The group, which brings together Gateshead council, South Tyneside council and Sunderland city council, placed a contract notice in the Official Journal of the European Union (OJEU) earlier this month seeking bids for the award, which would involve the treatment of 200,000 tonnes of residual waste a year.
Advertising for bids represents the first step in the procurement process which was triggered by the partnership's success in securing £73.5 million of PFI funding for the project from Defra in July 2008 (see letsrecycle.com story).
The contract is a key component of the South Tyne and Wear Waste Partnership's (STWWP) joint municipal waste management strategy, which seeks to address the 370,000 tonnes of waste the region produced in 2006-07, and its 26% household waste recycling rate.
Despite the PFI-funded contract offering part of the solution, a spokeswoman for the STWWP told letsrecycle.com that: “Recycling is the top priority.
“We're trying to double the rate by 2020 – we're at 26% now, and we're aiming for 50%,” she added.
Technologies
Potential bidders for the huge contract are being advised that, while the partnership included both Energy-from-Waste to produce combined heat and power and mechanical biological treatment with aerobic digestion as the reference technologies in its outline business case (OBC) submitted to Defra, it will consider any options.
The spokeswoman said: “We're going out technology neutral, we're saying that any technology can be used.
“There could be more than one, it might be a combination of technologies, we're leaving it all up to the bidders,” she added.
The reference technologies included in the OBC were arrived at following an assessment of nine different options which was undertaken by the STWWP last summer (see letsrecycle.com story).
Costs
And, while the OJEU notice does not specify the total cost of the contract, the OBC indicated that the individual costs of each of the technology options considered were budgeted at values ranging between approximately £900,000 million and £1.3 billion.
This includes the reference technologies being modelled at £906,000 million for EfW with CHP and £1.057 billion for aerobic digestion – which was included, according to the OBC, to allow for “the range of costs that might be incurred” by the project.
Meanwhile, capital costs for the development of the treatment facilities themselves were estimated at between £28.67 million (for “baseline” and the anaerobic digestion of food waste) and £136.03 million (for the EfW with CHP option).
Sites
As with a number of other major waste treatment projects that are currently in procurement around the UK, South Tyne and Wear has made the securing of suitable sites a priority.
As a result, prior to publishing its OBC last October, the partnership undertook a site selection process to support the reference projects, and, while the sites identified are not specified in the document, it concluded that “the preferred sites for the reference cases and the supporting facilities are in council ownership”.
Timeline
The timeline set out for the project gives potential bidders until October 27 to submit tenders for the contract, with the aim being to select a bidder and technology option by December 2010 and have the facilities up-and-running by January 2015.
However, this means that the STWWP is also seeking to develop contracts for waste treatment for the period after each of the three councils' current waste disposal contracts, which are held on an individual basis, end.
SITA UK is responsible for Gateshead's residual waste disposal at its Path Head landfill site, in a rolling contract which began in March 2006 and is renewed on a two-year basis.
And, the company is also contracted for Sunderland's waste disposal and landfill, while South Tyneside's residual waste disposal needs are met by Premier Waste, under a contract which ends on March 31 2010.
And, the OBC stated that: “The Partnership is in early discussions with potential contractors as outlined in the LATS Strategy to help inform and plan a bridging arrangement between 2009 and the commissioning of a new treatment facility or facilities for a proportion of waste to ensure LATS compliance.
“These discussions involve the available capacity, cost and performance of residual treatment options, which the Partnership may seek to procure on a 3-year contract with a series of 1-year extensions, which will guard against any delays in provision of the plant,” it added.
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