South London councils reveal waste PFI shortlist

The partnership, which involves the London boroughs of Croydon, Merton, Sutton and Kingston-upon-Thames, is procuring the long-term contract to develop waste treatment infrastrcture with the capacity to treat around 200,000 tonnes of residual waste.

And, while they stressed that they were technology neutral, the councils have made it clear that any bidder using thermal treatment must recover energy and look to provide “efficient” heat off-take to be used locally.

The four bidders shortlised for the deal, which is set to receive £225 million in PFI funding from Defra over its 25 to 30 year lifetime, are:

• Resources From Waste – a consortium between utilities company United Utilities, construction firm Laing O'Rourke and equity investors John Laing;
• French-owned waste management company Veolia;
• Somerset-based waste and recycling firm Viridor;
• Spanish-owned waste company Waste Recycling Group.

All four will now be asked to submit detailed proposals for the contract, which will then be evaluated, leaving two bidders to submit final tenders in January 2011 with the aim of awarding the contract in May 2011.

The contract represents is the last of four major long-term waste and recycling contracts to be procured by the four council partnership, after it awarded deals for waste transfer and disposal and for sorting recyclables and treating organic waste to Viridor in 2008 (see letsrecycle.com story), while EWC was given responsibility for managing the area's seven civic amenity sites in 2008.

Councillor Colin Hall, chair of the South London Waste Partnership joint committee, explained that the waste treatment contract was essential for dealing with the waste not addressed by these deals.

“There are environmental and financial reasons why we cannot continue to bury this waste in landfill. We must do something more innovative and sustainable with it and that's what this latest contract is all about,” he said.

“Putting in place modern and technically-advanced waste treatment facilities that will come into operation in 2014 and allow us to finally end our reliance on landfill,” he added.

The Partnership received an initial allocation of PFI credits of £112.9 million in March 2009 (see letsrecycle.com story), based on a reference technology of building two 106,500 tonne-a-year capacity mechanical biological treatment facilities, and one energy-from-waste plant with combined heat and power, also with a 106,500 tonne-a-year capacity.

The contract was advertised in the Official Journal of the European Union in May 2009, where the Partnership said that it aimed to make three sites available to bidders – one in Croydon, one in Kingston and one in Merton – but would allow bidders to propose their own locations as well.

South London Waste Plan

It is being procured at the same time as the Partnership develops the South London Waste Plan, a planning document which identifies sites within the area that can be used for waste treatment.

The Partnership estimates 49 acres of land will be needed to accommodate the waste facilities that will need to be developed between now and 2021 and named a shortlist of 28 sites considered potentially suitable last year.

It is now considering eight additional sites that were not on the shortlist, before drafting a final version of the Plan and publishing it in autumn 2010.

The plan will then have to be submitted to the Secretary of State to be considered by an independent planning inspector, with the four councils aiming to formally adopt the plan in the winter of 2011.