands Tenders organisation, have been negotiating over the final details in the meantime. Formal signing of the contract took place in late October.

The contract is due to become fully operational by 1 April 2023, to coincide with the operational target for the Newhurst energy from waste (EfW) plant. Biffa has a contract to supply about 70% of the total feedstock for the Covanta-operated plant. This began hot commissioning last month (see letsrecycle.com story).

Agreement

In the period between the deal being awarded to Biffa in November 2021 and signed last month, a number of changes to the proposed contract have been made.

The council has agreed to remove a stipulation which limited the contractual annual price increase to no more than 3%, which “better reflects the current economic circumstances”.

This is balanced by a right for Leicestershire to “assess the cost viability at specific points during the contract before the end of the minimum term of the contract (2031) using a benchmarking process”.

The exact tonnage to be sent is unclear, with the contract valued at anywhere between £150 million and £650 million. The guaranteed annual tonnage under the contract was amended to 40,000 from the 45,000 tonnes first awarded.

East Midlands

It is thought that the higher value of £650 million could happen should waste contracts be arranged through the East Midlands Tender organisation with other authorities. Listed within the contract notice are: Derby, East Derbyshire, South and West Derbyshire, Nottingham, Staffordshire and Warwickshire councils.

Leicestershire said the contract will provide flexibility to deliver “all, currently landfilled, residual ‘black bag’ waste to the locally situated, Newhurst EfW facility (if it is the most economically and operationally viable solution to accept the waste) as well as the opportunity to vary tonnages to accommodate increases/decreases resulting from operational changes”.

The council said it handled 175,000 tonnes of residual waste in 2020/21 (i.e. waste not sent for recycling, reuse, or composting).

Biffa

Biffa has a long history in the region. In 2002, it was awarded a £300 million, 25 year PFI contract for waste management services (see letsrecycle.com story) for Leicester.