The two councils jointly procuring an £850m contract to treat Cheshire's residual household waste have revealed they plan to seek a Judicial Review against the government's decision to withdraw £100 million in PFI funding support for the project.
Cheshire West and Chester council and Cheshire East council plan to apply next week to the High Court for permission to initiate legal proceedings, claiming that the methodology used by Defra to cut the project's funding as part of the October 2010 Spending Review (see letsrecycle.com story) was “seriously flawed”.
The leader of Cheshire West and Chester council, Mike Jones, said: “We have decided to take this joint action because we believe that the methodology used by Defra to assess the merit of our scheme was seriously flawed.
“Also, it is our opinion that the assessment process has under-estimated the benefits which would accrue from that scheme.”
The move comes after Defra last month revealed the rationale behind the PFI funding cuts – with progress in contract procurement and success in securing planning permission identified as the most important factors in its decision-making process (see letsrecycle.com story).
In the case of the Cheshire project, the councils chose Viridor as the front-runner for their 25-year-deal shortly before the Defra announcement – a decision which was formally endorsed in November 2010 (see letsrecycle.com story).
Viridor then secured planning permission for the facility they plan to build to deliver the contract (see letsrecycle.com story) – with proposals to build a 200,000 tonne-a-year mechanical biological treatment facility at Lostock Gralam in Cheshire.
Expense
The councils stressed they had spent £4.5 million to date on the procurement of the deal, a point highlighted by the leader of Cheshire East council, Wesley Fitzgerald, who also noted that they believed the PFI funding was secure right up until it was cut.
“Both councils believed that there was Government support for this scheme right up to the announcement that PFI credits were being withdrawn,” he said.
“Not only has much time, effort and money been wasted believing that we were approaching this issue in a manner which had government approval but this decision would take us back to square one.”
He added that the councils still had to fund a new way to deal with their residual household waste given the “major problem” of dwindling landfill space, and were considering all the options available to them.
The Cheshire project was one of seven to have its PFI funding withdrawn as Defra looks to reduce its spending by 29% by 2014/1. Of those, the North London Waste Authority has already called on the department to reverse its decision to cut £258 million in PFI support for its plans (see letsrecycle.com story).
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