Fresh delay for 3bn Manchester waste PFI contract signing

The £3 billion contract, which is to be supported by £100 million in Private Finance Initiative credits from the government, will be the largest waste contract in British history.

A spokeswoman for the Authority confirmed that it was still in negotiations with Viridor and Laing, the consortium of companies that is preferred bidder for the 25-year contract.

It had previously been hoped that the deal would be closed before the end of the current financial year, next Monday (March 31) (see letsrecycle.com story), but the spokeswoman told letsrecycle.com that this was not going to be possible.

“Negotiations at a senior level between Viridor Laing and GMWDA continue in a positive manner towards a financial close and the start of the new contract,” she said.

“The complexity of the project and sheer volume of the documentation has caused a further slight delay,” she added.

As a result of these complications, the Authority will move towards contract award at the next GMWDA meeting, scheduled for April 4, and, after the submission of the Final Business Case to Government, reach final financial close on April 29.

Despite the delays with the signing of what would be the UK's largest ever waste management contract, preparations for the implementation of the deal have already begun.

In January the GMWDA confirmed that it had signed an Advanced Works Order with Viridor and Laing, funding preparatory works in advance of the final signing of the contract (see letsrecycle.com story).

One of the most significant aspects of the PFI will see around 600,000 tonnes of waste that cannot be recycled being taken from Manchester to five new mechanical biological treatment and anaerobic digestion plants located in the area.

It is hoped that these plants will then produce 275,000 tonnes of stabilised fuel, to be transported by rail to a new power generation facility supplying both steam and electricity for the chemical firm Ineos Chlor.