Waste chiefs dump £3bn contract 17 years early
WASTE disposal bosses have terminated a contract worth more than £3 billion – 17 years before it was due to expire.
Greater Manchester Waste Disposal Authority (GMWDA) signed the 25-year private finance initiative deal with the Viridor Laing consortium in 2009, which was expected to bring thousands of jobs to the region at new and refurbished wasteprocessing plants.
At the time it was one of the UK’s largest private finance initiative deals.
However, GMWDA have confirmed that the contract will be terminated, though it is not known when this is due to take effect.
It is understood that the organisation may have to pay compensation to the consortium, which is made up of Viridor Waste Management and John Laing, for terminating the contact early.
A spokesperson for GMWDA said: “The decision allows for delegation for officers to progress termination. At this time we are unable to comment further.”
A statement on the Pennon Group website, the parent company of Viridor Laing, says that GMWDA ‘continues to face financial challenges due to prolonged austerity’.
It says that diversion of waste from landfill ‘remains ahead of contractual commitments’ and the consortium is ‘keen to ensure this process is able to continue’.
It adds: “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 deal has seen the consortium handle around 1.3m tonnes of waste a year generated by Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside and Trafford councils and develop over 40 waste facilities at a cost of more than £600 million.
However, according to the trade press GMWDA indicated last year that it was ‘not satisfied’ with the contract and was looking to make ‘significant cost savings and efficiencies’.
Viridor has said that essential public waste and recycling services remain unaffected and its employees and union partners have been ‘fully briefed’.