27 September 2013

North London waste contracts scrapped

By Michael Holder

The North London Waste Authority (NLWA) has decided to scrap the procurement process for two major waste contracts after a meeting of councillors at Camden Town Hall yesterday (September 26).

As a consequence the FCC and Skanska consortium has lost out on what could have been the UKs largest waste contract ever. The pair expressed disappointment with the Authoritys late u-turn in deciding to end the procurement process for the contract.

The Edmonton EcoPark in Enfield could be modified as part of an alternative solution for North London's waste

The Edmonton EcoPark in Enfield could be modified as part of an alternative solution for North London’s waste

Also abandoned was a proposed fuel use contract to burn 250,000-300,000 tonnes-a-year of SRF produced from residual waste in North London.

Now, the Authority couldopt instead todevelop an energy-from-waste solution which would see the expansion or remodelling of the existing Edmonton incinerator,which formspart of theexisting LondonWaste EcoPark.

Decision

The NWLA made the announcement today after the decision was made at a meeting of councillors at Camden Town Hall yesterday (September 26). They expected to make a decision at a previous meeting in July but instead asked for more time to scrutinise the remaining bids (see letsrecycle.com story).

The decision means FCC Skanska has lost out on the waste services contract, while the EEW-WTI consortium of E.ON and Wheelabrator Technologies has missed out on the fuel use contract, despite both being the sole tenders left in the process.

NWLA said that the reason for not awarding the contracts which were set to run for around 27 years and were together worth more than 3 billion was because councillors believe an alternative strategy will provide a significantly cheaper solution for managing north Londons waste in the context of extreme pressures on local authority finances.

The Authority believes that it can make savings of up to 900 million over 27 years by pursuing an alternative strategy based on energy recovery in the Upper Lee Valley, which would allow it greater flexibility in developing plans to manage North Londons waste.

The two contracts were together expected to involve investment of 500-600m in new facilities, which would have handled around 3% of the national municipal waste tonnage by 2045.

‘Despite the delays in the procurement process, the NWLA had consistently led us to believe that this was an affordable and deliverable project. As a result, this late u-turn was unexpected.’

FCC Skanska spokesman

Unexpected

FCC Skanska said it was disappointed with NWLAs unexpected decision.

A spokesman for the FCC Skanska consortium said: Despite the delays in the procurement process, the NWLA had consistently led us to believe that this was an affordable and deliverable project. As a result, this late u-turn was unexpected.

Councillor Clyde Loakes, chair of NLWA, said: What is particularly important is that by pursuing this alternative approach at a time when there is immense pressure on north London boroughs finances, the Authority will avoid the need to substantially increase its costs in the short to medium term. This in turn will help limit the impact of waste management costs on council tax, and by doing so help make money available to be spent on front line services in this time of extreme pressure on local authority finances.

Over the last year, a number of changes have taken place that have necessitated this decision. The adoption of two key planning policies this summer Enfields Edmonton EcoPark planning brief in May and the Mayors opportunity area planning framework for the Upper Lee Valley in July have confirmed that the planning environment is now much more favourably disposed towards an energy recovery solution for residual (non-recyclable) waste than at the outset of the procurement process in 2010.

He added: As a result of some additional work, including a review of the existing energy from waste (EfW) facility, it has become apparent that a significant reduction in the cost of residual waste treatment could be achieved if the Authority pursues an alternative strategy based on energy recovery.

Withdrawals

The procurement process for both the waste services and fuel use contracts have been plagued by withdrawals, with Veolia Environmental Services unexpectedly ending its tender for both contracts in December 2012 (see letsrecycle.com story).

SITA UK also dropped out of the running for the waste services deal in July 2011 (see letsrecycle.com story), while US incineration specialist Covanta suspended its bid for the fuel use contract in February 2012 (see letsrecycle.com story).

Fuel use contract

The EEW-WTI consortium was one of three bidders shortlisted in April 2011 for a 30-year fuel use deal to burn 250,000-300,000 tonnes-a-year of SRF produced from residual waste in North London, alongside Veolia and US incineration company Covanta, before the latter two dropped out.

The consortium was proposing a combined heat and power (CHP) plant to recover energy from the SRF at paper recycler DS Smiths site at Kemsley in Sittingbourne, Kent.

The plant was to help power the production of corrugated cardboard from recycled paper, card and fibre at what is the UKs largest waste paper recycling mill, producing more than 850,000 tonnes of recycled paper and pulp each year.

Kent county council had already given planning permission for the plant and a permit was granted by the Environment Agency.

An E.ON spokesman said: We’re obviously extremely disappointed that the North London Waste Authority has decided to cancel this procurement at this late stage. However, the North London procurement formed one part of a fuel solution for a Combined Heat & Power plant at the Kemsley mill site in Kent. We will continue to seek appropriate alternative fuel to source for this fully consented facility.

NLWA is the UKs second largest waste disposal authority, handling just under one million tonnes of municipal waste around 3% of the UK total collected in the seven London boroughs of Barnet, Camden, Enfield, Hackney, Haringey, Islington and Waltham Forest.


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