South Tyne and Wear cuts PFI shortlist to three

Reducing, reusing and recycling as much of our rubbish as we can is our priority but there will still be rubbish that remains and we have to find more sustainable ways of handling it

 
John Robinson, leader of the Partnership

The consortium – which is comprised of Gateshead council, Sunderland city council and South Tyneside council – shortened the list from eight initial bidders for the deal, which is intended to help tackle the 200,000 tonnes of residual household waste arising annually in the region and to help boost all three councils' recycling rates to 50% by 2020.

The remaining bidders for the contract, which is thought to be worth up to £1.3 billion, are: German energy-from-waste specialist MVV Umwelt GmbH; waste management firm SITA UK Ltd; and, utilities firm United Utilities.

All three will now be asked to work up detailed proposals for further consideration by the partnership.

John Robinson, group director local environmental services at Gateshead council and leader of the Partnership, said: “Landfills are not good for the environment and the cost of landfill is rising, which ultimately comes out of our residents' Council Tax so we have to find alternative ways of managing waste.”

“Reducing, reusing and recycling as much of our rubbish as we can is our priority but there will still be rubbish that remains and we have to find more sustainable ways of handling it,” he added.

All initial bids, which proposed how and where the waste could be treated and what resources could be recovered from it, were carefully evaluated. The three shortlisted companies submitted bids that scored best against strict criteria including sustainability, performance, deliverability and environmental considerations.

Today's announcement means that the following companies who were named in the initial list of bidders are no longer in the running for the deal: Spanish waste treatment company Urbaser SA; waste and recycling company Veolia Environmental Services; the waste subsidiary of defence firm VT Group – VT Environmental; technology firm Graphite Resources; and Milton-Keynes based waste management company Shanks Group (see letsrecycle.com story).

Development

The South Tyne and Wear consortium has said that it is open to suggestions on the use of treatment technologies, but used energy-from-waste with combined heat and power (CHP) and mechanical biological treatment (MBT) with aerobic digestion as its reference technology in its successful bid for £73.5 million in PFI funding credits (see letsrecycle.com story).

A vacant industrial site that may be suitable for a waste treatment facility has been identified in Felling, Gateshead, and is available as an option to all companies bidding for the contract.
However, this site may not be used; bidders could propose to use another site or use an existing treatment facility. Any development on this site will be subject to a full public consultation as part of the planning process.

The consortium has remained tight-lipped with regards to the overall value of the contract, however, the Outline Business Case for its PFI credits bid was based on reference technology valued at £900,000 million to £1.3 billion.

The Partnership expects to announce a preferred bidder for the contract in summer 2010, with a waste treatment facility hoped to be up-and-running by 2014.

System

In addition to cutting the shortlist for its residual waste treatment contract, the Partnership has also announced that a “raft of other new waste contracts” designed to divert waste from landfill are being developed as part of its overall plan to improve waste and recycling in the region.

These include: a deal to develop a Materials Recycling Facility (MRF); provision of a green waste service; and residual waste transfer and disposal. Other contracts set to be considered in the longer term are street cleansing, bulky waste and, possibly, food collection.

A tender exercise to secure a MRF for dry recyclables is already underway, and the Partnership has said that several companies have expressed an interest following an Official Journal of European Union notice published in March.

The three councils are also likely to jointly acquire new waste collection vehicles and wheeled bins and a new kerbside system is set to be introduced from April next year. The current black boxes will be phased out and replaced by one blue wheeled bin that will allow residents to recycle plastic and cardboard, in addition to paper, glass and cans which they can currently recycle.