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Costs of Coventry’s in-house MRF rise to £65m

Coventry city council says the costs of building its in-house materials recycling facility (MRF) in partnership with seven other local authorities have risen by 4.9% to £65.2 million.

An artist's impression of the Sherbourne MRF

However, the council said the rise was “significantly” less than price increases incurred by other construction projects due to the same “unanticipated financial pressures”.

The eight partners have established a company, Sherbourne Recycling, to oversee the building and operation of a 175,000 tonnes-per-year capacity MRF.

Nuneaton and Bedworth borough council, one of the eight partners, will meet on 9 November to discuss the MRF. Documents which will go before the meeting show the initial capital budget for the project was £62.5 million.

This covered construction costs, process equipment costs, the budget to establish Sherbourne Recycling and “an amount of capitalised interest”.

However, a spokesperson for Coventry city council told letsrecycle.com: “While the bulk of the project costs are fixed, some elements have increased due to various external factors including the weakening pound, increased raw material costs, supply chain issues due to the war in Ukraine and rising energy costs.

“Over the period since the construction phase began, other projects have seen significantly higher rises due to these unanticipated financial pressures, with some industry costs rising by as much as 30% over the same period.”

The spokesperson said each of the eight partner councils would provide additional funding to the project, “based on its relative share of the total project costs.” At the meeting, Nuneaton and Bedworth will discuss giving Sherbourne Recycling an additional £233,784 loan.

Partners

The eight councils behind the MRF are: Coventry city council, North Warwickshire borough council, Nuneaton and Bedworth borough council, Rugby borough council, Stratford district council, Solihull Metropolitan borough council, Walsall council and Warwick district council.

“While the bulk of the project costs are fixed, some elements have increased

  • Coventry city council spokesperson

Each partner council committed to meet the capital funding requirements of the project in proportion to the amount of recyclable waste which they anticipated sending to the facility for processing, the documents say.

Additional construction costs, delay damages, foreign exchange rates, utility costs, professional and legal fees, staffing costs, higher ICT costs, “significantly higher” insurance premiums and the falling value of the pound have all increased the cost of the project, the documents show.

MRF

Construction of the MRF has been underway since May 2021. It is due to open at the end of the summer of 2023.

The facility will be located on former allotment land on the outskirts of Coventry, adjacent to an energy from waste facility operated by independent waste management firm Coventry & Solihull Waste Disposal Company.

The MRF is to feature integrated artificial intelligence, including several sorting robots and optical sorters provided by Machinex (see letsrecycle.com story). Vehicle manufacturer Linde Material Handling has supplied Sherbourne Recycling with five X20-X35 electric forklifts.

Technology start-up SortFlow has signed a deal with Sherbourne to develop software which makes the process of recording input and output samples “faster and more reliable” (see letsrecycle.com story).

Representing an estimated population of more than 345,000, Coventry city council had a household waste recycling rate of 34% in the 2020/21 financial year.

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