GMWDA bags waste company for a pound and promises no disruption in bin collections
Wednesday 30th August 2017 @ 09:38 by Nigel P.
Business Community Greater Manchester News Tameside

Bins will continue to be collected as normal against the background of re-organisation.

 

Greater Manchester’s Waste Disposal Authority (GMWDA) has finalised the split with it’s business partner Viridor Laing from the 25 year, £3.8 billion contract, in order to make longer term savings.

As part of the deal that was finalised last Wednesday, GMWDA will aquire Viridor Laing, (Greater Manchester) for just one pound and residents are assured that the company will continue to operate bin collections for a further transitory 18 months.

Savings estimated by the authority to be at around £20 million a year have not been offset by large penalties that could have been sought by Viridor Laing in compensation for early termination of contract.

Where there is muck there is brass goes the old saying and that was certainly borne out with the signing of a £3.8 Billion deal between the Greater Manchester Waste Disposal Authority and Viridor Laing in 2009.

The PFI deal over 25 years included management and construction of waste disposal facilities across nine of the ten boroughs of Greater Manchester, Wigan is not part of the Authority.

The deal has already seen £631 million spent on various capital projects such as upgrading or building 42 waste disposal centres around the county.

These facilities include anaerobic digestionl plants that turn food waste into organic waste and gas.

It is understood that those assests built during the lifetime of the contract will remain on the balance sheet of Greater Manchester Waste Disposal Authority.

The giant incenerator at Runcorn is not included in that, but will continue to be utilised by the Authority.

However after seven years the Combined Authority representing the nine councils and the GMWDA, no longer feel they are getting value for money with a  2.5million budget overspend this year alone..

Critics of the opriginal deal said that future costings were “underestimated and wrong “which has led to the overspend.

But  despite  the reduced number of dustbin collections, recycling rates had increased ensuring 1.1 million tonnes per year of waste, produced by a population of around 2.3 million was successfully recycled.

During the lifetime of the partnership there has been a shift from 80%  land filling to only 11% and boosting recycling from 32% to 44%.

However in recent years progress has been limited and the Waste Authority has now called time on the partnership

In February GMWDA revealed it has raised concerns with Viridor Laing over the progress being made on  repair works at its waste sites.

Some sites have suffered “significant rusting issues” in the mechanical and biological treatment plant tanks and the in-vessel composting facilities.

A GMWDA report also revealed volumes of waste were now lower than expected and were no longer competitive relative to the current market.

Following the legally binding heads of terms agreed on the 23rd August, conclusion of the contract will be final on the 29th of September,2017.

We understand nine of the ten Greater Manchester councils that make up the waste authority including Tameside, will be imposing a £77 million pounds levy on waste in anticipation of increased costs.

These increases were anticipated as a result of re-organisation and in compensation for early release from the contract with Viridor Laing.

However a spokesperson for the GMWDA explained: “The £77.7m stated in our 2017/18 budget report was a one off increase in the levy charged to the district councils to pay for the waste disposal services, but offset by a corresponding decrease in Transport levy.  The net impact to GM Council taxpayers is £nil.

 That additional Levy was to cover the possible immediate impact of termination, which at that stage could not be accurately quantified.  Now that negotiations have been concluded the additional sum is not required, and this will be returned as part of the 2018/19 levy process.”

So it looks like a very good result for GMCA/GMWDA as they have been able to mitigate the short term financial  pressure by drawing on Greater Manchester’s Transport’s capital reserves.

The successful conclusion to the negotiations between GMWDA and Viridor Laing has avoided the imposition of possible penalties to the company.

That has provided a dividend to GMCA and presumably the money set aside for that eventuality will now be restored to the Transport Capital Fund and the Authorities books will be rebalanced.