Leicestershire county council is set to abandon the procurement of its 685 million long-term residual waste treatment project, claiming the withdrawal of PFI support in October 2010 had made the development unaffordable.
The county councils Cabinet will meet next week (July 26) to approve plans to bring a halt to the project. It would have involved the construction of a treatment facility for up to 180,000 tonnes-a-year of household residual waste at a site at Bardon, to the North East of Leicester.
The local authority claimed that last months announcement in the Waste Review that the LATS scheme is set to be scrapped after 2012/13 had also influenced its decision because it meant it would not have to meet any specific landfill diversion targets until 2019/20.
But, it said that these long-term targets, as well as national, regional and its own waste management strategies meant there was still a need to explore as-yet-unspecified proposals that will deliver alternatives to landfill disposal.
Just two bidders were left in the running for the Leicestershire contract when Defra decided to withdraw the 86.6 million of PFI credits it had earmarked for the project as part of last years Spending Review (see letsrecycle.com story).
Of those, the Osiris Consortium involving Shanks, Costain and John Laing had proposed to build a mechanical biological treatment facility producing refuse-derived fuel at the Bardon site, while Veolia ES Aurora proposed an energy-from-waste facility.
Commenting on the plans to abandon the procurement, the councils cabinet member for waste management, Richard Blunt, said: We have one of the best recycling rates in the country and remain committed to driving down the amount of waste sent to landfill.
“Since we embarked on this project, the economy has shifted and there are planned changes in national waste policy. The financial climate has put huge pressure on public spending and the loss of the credits adds considerable costs to the project.
He added: “Officers have assessed different ways of taking the project forward but the loss of the credits makes it financially unattractive to continue.
In the Cabinet report, the council notes that the loss of the money would be equivalent to the net cost of the treatment contract increasing by more than 25%. This is because the credits would have amounted to 6.4 million, or 162 million in total, over the life of the 25-year contract.
Outlining why there was still a need to procure alternatives, the council explains in the report that, while it is forecast to meet its landfill diversion targets up to and including 2012/13, it will need to procure new capacity if, as it expects, its waste begins to grow again as a result of predicted economic growth.
At the moment, the council has contracts to send residual waste to New Earth Solutions Cotesbach MBT facility and to the Coventry EfW facility.
But, the report states that: In the medium term leading up to the 2020 landfill diversion target, the County Council will need to plan well in advance for procurement of alternative forms of treatment as uncertainties and risks regarding future changes in waste growth, availability of treatment capacity, increasing landfill tax and the rising cost of treatment will need to be managed.
It adds that further reports on the situation will be submitted to the Cabinet as necessary.