Three to fight it out for North London waste deal

Just three bidders have been left to fight it out for a major waste management contract being let on behalf of seven London boroughs after the North London Waste Authority yesterday (April 7) narrowed the shortlist for the deal.

The contract is focused on the development of waste treatment facilities that will produce a solid recovered fuel. While the procurement is technology neutral, the development of two mechanical biological treatment facilities has been mooted as a possible option.

The three bidders who will now be asked to develop detailed solutions for the contract are:

A joint bid between waste management company SITA UK and private equity firm Catalyst Lend Lease;
A consortium of Swedish engineering firm Skanska and Spanish waste management firm FCC
Waste company Veolia ES Aurora Ltd.

This means the other two bidders to be named on a shortlist of contenders in February 2011, Biffa Waste Services and an Urbaser consortium involving Shanks and Balfour Beatty (see letsrecycle.com story), are no longer in the running for the 30-year contract.

The deal represents one of two elements of the Authoritys long-term waste management plans, which are being procured in deals worth an estimated 4 billion in total.

A five bidder shortlist for generating energy from the solid recovered fuel was also named in February 2011 and the North London Waste Authority (NLWA) yesterday said it expects to make an announcement on this shortly.

PFI funding

Commenting on yesterdays progress with the procurement, the chair of the NLWA, councillor Clyde Loakes, labelled it an important step forward for the project, particularly after the set back it received in October 2010, when Defra removed its PFI funding for the project (see letsrecycle.com story).

The Authority had suggested it would launch a judicial review over that decision, but has since decided not to. It is yet to reveal the alternative sources of funding it will use as an alternative to the PFI support.

Cllr Loakes added: We are very pleased with the excellent market response to our procurement. The outline solutions we have received demonstrate good prospects of meeting our recycling ambitions, and diverting waste from landfill, at a lower cost than we had expected. This is good news for the council taxpayers of North London.

The NLWA now plans to work with the three remaining bidders to identify the most economically advantageous tender with the aim of naming a preferred bidder in 2012 and reaching financial close on the contract in March 2013.

Sites

Some aspects of the authoritys long-term waste treatment plans have been vocally criticised by local residents, in particular the potential for it to use a former sewage works site at Pinkham Way in Barnet as the potential location for some of the infrastructure.

Campaign groups have raised concerns over the potential development of an incinerator at the site, and the associated noise pollution and health effects, although the Authority has stressed that the planning application being developed for the site does not include incineration.