Hull city council has approved plans to appoint a long term contractor to process the city’s residual waste after the collapse of its contract with Impetus Waste Management in November 2016.
Impetus had signed a 10-year contract with the local authority in 2015 to process the city’s residual waste into refuse derived fuel for energy recovery.
However, the contract collapsed in November last year when Impetus – formally trading as Green North East Trading Bidco Limited – entered administration, resulting in the closure of two processing sites at Teesside and Leeds, and the loss of 73 jobs (see letsrecycle.com story).
Impetus had intended to supply RDF to fuel Air Products’ large-scale Tees Valley gasification plant under a long-term contract with the company, but Air Products cancelled the project in early 2016 due to operational challenges.
Following the cancellation of the project, Impetus instead focussed its strategy on the export of its RDF product to energy from waste plants in Europe, but the company had sustained losses according to administrator EY, and was forced to close.
As a result, Hull is seeking to award an interim contract for the processing of the city’s estimated 48,000 tonnes of residual waste generated per year, whilst a longer term deal, lasting an initial seven-years – with an option for up to five additional years is drawn up.
In February, the council hosted a ‘market sounding’ event to scope interested from potential bidders – with 12 companies having expressed an interest in bidding for the long term contract to handle waste from the authority.
These included: Amey, Andusia, Associated Waste Management, Biowise, Energy Works, Geminor, FCC, J&B Recycling, Suez, Tiru and Transwaste.
At a meeting of the council’s cabinet on Monday (24 April) councillors agreed to press ahead with the procurement of the long-term contract, which is expected to be worth up to £56 million over its lifetime, and would likely start in April 2018.
In a report on the potential options for the future of the contract, council officers noted: “Based on the discussions at the market sounding meetings the proposed contract length of 7 plus 3 plus 2 years was acceptable to the majority of suppliers. The contract length was prohibitively short from one potential supplier but the overall response gave confidence that a procurement exercise on the basis proposed would generate significant competition with a variety of solutions including local, regional, national and European facilities.”
Commenting in the report, Councillor Martin Mancey, the council’s cabinet member for energy, noted: “It is disappointing that the previous contractor failed to deliver the contract and went into administration. The council has no realistic option but to adopt the recommendations in this report.”
A formal tender process is expected to commence in May.
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Source: letsrecycle.com Waste Managment