MRWA had serious concerns over Covanta bid

Merseyside Recycling & Waste Authority has submitted its defence to the High Court, over the legal challenge to the Authoritys decision to appoint a SITA UK-lead consortium as the preferred bidder for its 1.2 billion residual waste contract.

The Authority submitted its legal documents to the Court on Wednesday (July 31), following the launch of a legal challenge by the unsuccessful bidder American based incineration specialist Covanta over the award of the contract.

And, according to the MRWA, the defence outlines the serious concerns it had raised with the company over its proposals prior to the submission of the final bid, which was labelled fundamentally unacceptable. The organisation has also stated that had the Covanta bid been accepted, it would have exposed the Merseyside authority to serious financial risk.

Covanta began its challenge in June (see letsrecycle.com story), following the initial decision to award the contract to SITA UK and its partners SEMBcorp Utilities UK and Ituchu Corporation which was confirmed in April (see letsrecycle.com story).

The firm claims that its bid for the tender would cost the Authority up to 200 million less than that submitted by the SITA consortium and it is asking the court to order MRWA to set aside the decision not to award the contract to Covanta UK, while requiring it not to enter into a contract with its preferred bidder SITA without further opportunity for tenders to be submitted.

Proposals

Covantas bid involved the construction of an 850,000 tonnes per year capacity energy from waste (EfW) facility at Peel Holdings Inca Park development nine miles east of Chester, while SITAs proposals involve transporting the estimated 430,000 tonnes of waste per year expected to be handled over the life of the 25-year deal, to Teeside by rail for energy recovery.

Merseyside has defended its decision to award the contract to SITA, stating that the final bids put forward by each of the parties were evaluated in accordance with transparent and pre-agreed criteria, which bidders were aware of when developing their proposals.

And, the Authority says that the evaluation assessed the most economically advantageous tender, taking into account sustainability, risks that the Authority might be exposed to by the different proposals and the overall value for money of the bids. The final decision was also scrutinised by nine elected members from the five district councils that make up the MRWA.

Evaluation

Carl Beer, chief executive of the Authority, said: Following a detailed and fair evaluation process, SITA was selected as the preferred bidder. Covantas bid scored less that SITA UKs winning bid, and in two of five areas of evaluation scored zero and so was found to be fundamentally unacceptable. The Covanta bid was rejected having failed to reach minimum scores in those two areas.

In addition, during evaluation parts of the Covanta bid were seen to present serious risks including financial risks, to which the Authority, district council and Merseyside council tax payers would be exposed. These risks were determined to be such that, in public law terms, it would be irrational, in breach of fiduciary duties and therefore unlawful to enter into a contract with Covanta.

He added: This Defence strongly rejects the various allegations which have been made by Covanta, and sets out the significant risks to which Covantas solution could have given rise for MRWA if it had been taken forward. The Defence also details the serious concerns which were raised by MRWA prior to Covanta choosing to submit its bid.

Covanta now has the option to formally respond to the MRWA’s defence, although it is not known how long this process may take.