Flexibility key as Northants eyes short-term deal

Northamptonshire county council has unveiled proposals for a localised, shorter-term residual waste treatment project as the replacement for Project Reduce, the 25-year PFI contract it had planned to develop with Milton Keynes council.

Project Reduce was abandoned late last year, after Defras October 2010 decision to withdraw 138 million of PFI support for the project as part of the governments Spending Review spelt the end for the councils joint-working (see letsrecycle.com story).

Milton Keynes council formally began its solo procurement for a long-term residual waste treatment project last month (see letsrecycle.com story). And, Northamptonshire county councils Cabinet is now scheduled to meet tomorrow (July 19) to consider proposals for its own waste treatment project for around 200,000 tonnes-a-year of residual household waste.

The Cabinet report includes plans to divide the county area into three zones: North Northamptonshire (Corby, Kettering, East Northants and Wellingborough); Central Northamptonshire (Northampton and Daventry); and, South Northamptonshire (which would be partnered with Cherwell in Oxfordshire).

It claims this would have a number of benefits, including:
– Helping to spread risk by ensuring the council isnt reliant on a single contractor
– Meaning the council could benefit from a range of technologies and local solutions;
– Fitting with the locational hierarchy set out in the countys Minerals and Waste Development Framework
– Increasing the chances of waste treatment fitting the proximity principle where waste is treated as near as possible to where it is generated and, as a result, reducing emissions and transport costs.

The council says this could encourage more local providers but could also put off larger waste management companies. And, as such, it proposes to let each zone as a lot, but to allow bidders to bid for more than one lot if they demonstrate the economies of scale and benefits for NCC.

Contract length

The report also proposes a shorter contract length than the 25-years which Project Reduce would have involved. It explains that it had become increasingly clear that entering into a 25 year contract to build a large facility would have limited NCCs ability to explore changes in technology, and limited its ability to respond flexibly to expected changes in waste arisings, market conditions and legislative changes.

The council notes, however, that the councils desire for flexibility needs to be balanced against the need for any contractor to be able to recoup the capital investment they have to put into their treatment facilities.

It claims this normally takes seven years and, as such, proposes the minimum contract length be seven years, and all bidders be asked to price contract lengths for both seven and 12 years.

This will enable NCC to take account of emerging technologies and allow flexibility to respond to changing market conditions, while also allowing the market a degree of certainty of supply in order to reduce costs where possible by way of longer term contracts, the report states.

Commenting on the proposals for the procurement, councillor Ben Smith, county council cabinet member for the environment, said: This new strategy is very positive and encourages solutions to be found at a local level. It also invites innovative methods, which are going to be necessary if we are to tackle this very real and mounting problem.

A great deal of work has been going on behind the scenes with our partners in the borough and district councils in the county to get to where we are now.

Timeline

If the procurement plans are approved tomorrow, the council expects to spend the rest of 2011 putting together a project team and its procurement documents, before formally launching the tender process in January 2012.

It then aims to award the contract in November 2012, and to have facilities operational by April 2013.