Wakefield council has revealed that it expects to achieve financial close on its long-delayed 750 million waste PFI contract in mid-September 2012, five years after a preferred bidder was named.
A consortium involving waste company Shanks and engineering firm Babcock is preferred bidder for the 25-year contract, with a bid involving the development of autoclave, anaerobic digestion and materials recycling facility (MRF) technology to treat 180,000 tonnes of waste per year.
VT Group had originally been named as preferred bidder for the deal in 2007, with the contract expected to be signed by late 2010 (see letsrecycle.com story). However, problems related to the economic downturn saw the signing of the contract pushed back and VT was taken over by Babcock in July 2010.
Waste management firm Shanks was then appointed to form a partnership with Babcock to see the contract through to completion in February 2011, with Shanks set to take over delivery of the deal once the contract is signed (see letsrecycle.com story).
The deal had then been expected to reach financial close in March 2012, but according to the council, the process has been delayed due to the changes to the original preferred bidder.
A spokeswoman for Wakefield council said: The original PFI partner was taken over by another company which set the process back, but everything is now in place and we should be ready to sign the contract in September.
Finance
Waste infrastructure credits of 33 million are being provided by the government to finance the development of new facilities, while a further 95 million is being provided jointly by a funding club comprising banks Barclays, BayernLB, SMBC and UK Green Investments, the start-up team for the governments Green Investment Bank (GIB).
Under the Shanks/Babcock proposals, a new facility will be built to treat residual waste at South Kirkby, West Yorkshire using autoclave technology. The plant will produce a refuse derived fuel for processing at a multi fuel plant being built at the SSE Ferrybridge power station and a digestate for land remediation and will generate heat and power for the whole South Kirkby plant with excess power exported to the national grid.
Proposals
The South Kirkby site will include a MRF for separating dry recycled materials like paper, card, glass bottles, cans and plastics and an enclosed windrow composting plant for treating garden waste. Planning consent for the site was granted in November 2008, while initial construction work started in October 2011.
In addition to developing the new facilities, Shanks will take over the running of the councils existing Household Waste Recycling Centres (HWRCs), transfer stations and bring sites and will have responsibility for recycling and disposal of all municipal waste collected by the authority.
When completed, the Wakefield contract will be the first government PFI deal to involve autoclave technology. Wakefield council says it has undertaken a due diligence process covering all aspects of the technology, including safety, and has no concerns.
Should the contract be signed in September, it is expected that the facilities will come online by the end of 2014. For Shanks it will be a development close to another of its contracts which also have an SSE connection. Working with SSE, the company has already secured a 750 million PFI contract with the Barnsley, Doncaster and Rotherham Waste Partnership.
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