The Department issued a consultation yesterday on criteria for Private Finance Initiative projects, in which multi-million pound government credits are used to bring private sector investment into the provision of local authority waste services.
”The draft criteria simply seeks to state more explicitly that the government supports the use of incineration with energy recovery for the disposal of residual waste.“
– Defra spokeswoman
The consultation aims to update the criteria set for the PFI waste scheme in September 2000, when then-environment minister Michael Meacher decided to change the waste PFI focus “away from incineration towards recycling led solutions”. But, Defra is now looking to address this “perceived negative stance on incineration”.
Incineration
It is proposing to change the PFI criteria such that it states: “The use of residual waste treatment options involving recovery, including energy from waste solutions, should be considered and their use justified in line with the waste hierarchy and should demonstrate that there is no future barrier to reduction, re-use and recycling efforts, subject to constraints of economic viability.”
A spokeswoman from the Department explained: “Because of previous uncertainty in the market place regarding the role of energy from waste, the draft criteria simply seeks to state more explicitly that the government supports the use of incineration with energy recovery for the disposal of residual waste left following re-use and recycling, or where materials cannot be safely or practically re-used or recycled.
“The criteria also places a greater emphasis on waste minimisation. It is expected that when authorities develop their strategies they will pay due regard to the waste hierarchy,” the spokeswoman told letsrecycle.com.
” If there should be any criteria at all, it should take a broader stance and give local authorities the flexibility to decide what is best for their own circumstances. “
– Alice Roberts, LGA
LGA
Commenting on the issue, the Local Government Association said that if there is to be any fixed criteria at all for PFI waste contracts, it is better that the scope is broader.
Alice Roberts, executive officer for waste at the LGA, said: “The PFI criteria were apparently being used to push local authorities in a particular direction. This runs counter to LGA policy, that is if there should be any criteria at all, it should take a broader stance and give local authorities the flexibility to decide what is best for their own circumstances.”
Funding
The other key issue raised by stakeholders with regard to the PFI criteria was the imposed cap on how much government support is available to projects. This was originally set at 25 million, but raised to 40 million in 2003. Since then, some major projects have secured larger amounts – Lancashire gaining 75 million in PFI credits for its waste contract, Manchester receiving 100 million. On this issue, Defra said a review of the cap would be undertaken once it was known how much would be available in the PFI in total.
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Elsewhere in the proposals, Defra suggests a bigger role for the community sector in the contract process. Community groups had raised concerns that they were being displaced through major PFI contracts.
Consultation on the proposed criteria runs until Friday January 6, 2006. Defra said it hopes to publish revised criteria in March 2006, to come into effect at the start of the next financial year.
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