Durham hands 112m waste contract to SITA UK

Durham county council has awarded an eight year contract to waste management firm SITA UK to treat around 140,000 tonnes of residual household waste per annum.

The announcement today (February 1) comes just two days after it emerged that council-owned Premier Waste Management, which currently holds the contract, is set to wind down in May.

The residual waste treatment contract, which starts in June 2013 and is worth over 112.8 million, also has an option for a four year extension, which would take the overall value to 158.9 million.

The bulk of the waste will be treated at SITAs Teesside EfW facility which is currently under construction and is expected to be completed later this year, with waste set to be treated at other SITA facilities while the plant is completed.

Some waste will also be treated at SITAs mechanical biological treatment (MBT) facility at Byker, where it will be used to create compost for land remediation or turned into refuse derived fuel (RDF).

Under the councils existing contract with Premier Waste Management, non recyclable waste is sent to landfill.

Technology

The Teesside plant is being built close to SITAs existing Tees Valley facility, which consists of a 390,000 tonne waste incinerator, an incinerator bottom ash recycling facility, and a composting plant.

SITA already has a strong presence in the North East, having existing contracts with Northumberland, Stockton, Middlesborough, Redcar and Cleveleland and Hartlepool councils, as well as the waste collection contract for North Lincolnshire council, which it won in August 2012 (see letsrecycle.com story).

Commenting on the contract award, David Palmer-Jones, chief executive at SITA UK, said: We are very pleased to have been appointed to work with Durham county council to help put their residual waste to good use. We are also pleased to further expand our activities in the North East of England, where we are currently investing millions of pounds in modern waste management facilities.

Don Mclure, corporate director, resources at Durham county council, said: We are delighted to be working with SITA UK, whose innovative treatment processes will help ensure the amount of County Durhams rubbish that gets buried in the ground is kept to an absolute minimum. The council has a target of diverting 75% of household waste away from landfill by 2020 and the new contract will ensure this target will be met and exceeded, with around 90% of waste diverted as the contract progresses.

Premier Waste Management

Premier Waste Management has managed Durhams waste since 1993, but the council began tendering for a new residual waste treatment contract in March 2012.

Durham is also procuring separate contracts for the operation of its household waste recycling centres (HWRCs) and waste haulage, which will see Premier Waste Management wound down at the end of May after the council contracts expire.

The closure of Premier Waste Management is expected to result in the loss of 60 jobs.

Professional services firm KPMG has been appointed to oversee the winding down process and confirmed that Premier Waste and its parent company Durham County Waste Management Company Limited (DCWM), have entered into Company Voluntary Arrangements (CVAs) which allow them to trade until the contracts are completed.

Mark Firmin, KPMGs regional head of restructuring and proposed ‘supervisor’ of the CVAs, said: The proposed CVAs are a tool for achieving an orderly wind down of the companies upon the termination of their key contract.

In detail, they are intended to allow the directors to continue to run the business and generate profit for the benefit of the creditors, which increases the estimated return to creditors to 27 and 42 pence in the pound in DCWM and Premier Waste respectively, compared to 19 and 32 pence in a liquidation scenario.