The procurement of one of the largest local authority waste management contracts in Northern Ireland has today (March 2) been thrown into focus after SITA UK one of just two remaining bidders for the arc21 deal opted to withdraw from the shortlist.
The announcement leaves a joint bid from Irish firm Greenstar Holdings and utilities giant E.ON Energy as the only contender for the waste management deal, which is understood to be worth between 200 million and 500 million.
arc21, which represents 11 Northern Irish local authorities and is responsible for around 534,000 tonnes of waste produced in the country each year, is said to be in deep discussions with the Northern Irish executive over how to proceed with the procurement.
Speaking to letsrecycle.com, a spokesman for arc21 said that the withdrawal of SITA UK did not hand preferred bidder status by default to Greenstar and E.ON, explaining that further scrutiny of the Greenstar/E.ON bid would still be required.
He said: The stage we are at, both SITA and the Greenstar [and E.ON] bids are still in dialogue discussions, so we obviously have to test what they, Greenstar and E.ON, are offering.
There are still things there we have to decide. The project is on course to be delivered and a preferred bidder will be announced early next year and we are currently deciding what is the best way to react to SITAs withdrawal. This is something we are currently talking to central government about.
The spokesman did not rule out the possibility that bidders previously eliminated from the procurement process could be offered the opportunity to reapply, however, he said that is one of things that arc21 will be talking to central government about.
Withdrawal
SITA UK issued a statement today regarding the withdrawal that said requirements surrounding the bid and also a review of the companys current commitments had led to the decision to drop-out of the arc21 procurement process.
David Palmer-Jones, chief executive of SITA UK (pictured above right), said: “SITA UK has been fully engaged in a comprehensive due diligence process for the arc21 PFI contract and having reviewed our current commitments and the requirements surrounding the bid, we have taken the decision to withdraw from the procurement process.
“This decision has not been taken lightly and we would like to underline our commitment to our continued involvement in PFI procurement projects in the UK. SITA UK wishes the arc21 team every success with this continued procurement.”
SITA UKs announcement marks the second major withdrawal from the shortlist of bidders, as Veolia Environmental Services Aurora chose to drop out of the three-bidder list in March 2010 as part of plans to focus its work in Ireland more on hazardous waste management.
arc21 halved its shortlist from six to three bids in July 2009. This saw the partnership drop bids from: Shanks and US energy-from-waste specialist Wheelabrator; a joint bid by Irish waste management company Invader and equity investor John Laing; and, American incinerator giant Covanta Energy.
In acknowledging the withdrawal, John Quinn, chief executive of arc21, said: We are obviously disappointed that SITA UK has taken the decision to withdraw from the competition and thank them for their best wishes. We will continue to progress our project in a considered and measured way.
Contract
According to the contract advert published in the Official Journal of the European Union, the waste management deal is set to run for between 20 and 40 years and centre on the development of a range of waste treatment technologies.
A successful bidder for the contract will be expected to design, build, operate, maintain and/or finance two mechanical biological treatment facilities with the joint capacity to process 400,000 tonnes of municipal waste-a-year, as well as an energy-from-waste plant with a capacity of up to 370,000 tonnes a year.
While they will be focused on processing municipal waste, all three plants will have the potential to take commercial and industrial waste, subject to agreement with the partnership, including up to 180,000 tonnes of the EfW facility’s capacity.
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