£3.8bn waste PFI deal sealed
THE long awaited Greater Manchester Waste Private Finance Initiative, worth £3.8bn and described as the largest PFI deal of its kind in Europe, has finally completed.
The PFI project, which has taken more than two years of negotiations, will create more than 5,000 jobs in the region.
It means that the Greater Manchester Waste Disposal Authority (GMWDA) will divert more than 75% of the 1.3 million tonnes of waste from Greater Manchester’s 973,000 households away from landfill.
Viridor will be working jointly with John Laing on the 25-year contract, worth £3.8bn to the companies, to deliver the waste services to GMWDA. The deal will trigger a £640m construction programme to provide a network of waste recycling facilities in the Greater Manchester area over the next five years.
Under the contract, Viridor Laing will use a range of waste treatment technologies, including mechanical biological treatment with anaerobic digestion and a materials recovery facility. A network of 25 household waste recycling centres across Greater Manchester will also be upgraded.
Chorley-based TEG said this morning it had secrued a £38m contract to build four composting plants to handle 175,000 tonnes of food and green waste a year as part of the strategy. The four sites will be in Rochdale, Bredbury, Bolton and Trafford Park.
Viridor Laing plans to increase its permanent workforce by another 116 staff once the facilities are up and running. Greater Manchester Waste in Bolton, which is owned and controlled by GMWDA, will also take on another 620 staff.
Waste that cannot be recycled will be processed into a fuel for use by a Combined Heat and Power plant at Runcorn operated by chemicals group Ineos Chlor, which will handle 375,000 tonnes a year once constructed.
Planning permission has already been granted for 20 out of 23 project sites, including the first site in Runcorn, with construction expected to take five years.
The contract will increase costs householders by £1 per week but GMWDA said this compares favourably with the cost of a “do nothing, build nothing” option which would cost an extra £2 a week, mostly in Landfill Tax and penalties.
Councillor Neil Swannick, chair of the GMWDA and lead Labour member, said: “I am delighted that we have at last signed the contract with Viridor Laing. Greater Manchester’s waste management solution is, I believe, the best for the environment and the local economy: saving natural resources, generating green electricity and creating jobs.”
Mike Hellings, managing director at Viridor, said: “The Viridor Laing consortium will work hard to deliver the new and upgraded treatment facilities creating world class infrastructure, and lasting change and benefits in the years to come. At Viridor we look forward to working with our new colleagues and to delivering high levels of recycling, recovery and best value waste services to the Greater Manchester residents.”
Bank of Ireland, Lloyds TSB, BBVA and SMBC are the commercial banks lending to the project, along with the European Investment Bank.
Edward Pysden of Eversheds represented GMWDA in the deal, while Pinsent Masons represented both Viridor and John Laing, and Ashurst represented Ineos Cholr.
