The contract would commence in October 2006, covering all aspects of waste management including collections for the 250,000 residents, recycling, waste education and disposal.
Mike Green, procurement manager at the council, said: “We are at a relatively early stage. At the moment we are looking at the options of treatment we would want.”
He told letsrecycle.com that Southwark is considering various financial options for the contract including PFI (Private Finance Initiative) and PPP (Public Private Partnership). Mr Green said: “At the moment, although we think we are going for PFI we are still exploring the procurement route so it could be PPP.”
But PFI seems to be the preferable and most likely option to be taken by the council, he added. “The access to PFI credits would mean additional money up front,” he said, “A decision on this should be made by members in April.”
In order to qualify for PFI support, Southwark will have to include challenging recycling tar gets in its new contract. In 2002-03 just 4.7% of the 107,772 tonnes of household waste was recycled with the remainder going to the SELCHP incinerator or landfill. If the council is successful in a bid to DEFRA, the contract could be London's first joint collection and disposal PFI contract.
Mr Green said that the council is considering what kind of features will be included in the contract. He explained that councillors are to consider 14 technologies which will be narrowed down to four for further analysis. The final one which is chosen will be included in a business case to be sent to DEFRA for consideration for PFI credits in June.
Because the council has not yet decided which option to follow, the number of PFI credits it would apply for is still uncertain.
PriceWaterhouseCoopers, Entec and Eversheds have been appointed by the council in financial, technical and legal advisory roles. Mr Grimes of Eversheds said: “We are excited to be involved in this challenging project and look forward to working with the Southwark team in one of London's fastest developing and vibrant boroughs.”
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