28 June 2006

Nottinghamshire signs off 850m PFI waste contract

Today saw the first PFI waste contract signed since 2003, as Nottinghamshire county council put pen to paper on a 26-year deal with Veolia Environmental Services.

The 850 million project should see a dramatic reduction in the amount of municipal waste sent to landfill – the county said within just six years, it would cut landfill rates from 75% to just 12.5%.

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Veolia chief executive Cyrille du Peloux and Nottinghamshire county council director of environment Peter Webster sign the contract

Veolia has been set the target if recycling 52% of Nottinghamshire's waste by 2020, with just 12.5% of its waste to go to landfill.

The Nottinghamshire waste project is actually split into two contracts to be run by Veolia subsidiary Veolia Nottinghamshire Ltd.

One contract deals with smaller infrastructure requirements, including a new materials recycling facility for Mansfield, 100,000 tonnes worth of new composting capacity and upgrades to the household waste recycling centre and transfer station networks.

The other part of the project entails building a 97 million energy recovery facility, which is expected to be up and running by the end of 2011.

“Confident”
Cyrille du Peloux, chief executive of Veolia Environmental Services UK and Northern Europe, said today: “This is a very important new contract and the first waste PFI since 2003. With Nottinghamshire's pro-active approach to its waste plan, we are very confident that we can deliver on the promises of this contract. ”

The two new partners have said sufficient flexibility has been built into the contract arrangements to cater for possible changes in the waste management climate during the contract term.

Peter Webster, director of environment at Nottinghamshire county council, explained: “What happened in waste five or ten years ago is very different to what is happening now. It is very possible that where we will be in ten years time is not where we expected to be. There needs to be an ability in the arrangements to take that into account.”

Simon Bussell, managing director of Veolia Nottinghamshire Ltd, said: “Owing to the different nature of the contracts they will not impact on each other and have separate funding mechanisms.

“We will be looking to achieve Nottinghamshire’s targets, the government's targets and better,” Mr Bussell added.

Investment
In order to deal with 460,000 tonnes of waste produced by Nottinghamshire households, Veolia will be investing 140 million into the project. Around 35 million of this will be in the next five years and will go towards the small infrastructure – including the MRF.

The county council has already secured planning permission for the MRF, which will have a capacity to process 85,000 tonnes of waste every year including plastic bottles, paper, card and cans.

Mick Allen, group manager for waste management at Nottinghamshire county council said the recycling rate of 37% achieved by the county in 2005/06 – and the county's use of WRG's incinerator in Nottingham – should see no problems meeting Landfill Allowance Trading Scheme targets until the 2011 date.

Related links:

Nottinghamshire PFI waste

Pathfinder
The Nottinghamshire contract has been used as a “pathfinder” project, with experiences in developing the agreement used to shape Defra's own guidance on PFI waste projects. As such, it could help other local authorities establish their own PFI waste contracts more quickly and efficiently.

As such, today's agreement was welcomed by environment minister Ben Bradshaw, who said: “The signing of this contract shows what can be achieved, and should give confidence to the waste PFI sector and to other projects that are going through the procurement process.”

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