And, the Authority will hold a special meeting in Oldham next Friday (November 21) solely to evaluate what progress has been made on the much-delayed deal.
The two parties had targeted October 31 as the date by which they hoped to finalise the much-delayed contract, but preferred bidder Viridor-Laing has been hit by issues with securing finance in the current economic climate.
Speaking last week, the investment manager for John Laing Investments acknowledged that the consortium was still looking to “bolt down” funding for the project and was looking to achieve financial close in the last quarter of 2008 (see letsrecycle.com story).
Discussions
And, at an Efra Select Committee session held at Westminster on Wednesday (November 12), the GMWDA's treasurer and vice-chair, John Bland, told MPs: “I've been involved in detailed discussions for the last two to three days to try to close that PFI.”
Describing the PFI as “more or less” in place, he explained that “we have a deal which is ready for close; we're just waiting for funding. I'm hoping we'll be able to give good news more generally on that in the very near future.”
The Greater Manchester PFI was originally meant to be signed in April 2007 (see letsrecycle.com story), but has suffered numerous delays since then.
Costs
The financial impact of the delays on the GMWDA was raised again at last month's meeting, where the minutes reveal that “a member expressed his concern over the current overspend of £1,506,000 in advisor costs and asked if the Authority was getting value for money”.
In response, the GMWDA deputy treasurer explained that their 2008/09 budget had been based on signing the PFI deal by April 1 2008, and added, with regards consultants fees, that “as soon as financial close was reached, maintenance arrangements would supersede the current arrangements”.
However, members also stated that they had not received a quarterly monitoring report on the advisors' costs for “a considerable length of time”, and as a result a commitment was made to produce a report by the GMWDA's next full meeting, on December 5.
Last October it was revealed that, between April and September 2007, the GMWDA had already paid out an extra £632,000 in consultant's fees (see letsrecycle.com story).
Aspects
While the main contract remains unsigned, other aspects of the deal are more certain.
These include the GMWDA selling its majority stake in waste management firm Greater Manchester Waste Ltd to Viridor Waste Management for just £1.
The sale, which was part of the Authority's original arrangement with Viridor-Laing, will give Viridor control of the company which deals with 1.4 million tonnes of municipal solid waste a year.
As well as operating four materials recycling facilities (MRFs) across the Greater Manchester area, Greater Manchester Waste also operates 25 household waste recycling centres, three waste transfer stations and a 125,000 tonne a year EfW plant – the Bolton Thermal Treatment Facility.
Plants
If and when the PFI-funded deal is signed, Viridor-Laing will also be involved in the development of four in-vessel composting plants with a combined capacity of 175,000 tonnes-a-year, as well as five new mechanical biological treatment (MBT) and anaerobic digestion (AD) plants.
The 275,000 tonnes of solid recovered fuel produced by the MBT and AD facilities every year will then be sent to a combined heat and power (CHP) plant which chemical firm Ineos Chlor plans to build at Runcorn in Cheshire.
BERR gave planning permission for Ineos Chlor's £300 million facility in September 2008 (see letsrecycle.com story).
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