Leicestershire seeks PFI backing for 100m waste plant

The county's cabinet approved the very first stage of a two-year procurement process on Tuesday (July 24), in what could lead to a 25-year contract signed in the summer 2009.

The contract is likely to centre around the design, building, financing and operation of a £100 million new treatment plant for non-recyclable waste, to be developed for 2015. This could take the form of an energy-from-waste (EfW) incineration process to divert waste away from landfill.

The PFI project will deal with residual waste that is not separated by householders for recycling or composting, and will not include the operation of county CA sites.

An evaluation of technology backed EfW above other technologies such as mechanical biological treatment or anaerobic digestion – largely because of its “proven” track record.

But officers told letsrecycle.com yesterday that the county is not yet ruling out alternative technologies, despite the apparent certainty within a cabinet report that incineration “with the potential for combined heat and power” represents the best option for Leicestershire.

Costs

What has been agreed is that Leicestershire will submit an expression of interest to Defra this September, seeking around 50% of the projected capital costs for the contract in the form of PFI credits. This could potentially offset costs of treating waste by as much as £20 per tonne, according to the report prepared for Tuesday's cabinet meeting.

Cllr Brian Page, Leicestershire's lead member for waste management, said: “Leicestershire is already working hard to recycle and reduce waste – but we must do more to reduce landfilling and protect Council Taxpayers from increased costs. An energy from waste scheme looks like a viable and sustainable way of dealing with most of the rubbish that we cannot recycle.”

Leicestershire recycles about 41% of its household waste each year – one of the highest recycling rates for a county in England – leaving about 225,000 tonnes of waste each year that is sent to landfill.

The county council needs to achieve a 78,000 tonne reduction in landfill every year by 2015 to escape potential £150 per tonne fines for missing its targets under the government's Landfill Allowance Trading Scheme. It is already facing a £2 million increase in the £5 million it pays out each year in Landfill Tax.

The council is aiming to increase recycling rates to 50%, and is currently procuring a separate waste treatment capacity contract to meet 2009/10 and 2012/13 Landfill Directive targets. This procurement will see tenders evaluated in September, ahead of a cabinet meeting in October and award of the contract soon afterwards.

Search

Submitting an expression of interest for PFI credits to Defra by the end of September, expectations are that a full Outline Business Case will be developed for the New Year, with the prospects of starting the search for a private sector partner in May 2008. A preferred bidder would then be selected a year later, for the contract to be awarded in the summer of 2009.

Also, Leicestershire is to hold an Open Day for prospective bidders within the next few months.

The technology evaluation, which is often kept out of the public domain at this early stage of the PFI procurement process, looked at 19 different options including various combinations of energy-from-waste, mechanical biological treatment and other technologies like anaerobic digestion and autoclaving.

It scored energy-from-waste at 88.4, compared to MBT with residues being burned scored at 75.6, MBT with AD at 72.4 and MBT with residues to landfill scoring just 44 – little better than doing nothing.

The cabinet report concluded: “Results from the options analysis show that energy from waste is likely to be the best way forward as it is a proven technology, has potential to deliver a low carbon footprint and represents a cost effective solution given the increases in Landfill Tax and potential Landfill Allowance Trading Scheme (LATS) fines.”

“Harmful”

Local media reports are already warning of the prospect of a “super incinerator”, while local pressure group Leicester Friends of the Earth has already denounced the project, with campaigner Stephen Massey saying: “We're against it because they'll be producing harmful compounds and climate-changing gases but mainly we're against it because we believe it's actually going to be a disincentive for people to recycle and reuse their waste.”

But Leicestershire's procurement manager for waste management, Harold Yates, told letsrecycle.com that nothing had been decided yet regarding the technology for the PFI contract. “BBC East Midlands Today is already talking about a super incinerator – or even two incinerators – and Friends of the Earth is very interested, but it's still very early in the process,” he said, confirming: “We will be seeking proposals putting forward other technologies than just energy-from-waste.”

Mr Yates said that no sites have been identified for any prospective PFI waste facilities, and that public consultation would be carried out as the procurement process moved forward.

He added: “There will be a bidders' day in the next couple of months which will hopefully get the marketplace interested in what we are proposing.”