NLWA calls for reversal of 258m PFI funding cut

The North London Waste Authority (NLWA) has written to the government calling on it to reverse its “bizarre” decision to withdraw the £258.4 million in PFI funding it had awarded the project.

Expressing its disappointment at the move, the authority, which handles waste disposal for seven North London local authorities, also claimed it made a mockery of the government's claim to be the “greenest ever”, as well as its commitment to promote anaerobic digestion and renewable energy.

And, the NLWA said that, rather than delivering value-for-money, the withdrawal of the money, which it was awarded in March 2010 as the largest ever PFI award for a waste project (see letsrecycle.com story), would increase the tax burden on local residents.

The chair of the Authority, councillor Clyde Loakes, said today (October 21): “This is bitterly disappointing and a bizarre announcement. The Coalition has cut its funding for this project when it confirmed the approval as recently as July.

“As yesterday's decision stands the Coalition Government cannot continue to claim that it seeks to be the ‘greenest ever'; to want to see a major expansion in anaerobic digestion, to support an increase in renewable energy and to support the ‘green economy,” he added.

Cllr Loakes said that, under the project, the authority planned to develop 470,000 tonnes-a-year of anaerobic digestion capacity, as well as generating 117 megawatts of renewable electricity.

When announcing the withdrawal of PFI funding for seven projects yesterday, the government said it would save Defra £3 million by 2014/15, rising to £26 million a year by 2017/18 (see letsrecycle.com story).

But, questioning the fiscal benefits of the move, Cllr Loakes said: “This decision is not about value for money – it is simply the Government imposing a greater tax burden on the local council tax payer in already challenging times. It should be reversed and we have today written to the Government on that basis.”

Procurement

Procurement for the long-term deal formally began in April 2010 (see letsrecycle.com story), with the aim of delivering AD, mechanical biological treatment, energy-from-waste and recycling infrastructure.

Shortlists for the two elements of the 30-year deal were announced in July 2010 (see letsrecycle.com story), and the Authority today stressed that it has a number of “serious” bidders for the contract, which it aims to award in 2012.

Other councils affected by yesterday's announcement have also expressed their disappointment at the move (see letsrecycle.com story).

“Extremely concerned”

In addition to the NLWA's concern, Cheshire East and Cheshire West and Chester councils have also called for a showdown with the government to discuss the withdrawal of the provisional allocation of £100 million towards its waste management plans.

In a joint statement, the two local authorities said they were “extremely concerned” and stressed disappointment at the timing of the decision. The councils had named a two-bidder shortlist for the £850 million deal in February 2009 (see letsrecycle.com story).

Councillor Mike Jones, leader of Cheshire West and Chester council, said: “I am extremely concerned by this development because after a five-year process, we were so very close to a solution to our household waste disposal problem over the next quarter of a century.”

The sentiments were echoed by Cllr Wesley Fitzgerald, leader of Cheshire East council, who said that both parties were “disappointed” by the outcome given that “an awful lot of time and work has gone into this joint project”.