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Cornwall signs 30-year PFI contract with SITA UK

Cornwall county council has heralded a 150 million investment programme in the county's waste management infrastructure by signing a 30-year waste disposal contract with SITA UK.

The county announced today that the Private Finance Initiative deal has been finalised after four years of preparations and negotiations.

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Agreement: (L to R) Cornwall council chief executive Sheila Healey and Cllr Adam Paynter with Louis de Poncheville of SITA UK and David Whalley, leader of Cornwall county council signing the contract

The deal was done thanks to a new way of running waste PFI contracts – with an independent vehicle, SITA Cornwall, being set up to operate outside the direct ownership of SITA UK.

Under this structure, SITA will be a minority owner of the company – with a 45% stake – with the financiers owning the majority shares.

SITA and Cornwall county council said the deal represented the first-ever PFI waste contract to be structured in such a way, and suggested that such a structure could be a pathfinder for future PFI waste deals.

Announcing the contract, Cornwall county council's chief executive, Sheila Healey, said: “We are delighted. This contract will help protect Cornwall's clean green image as well as protecting council tax payers from huge increases.”

Under the contract, which is being supported by nearly 30m in government PFI credits, SITA will upgrade existing waste facilities and develop new plants – including a controversial central energy-from-waste incinerator.

Jobs
Cornwall county council's executive member for environment and heritage, Cllr Adam Paynter, said the contract had protected local jobs.

Cllr Paynter said: “The transfer of almost all of the 200-plus employees of CES, Cornwall Paper Company, Sid Knowles Waste and Recycle West Country has protected Cornish jobs – and SITA has adopted a policy of employing local people wherever possible.”

Finance
The Cornwall PFI contract marks the first venture of the European Investment Bank to finance waste management in the UK. Funding has also come from the Royal Bank of Scotland.

SITA said a key element in securing the finance for the contract had been the decision to use “proven technologies”.

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Waste and recycling in Cornwall

It said using an independently-structured model to run the contract would “improve the capacity of the waste sector to handle the large level of capital investment required in the UK over the next few years”.

Per-Anders Hjort, chief executive officer for SITA UK, said: “In this new PFI environment, waste management companies need sophisticated resources, experience and finances available in order to deliver these complex contracts; SITA UK has proved it has the ability to manage all of the issues and deliver an effective solution for its client.”

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