28 July 2011

Cheshire councils fail in legal challenge to PFI cut

Cheshires two unitary authorities have failed in their Judicial Review against the decision by the Department for Environment, Food and Rural Affairs to withdraw over 100million of PFI support for a scheme to treat the countys household waste.

The two authorities – Cheshire West and Chester council and Cheshire East council – had challenged the decision to withdraw the finding on five grounds in a two-day case which reached court on June 16 2011 (see letsrecycle.com story)

But, Mr Justice Langstaff, sitting in the High Court in Leeds, this week (June 26) dismissed the councils case on all five points.

Now, the councils have said they are to apply for permission to appeal the judgement.

The MBT facility proposed by Viridor for Lostock Gralam, east of Northwich

The MBT facility proposed by Viridor for Lostock Gralam, east of Northwich

The councils were planning to use the PFI funds to support a mechanical biological treatment (MBT) facility for which Viridor was appointed preferred bidder in November 2010.

The company was to build an MBT plant at Lostock Gralam, east of Northwich. The facility was to produce a solid recovered fuel (SRF) to be sent to the energy-from-waste plant Viridor is developing in Runcorn, Cheshire, in partnership with chemicals firm Ineos CHLOR.

Both Cheshire councils felt that Defra had used a flawed methodology when assessing the merits of their 25-year scheme to dispose of around 180,000 tonnes of waste a year. They also maintained that the assessment had under-estimated benefits which would have accrued from the scheme.

In particular, they questioned the fact that the project was only deemed by Defra to divert 31,000 tonnes per year of biodegradable municipal waste from landfill a year, rather than 122,000 tonnes which was how it was originally perceived. This was because Defra disregarded the solid recovered fuel (SRF) produced under the contract when assessing waste diverted from landfill.


In the High Court, Mr Justice Langstaff, this week dismissed the case on all five grounds put forward by the councils.

On the issue of SRF, he pointed to the fact that the PFI credit criteria required projects to show an additional contribution to national landfill diversion which he said was not the case in Cheshire because the SRF would be sent to the Runcorn energy-from-waste facility which was already being developed.

Referring to the case presented by Benedict Prynn for Defra, the judge said: I accept what Mr Prynn said that to count the Runcorn capacity would have been irrational as it would have meant attributing capacity that had already been delivered by the PFI funded Greater Manchester project to Cheshire and therefore Defra would have been counting capacity twice.

Mr Justice Langstaff ruled that the department had been entitled to consider the national position regarding waste disposal and to take into account estimates on how much public financial support would be needed to meet landfill targets imposed through European legislation.

The Judge decided that the process the government had followed, in reaching its decision on which projects to support, was justified. This decision was based partly on the fact that, the government decided on a macro-political and macro-economic basis that spending had to be cut significantly and quickly.


Cllr Mike Jones from Cheshire West and Chester council pointed to the 4.5 million of public money spent on Cheshire's waste procurement process

Cllr Mike Jones from Cheshire West and Chester council pointed to the 4.5 million of public money spent on Cheshire’s waste procurement process

Cheshire West and Chester council Leader Mike Jones expressed his extreme disappointment at the High Court decision.

He said: We feel that we were completely justified in asking for a Judicial Review and extremely disappointed that the hearing did not go in our favour.

In total, around 4.5m of taxpayers money was spent on a detailed and lengthy procurement process designed to identify a provisional preferred bidder. This process – designed to find a vital long-term solution to the disposal of Cheshires household waste – had just been completed when the funding was withdrawn.

Councillor Wesley Fitzgerald, leader of Cheshire East council, added: Clearly, we were hoping for a more positive outcome to the Judicial Review and it is disappointing to say the least.

This excellent scheme, drawn up between the two councils, would have solved Cheshires household waste disposal problem in an environmentally-friendly way and would have avoided the need for landfill.


The implications of the High Court ruling will be discussed by members of both authorities who will consider how best to proceed to secure the future disposal of waste in the county. In the meantime, both authorities have applied for permission to appeal.

Commenting on the case, Symon Grasby, development manager at Viridor, said: Viridor has worked alongside the Cheshire authorities throughout this process and will continue to do so in order to find a solution to meet the needs of the Cheshire West and Chester and Cheshire East residents.

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