15 October 2018 by Elizabeth Slow

NLWA seeks public funding for Edmonton ERF

The North London Waste Authority (NLWA) has announced that the construction of its new energy recovery facility (ERF) in Edmonton will be funded through direct public borrowing.

This means that the authority will be borrowing money from the government to pay for construction of the facility, rather than outsourcing this to a waste management company.

It is different from a contract with a private contractor under a Public Private Partnership style arrangement, where the contractor borrows through bank/project financing, NLWA said.

An artist’s impression of the proposed new Edmonton EfW facility

‘Important step’

According to NLWA, this is an “important step” in the project as it enables companies who are interested in bidding for construction of the new plant to understand the basis on which bids will be sought.

NLWA’s application for a Development Consent Order for a replacement ERF at the Edmonton EcoPark, with associated development (known as the North London Heat and Power Project), was granted in February 2017 (see letsrecycle.com story).

The final selection of public funding source will be made by NLWA in due course. NLWA said it has conducted a ‘best value consultation’ to ensure that the approach to delivering the Project offered the best possible value for money.

NLWA will be seeking public funding for a ‘design and build’ contract with a construction company for the design and building of the ERF. NLWA would typically make stage payments to the contractor during the construction period.

Risk

When contacted by letsrecycle.com, a spokesperson for NLWA explained that by publicly funding and owning the facility itself, the authority will avoid having to pay a gate fee. Instead, NLWA will be managing the risk itself.

In terms of risk, the spokesperson added: “Projects such as this always have risks, but one of the criticisms of PFI is they can charge public sector a lot.”

The spokesperson said he believed the project would be a “major undertaking” and cost in the region of £500-600 million. The cost of the project will fall to the council tax payers in the North London area.

NLWA expects the new ERF to be operating by the end of 2025 or, by the end of 2027 at the latest. Design work is already underway on other elements of the project; the development consent provides for a new ERF together with a Resource Recovery Facility, a new Reuse and Recycling Centre, and EcoPark House – an office block with a visitor reception centre, which will also be used for education purposes.

‘Good value’

“In making this decision, members have balanced the need to find an option with a manageable level of risk with funding the Project at the lowest anticipated cost.”


Councillor Clyde Loakes
NLWA

Councillor Clyde Loakes, chair of NLWA, said: “I’m delighted to announce that NLWA has chosen to fund this important project through direct public borrowing. In making this decision, members have balanced the need to find an option with a manageable level of risk with funding the project at the lowest anticipated cost.

“When the construction contract is let, the authority will manage it to deliver a good value waste to energy plant in which the people of North London can take pride. This will be a solution which is sensitive to demands on council tax payers”

The next steps in the project will be the award of two contracts to construct an access road and for a lay down area, which is due for the first quarter of next year.

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