Incinerator loses waste contract
GREATER Manchester Waste Disposal Authority (GMWDA) is to terminate its contract to supply waste to be used as fuel in the Runcorn energy-from-waste (EfW) incinerator.
The decision was made at a GMWDA meeting on April 26.
A statement on incinerator operator Viridor parent company Pennon Group Ltd’s website said GMWDA had been continuing to face financial ‘challenges’ due to austerity.
Pennon said there are provisions in the private finance credit (PFI) contract between Viridor Laing (Greater Manchester) Limited and GMWDA to ensure compensation is paid to the limited company’s owners Viridor and John Laing.
The statement said Viridor has invested £72.3m in the Manchester project to date.
Their PFI contract had been due to last 25 years, with the private sector fronting the cash to set the project rolling and GMWDA paying it back.
GMWDA was supposed to have been a key supplier of fuel for the Runcorn incinerator.
A GMWDA plan published in 2012 said the authority would ● supply 325,000 tonnes of treated waste for the EfW plant, which has capacity to burn 850,000 tonnes a year, generating a maximum of 70 megawatts of electricity and up to 51 megawatts for exclusive use at the neighbouring Inovyn chemical works.
Pulling the deal could also hit Halton Council environment fund coffers, which receive 60p per tonne of rubbish burned at the plant, totalling a sum of £195,000 from the Manchester contract.
A Pennon spokeswoman said: “Diversion of waste from landfill remains ahead of contractual commitments and Viridor and its partners are keen to ensure this progress is able to continue. Viridor and its joint venture partner John Laing have been engaging with GMWDA as they have worked to consider their options.
“GMWDA has now confirmed it is seeking an exit from the Recycling & Waste Management Private Finance Initiative (PFI) Contract. This contract relates to Viridor Laing (Greater Manchester) Limited.
“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 book value of Viridor’s investment in the Greater Manchester project as at March 31, 2016, is £72.3m, of which Viridor Laing (Greater Manchester) Limited represents £36.8m and Ineos Runcorn (TPS) Limited represents £35.5m.
“Pennon continues to anticipate reporting a strong financial performance for the group at its full year results for 2016-17 on Wednesday, May 24.”
A GMWDA spokeswoman said: “The GMWDA can confirm that at the authority meeting held on Wednesday, April 26, it agreed to terminate its waste and recycling contract with Viridor Laing (Greater Manchester) Ltd.
“The decision allows for delegation for officers to progress termination.
“At this time we are unable to comment further.”