SITA UK and Suffolk county council have reached financial close on the local authority's £1 billion PFI-funded residual waste treatment contract, which is set involve the waste management company developing a large-scale energy-from-waste incinerator near Ipswich.
The signing of the 25-year deal, which was announced today (October 6), comes less than five months after SITA UK was named as preferred bidder for the contract ahead of Veolia ES Aurora (see letsrecycle.com story).
Under the deal, SITA UK's French parent company, Suez Environnement will provide around £185 million capital investment to build the energy-from-waste facility at Great Blakenham. The plant is expected to have the capacity to treat up to 269,000 tonnes of residual waste a year.
SITA UK's chief executive, David Palmer-Jones, highlighted the short time between being named as preferred bidder and financial close, stating: “We are delighted to sign this important contract with Suffolk County Council just over four months since we were selected as the preferred bidder.
“Since then, we have been out and about, consulting with residents over our plans to develop an energy-from-waste facility at Great Blakenham, near Ipswich, and we are on course to submit a planning application in December 2010.”
His sentiments were echoed by Jean-Louis Chaussade, chief executive of Suez Environnement, who added: “SITA UK's approach to procurement means that we deliver on our commitments, which is why we have been able to reach financial close on this contract so quickly.”
If planning permission is secured next year, SITA expects to have the energy-from-waste facility up and running by late 2014, with the £1 billion value of the contract being comprised of total revenues from the council, third party waste and the sale of electricity.
Council savings
Suffolk county council estimates that the contract will save it £350 million of additional expenditure over the 25-year period, as well as generating enough electricity to power over 30,000 homes and saving the equivalent of 75,000 tonnes of CO2 a year.
The potential benefits for the council were highlighted by Lisa Chambers, portfolio holder for waste at the local authority, who said: “The signing of this contract takes us one step closer to that solution and represents tremendous value for money for Suffolk, which in the current economic climate is very good news.”
Today's announcement represents the second major PFI success for SITA UK in the last month, after a consortium led by the company was named as preferred bidder for the three-council South Tyne and Wear Waste Partnership's long-term contract four weeks ago (see letsrecycle.com story).
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