The county council has been tendering for a waste management contract with the support of 34 million in Private Finance Initiative credits from the government (see letsrecycle.com story). The process had come down to three possible contractors – Shanks, SITA and SULO subsidiary South East Northumberland Recycling (SENREC).
”We may have to look at an alternative option and draw a close to the PFI process “
– Paul Jones, Northumberland county council
But Northumberland county council has told letsrecycle.com that both Shanks and SENREC have now pulled out, leaving SITA as the only company to have tabled a bid.
Paul Jones, waste manager at the council, said this made it difficult to demonstrate that the proposal on offer is the best available option for the contract.
Mr Jones said: “What we have to do now is consider whether or not SITA's offer is the best available option. If not we may have to look at an alternative option and draw a close to the PFI process early.”
SITA
SITA has been seen as the favourite for the contract because of its strong presence in the region. The company has several landfill sites in the area. A spokeswoman for SITA said that the company was unable to comment.
Shanks
However, in the light of the absence of competition for the contract, Northumberland will now be talking to both Department for Environment, Food and Rural Affairs and SITA before deciding on the future for the contract. Mr Jones said that a report is likely to go to councillors in October.
Shanks was the first company to drop out of the running, preferring to focus its energies bidding for a smaller number of PFI contracts. Mr Jones explained: “Shanks withdrew from the contract early on, sighting overstretched resources. The company is bidding for several contracts and they had to drop the pursuit of one, the one turned out to be us.”
SENREC
SENREC, which is a subsidiary of German company SULO, pulled out of the contract at “the eleventh hour”, the council said.
According to Harald Kloeder, managing director at SENREC, SULO has decided to concentrate on the German market rather than its ventures in the UK, such as SENREC.
Mr Kloeder said: “There is no problem with Northumberland, the problem has come from above and I am very sorry. The company wants to concentrate on other markets and they do not feel they can follow through with this purchase.”
Mr Kloeder said part of the problem was with the future plans of SULO owners Blackstone and APAX.
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He said: “It is likely that the companies above will want to sell off SENREC in five to seven years. I don’t think they will want to try and explain that the company has a 25-year contract signed up that the buying company will have to take on. It would also involve a lot of early investment which, if SENREC is sold in a few years time, the parent companies won't see a return on.”
SENREC's managing director explained that if Northumberland decided to go in a different direction to a long term PFI, the company would look once again to be involved with a tendering process.
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