South London councils narrow PFI shortlist to three

Three of the UK's biggest waste management companies have today (September 28) been named as the remaining contenders for a £990 million PFI-backed contract to treat residual household waste from four South West London councils.

The South London Waste Partnership, which brings together Croydon, Kingston, Merton and Sutton councils, has dropped the Resources From Waste consortium led by United Utilities from the four bidder shortlist for the 25-year deal that was named in March 2010 (see letsrecycle.com story).

The three remaining bidders are proposing a range of innovative waste treatment solutions

 
Cormac Stokes, South London Waste Partnership

The announcement means Waste Recycling Group, Veolia and Viridor are now left in the running for the deal, which will involve the development of waste treatment infrastructure to deal with an estimated 200,000 tonnes of residual waste a year.

Cormac Stokes, chair of the South London Waste Partnership management group, said: “The three remaining bidders are proposing a range of innovative waste treatment solutions. Further confidential negotiations are required between the Partnership's Procurement Team and the bidders before further de-selection of bids can take place.”

All three contenders will now be invited to refine their proposals, under the next stage of the competitive dialogue process the four-council partnership is using to procure the deal, before the councils' joint waste committee meets in February 2011 to agree which bids should proceed to the next stage.

Its aim is then to award the contract in autumn 2011 and to have the treatment facilities up-and-running in 2014/15.

Technology

The councils have stressed that details of the technology the remaining bidders are proposing must remain confidential during the procurement, and have said they remain technology neutral.

However, they have made it clear that any bid involving thermal treatment – such as incineration – must recover energy and look to utilise heat from the process locally, adding that all four boroughs are “firmly against poor-performing, outdated technologies such as old-fashioned mass burn incineration”.

The Partnership received an initial allocation of PFI credits of £112.9 million in March 2009 (see letsrecycle.com story), based on a reference technology of building two 106,500 tonne-a-year capacity mechanical biological treatment facilities, and one energy-from-waste plant with combined heat and power, also with a 106,500 tonne-a-year capacity.

Contracts

The deal represents the last of four waste contracts procured by the partnership in the past two years, after Viridor was awarded a transfer, transportation and landfill disposal deal in 2008 (see letsrecycle.com story), a contract for managing seven household waste recycling centres was awarded to EWC in 2008, and a materials sorting and organic waste treatment deal was awarded to Viridor in 2008.

Documents from a meeting of the Partnership held earlier this month (September 16) reveal that it is currently contracted to send 10,000 tonnes of waste in 2010/11 to Viridor and Grundon's recently-commissioned Lakeside energy-from-waste incinerator at Colnbrook, in Berkshire.

The document states: “The Partnership during the period 1 April to 31 July 2010 has delivered some 5,238 tonnes of household waste to the Lakeside EFW. The Partnership is on target to fulfil its contractual obligation in respect of this matter.”