Eightyears after entering the UK market, the company announced today (May 10) that it is considering a number of options for its business following a review of its UK operations.
The review was prompted by Covantas failure last month to be named as preferred bidder for a 1.2 billion, 30-year contract with the Merseyside Recycling and Waste Authority, which was instead handed to a consortium led by SITA UK (see letsrecycle.com story).
The contract loss represented the latest setback for the firm, which set up an office in the West Midlands in 2005 and employs 30 staff.
Despite bidding for numerous UK waste contracts, the company enjoyed limited success, only securing its first waste treatment contract with a local authority in 2012, with Windsor and Maidenhead.
In 2011, Covanta lost out to Veolia ES on a major 550m waste PFI contract in Leeds, and last month, Buckinghamshire county council awarded a long-term waste treatment contract to FCC Environment a deal for which Covanta was originally named as the frontrunner (see letsrecycle.com story). The failure to secure the Buckinghamshire contract was thought to have hit the company hard as it would have been a flagship project for it in the UK.
The company said it was consulting with staff, but stressed that the majority were facing redundancy if a buyer cannot be found.
The UKs founding managing director, Malcolm Chilton has left the company. He has been replaced by the director of legal and corporate affairs, Fiona Penhallurick. She is currently looking to appoint a suitably qualified firm to handle the search.
Assets
Covantas UK assets include the three strategic sites which have planning consents for energy-from-waste incinerator and permits (either confirmed or advanced drafts from the Environment Agency). The sites are Rookery in Bedfordshire (585,000 tpa); Ince in Cheshire (850,000 tpa) and Green Hills near Airdrie Scotland (300,000tpa). It also has a leasehold interest in a site in Middlewich. Other assets include municipal waste procurements in various stages and an existing waste contract.
Covanta said it had made considerable investments in the sites in order to secure consents and hopes these will now move to the construction phase, with the support of buyers or partners. Once the facilities are built Covanta would be interested in running them.
The company said it would continue to operate from its existing offices while a buyer or partner is being sought.
Related Links
The departure of Covanta from the UK is yet another example of American businesses setting up in the UK and then leaving. This includes Waste Management Inc which sold UK Waste to Biffa and more recently the UK arm of recycling incentive scheme Recyclebank was acquired by the UKs Greenredeem organisation.
[…] However, shortly after FCC lodged its appeal, Covanta announced it was seeking to pull out of the UK. The decision followed its failure to secure a major £1.2 billion contract with the Merseyside Recycling and Waste Authority – which instead handed the 30-year deal to a consortium led by Suez (see letsrecycle.com story). […]