The Greater Manchester Waste Disposal Authority (GMWDA) is ‘not satisfied’ with its current PFI waste contract, and is seeking ‘significant savings’ through the deal, a contractor has claimed.
GMWDA – which describes itself as England’s largest waste disposal authority – is tied into a long-term waste contract with Viridor Laing, signed in 2009, and worth an estimated £3.2 billion over the course of its 25-year lifespan.
Under the terms of the deal, Viridor Laing – a consortium of the waste and resources firm Viridor and the construction group John Laing Infrastructure – handles an estimated 1.1 million tonnes per year of waste, produced by a population of around 2.3 million.
The contract involves the development and operation of a total of 42 facilities for the management of waste from Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside and Trafford councils across the Greater Manchester area.
This month, John Laing Group Plc – the parent company of John Laing Infrastructure – noted in a trading update that the Authority is ‘not satisfied’ with the current status of the contract, and is seeking ‘significant’ savings through the deal.
The pre-close trading update, published on 9 December, said: “The Greater Manchester Waste Disposal Authority (“GMWDA”) has indicated that it is not satisfied with the current status of the VL Co project and it continues to seek significant cost savings and efficiencies.
“The process by which these issues will be resolved is currently unclear to the project company, which continues to work with GMWDA to explore options.”
Responding to the comments, a statement issued by the GMWDA said that its councils are facing ‘significant financial challenges’ and confirmed that it is working in partnership with its contractors to ‘respond accordingly’.
It said: “Since 2009 Greater Manchester Waste Disposal Authority, Viridor Laing (Greater Manchester) Ltd, Viridor and John Laing have been working together to transform waste across the North West of England.
“Greater Manchester is the UK’s largest ever combined waste and energy project serving 2.2 million people and handling in excess of 1 million tonnes of material per annum. The contract has been highly successful, achieving 89% landfill diversion (80% landfilling when contract was signed) and boosting recycling from 32% to 44%.
“The parties recognise the significant financial challenges faced by our nine partner councils as a consequence of enhanced and prolonged austerity. This is a complex process and all parties are working together to respond accordingly.”
The overall cost of the GMWDA contract has previously been under intense scrutiny after the then Communities Secretary Eric Pickles described it as a ‘shoddy deal’ for the local authorities involved (see letsrecycle.com story).
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Source: letsrecycle.com Waste Managment