Viridor in line for £850m Cheshire waste deal

The Taunton-based company today (November 16) welcomed the news that it had been endorsed as provisional preferred bidder for the 25-year deal, which will involve it developing infrastructure to treat an estimated 200,000 tonnes of residual waste a year.

Viridor, which already holds the Greater Manchester Waste Disposal Authority’s £4 billion waste contract as part of the Viridor Laing consortium, was chosen for the Cheshire contract ahead of a bid from Resources Recovery Solutions, a joint-bid from United Utilities and services company Interserve.

It plans for the deal involve it building a mechanical biological treatment facility at Lostock Gralam, in Northwich, producing a solid recovered fuel to be sent to the energy-from-waste plant Viridor is building in Runcorn, Cheshire, in partnership with chemicals firm Ineos CHLOR.

But, the procurement process has been hit by last month’s announcement that the £100 million of PFI money earmarked to support the project was to be withdrawn (see letsrecycle.com story).

And, Viridor is still awaiting planning approval for the Lostock Gralam proposals. The company submitted a scaled-down revised application for the MBT facility in August 2010 (see letsrecycle.com story), after it’s initial application for the facility was rejected by Cheshire West and Chester council in June 2010 (see letsrecycle.com story).

The revised application, which is based around a 200,000 tonne-a-year operating capacity, is set to be considered by the council’s strategic planning committee later this week (November 18). The 130,000 tonnes-a-year of SRF produced by the MBT process would fill a significant part of the Ineos CHLOR EfW’s first phase capacity (see letsrecycle.com story).

Despite this uncertainty, Viridor said today in a statement that it was “working closely with the Cheshire authorities to ensure that its service proposals for the effective management of household waste offer a value for money and practicable solution”

For their part, the councils have said they remain committed to exploring all the options available to them, despite the withdrawal of PFI funding, highlighting the five years and £4 million spent reaching this stage in the contract procurement.

Councillor Lynn Riley, community and environment executive member at Cheshire West and Chester council, said: “It is only commonsense that we should talk to the company that had been chosen after such a careful selection process, to see whether there is the capacity within the current procurement to help overcome the funding shortfall.”

Defra

Officials from both Cheshire East and Cheshire West and Chester councils have already met Defra officials to discuss the reasons for the PFI funding being withdrawal, and they said they were now awaiting the department’s release of the methodology used to make the funding decision – which is expected this month.

But, Cllr Riley added: “We cannot at this stage rule out a formal challenge against the decision to withdraw support for this critically important scheme.”

A spokesman for Cheshire West and Chester council today confirmed that the councils were still “considering their options”, and looking to secure meetings with Defra officials.