Waste Disposal in Manchester

THIS week, it was reported that waste handling in Greater Manchester is to be taken back into public ownership.    The Greater Manchester Waste Disposal Authority (GMWDA) has told Viridor, and its joint venture partner John Laing, that it is terminating the region’s long-term waste contract.

On the 4th, May, Robin Latchem, the editor of 'Material Recycling World' [MRW], wrote:

'It was one of the worst-kept secrets in the sector that the GMWDA and Viridor-Laing partnership was on the rocks.'

Back in February, the Greater Manchester Authority raised concerns with Viridor Laing over the progress being made on these works, including 'significant rusting issues' in the mechanical and biological treatment plant tanks and the in-vessel composting facilities.

The authority’s relations with Viridor Laing over the 25-year, £3.8bn private finance initiative deal became even more frayed in recent months, as Costain continued with repairs to some of the 42 facilities.

At that time, in February, it was reported that a trading update from parent company Pennon showed that the construction contractor Costain was making modifications at some facilities servicing the 25-year, £3.8bn private finance initiative (PFI) contract with Greater Manchester Waste Disposal Authority (GMWDA).

The Greater Manchester Authority approved the termination of the contract at a meeting last week. This comes several months after the waste authority revealed that it was ‘not satisfied’ with the status of the contract, and had been seeking ‘significant savings’ through the deal (see letsrecycle.com story).

The Pennon Group – the parent company of Viridor – has noted that there are provisions in the PFI contract for compensation to be paid to Viridor and John Laing on termination.  And, in a statement issued on the 2nd, May, Pennon claimed that the Authority’s exit from the contract is due to ‘financial challenges’ caused by prolonged austerity.

These concerns prompted the authority to decided to exit the PFI deal.

The company has stated:  'Discussions and negotiations are now expected to progress over the coming weeks as we work with GMWDA to ascertain the implications. There are provisions in the PFI Contract for compensation to be paid to Viridor and John Laing on termination.'

The contract involved the development and operation of a total of 42 facilities – totalling more than £600 million – for the management of waste from Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside and Trafford councils across the Greater Manchester area.

The decision to bring an end to the contract comes eight years after it was agreed. GMWDA – which described itself as England’s largest waste disposal authority – signed the long-term waste contract with Viridor Laing in 2009 at a value of £3.2 billion over the course of its 25-year lifespan.

And with this termination of the Greater Manchester Waste Disposal's contract one pundit commented;
'This looks like the beginning of the end for long term all encompassing local authority contracts that presumably lack flexibility to cope with the world as it changes fast.'