With the contract also expected to be advertised in the Official Journal of the European Union in the next few days, the Authority said that it was “confident” that it would deliver the project within its 29-month timetable.
We're getting good signals from bidders on both sides, which suggests we'll have a successful procurement process
Tim Judson, director of procurement, NLWA
And, it highlighted the lessons that it had learnt from the Greater Manchester waste PFI, both in terms the importance of securing planning permission for facilities promptly and how using an alternative procurement process would “shut the door” on the situation that had created legal issues on that deal.
The North London Waste Authority (NLWA), which is responsible for disposing of waste from seven London boroughs, received a record £258.4 million in PFI credits from Defra last month (see letsrecycle.com story), paving the way for it to begin procuring a project which is expected to deal with up to 1.2 million tonnes-a-year of waste by the end of its 30-year lifetime.
The authority is procuring two separate contracts – one for waste services and one for an energy facility to utilise the expected 320,000 tonnes of solid recovered fuel the waste services aspect of the project is expected to produce every year.
Speaking to letsrecycle.com last week about the early levels of industry interest in the project, the NLWA's director of procurement, Tim Judson, said: “We're getting good signals from bidders on both sides, which suggests we'll have a successful procurement process.
“We're pretty confident in our abilities to deliver not only the procurement process but also the opportunities on the ground for bidders.”
Highlighting the importance of the “flagship” project, Mr Judson welcomed Defra's support and claimed that it represented a “major opportunity” for the department. In particular, he noted that it was expected to involve handling around 3% of England's municipal waste tonnage by 2045,
He also stressed its significance for the capital, explaining that: “London's behind the rest of the UK, so there's a major opportunity. It's important we deliver a good solution for London overall.”
Waste services
“We're not in the business of mass burn incineration,” he said, adding that, while the reference project detailed in the authority's outline business case had featured mechanical biological treatment, this was a cover-all term for around 50 different technological approaches.
In particular, he said that the contract would be focused on “producing a dry fuel that could be moved around or stored. We're trying to produce a material type that has the form of a fuel rather than waste.”
Transport
Mr Judson explained that the authority would prefer to be able to transport the SRF produced by the process by rail or water, but stressed that the greatest carbon savings would come from how the fuel was actually used.
“We're driven by a desire to see a smart carbon solution,” he said. “The transport solution would ideally be rail or water but it's more about the efficiency of the energy generation process.
“Part of the evaluation method is that the efficiency of the solution on CHP is far more important than the transport aspect, even if you have rail or water. We will look at the overall carbon profile.”
The authority's reference project was also based on the SRF being used in a single facility to produce energy, but Mr Judson stressed that there was considerable flexibility here as well, both in terms of it being used in one or more facilities, and in terms of the final use for the energy.
“Generally speaking, the industries we're talking about are looking for major energy supply, but for district heating the best prospect is for regeneration projects and commercial developments off the back of that,” he said, adding that decentralised energy – energy being generated and used locally – was also an option.
Bids
Breaking down the criteria that will be used in the assessment of bids, Mr Judson explained that for the 40% of marks associated with technology and deliverability, energy efficiency and the potential of the fuel use solution to deliver benefits such as ROCs would have a major part to play in the assessment of a bid.
Of the remaining marks, 40% will be associated with costs and finance and 20% with legal and workforce issues, he added.
Greater Manchester
With the NLWA procurement beginning against the backdrop of the April 2009 signing of the Greater Manchester waste PFI (see letsrecycle.com story) and subsequent legal challenge from reserve bidder SITA (see letsrecycle.com story), Mr Judson said: “We've drawn a number of lessons from Greater Manchester.”
And, in terms of the legal challenge which was begun by SITA, Mr Judson emphasised the fact that the NLWA project was being let under a competitive dialogue process, rather than the negotiated process used by the GMWDA.
He claimed that this would ensure a “short time between the selection of preferred bidder and financial close”, and also “effectively shuts the door” on changes being made to bids once a preferred bidder has been appointed – the issue which prompted SITA's legal challenge in Greater Manchester.
He noted: “The world of waste procurements is more litigious than it used to be, and it's quite right and proper that local authorities look carefully at the procedures that they run”, adding: “I have got potentially a £4 billion contract and you'd expect me to be careful.”
However, Mr Judson also said that he hoped to deliver the contract within the timetable the authority had set, explaining: “We have a 29 month procurement timetable which will be one of the quickest in the waste industry. We're wanting to drive it quickly for bidders and ourselves, but also taking care.”
For the waste services side of the project, Mr Judson expects three bidders to be involved at the “front end of the serious bidding process”, but he explained that the situation would be different with the fuel use part of the deal.
“Fuel use is a more wide-ranging proposition,” he said. “We're actually out there stimulating market interest, we'll have double figures of people expressing an interest, four to six at outline solution.”
LondonWaste
On the future of LondonWaste, which currently carries out the NLWA's waste disposal functions and – since it acquired SITA UK's 50% stake in November 2009 (see letsrecycle.com story) – is now fully owned by the Authority, Mr Judson said it was “minded” to sell it to the successful bidder for the waste services deal.
“It makes a lot of sense as a procurement strategy approach,” he said, but added that the authority would need to ensure it got value for money for the business, which includes an incinerator and in-vessel composting facility at Edmonton.
However, with the waste services contract expected to be signed by April 2016, and the Edmonton incinerator's lifetime set to run until 2020, he noted: “There's quite a significant business opportunity there.”
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