Negotiations extended for nation&#39s biggest waste contract

The Greater Manchester Waste Disposal Authority is to hand the contract, worth more than 2.5 billion over 25 years, to either SITA UK or Viridor Waste Management next year.

” We have set a tight deadline because we would rather push back targets than be waiting. “
– Tim Judson, GMWDA
But because of the complexity of the massive deal, the Authority has now put back the start date of the contract to the end of June 2007.

Originally, the successful firm would have begun operations in the metropolitan boroughs of Bolton, Bury, Manchester city, Oldham, Rochdale, Salford, Stockport, Tameside and Trafford in April 2007.

Deadlines
Procurement director Tim Judson said that when setting deadlines for the contract procurement, there had always been the view that the timetable could shift.

He explained that the Authority had preferred to be ambitious with its deadline-setting to avoid any long waits after negotiations are complete.

He said: “We took the view that we should open a dialogue with the bidders before they put together their final offers. This was because we wanted to address the commercial issues as early as possible. But we have set a tight deadline because we would rather push back targets than be waiting for the next date in the timeline.”

The proposals from SITA and Viridor for the contract are now due back on November 6 this year, with an evaluation phase taking place over the several months following this deadline. A preferred bidder will be selected by the full council at the end of January.

PFI
The GMWDA contract is being backed by 100 million in Private Finance Initiative credits from the government, and will involve the management of waste produced by 958,000 households.

The Manchester area generates about 1.5% of all the UK's waste, around 1.4 million tonnes of household waste each year, with current recycling rates at 16%.

The PFI contract will see the successful company aiming for a recycling rate of 50% for Manchester's waste, as well as establishing some form of residual waste treatment to help cut landfill rates to just 35% of 1995 levels by 2020. Manchester's landfill contract is being let separately (see letsrecycle.com story).

Mr Judson said the Authority would get the contract started before June 30 if the commercial negotiations go quicker than expected.

The Authority's current waste contractor is Greater Manchester Waste Ltd, a local authority-owned company which is to be acquired by the winning bidder as part of the PFI deal. Mr Judson said that a contractual arrangement is already in place to extend the company's involvement in Manchester's waste disposal until the new contract is signed.