Consortium signs 30-year waste contract with MWDA
Artist's impression of SITA's Teeside EfW plant.
A consortium led by SITA UK has signed a 30-year Public Private Partnership (PPP) with the Merseyside Waste Disposal Authority (MWDA).
Announced as preferred bidder in April 2013, the consortium comprising SITA UK, Sembcorp Utilities UK, and the ITOCHU Corporation, will process 420,000 tonnes (92 per cent) of residual waste collected from the metropolitan boroughs of the MWDA (Liverpool, Knowsley, St Helens and Sefton) and the Unitary Authority of Halton Borough Council, at its new energy recovery plant in Wilton, Teesside.
The project has been somewhat controversial, with the Mayor of Liverrpool, Joe Anderson, stating that had the authority chosen Covanta Energy’s bid, which included building an incinerator at Ince Park at nearby Ellesmere Port, it would have created more job opportunities for local people and been ‘more environmentally friendly and more cost effective’.
Indeed, earlier this year, rival EfW company Covanta UK, the UK arm of American firm Covanta, lodged a legal challenge against the Merseyside Recycling and Waste Authority (MRWA) – which goes under the statutory name of the MWDA – over its decision to award preferred bidder status to the SITA Sembcorp consortium.
The legal challenge submitted by Covanta’s lawyers to the High Court in Leeds outlined concerns with Merseyside Recycling Waste Authority’s decision process, saying it was ‘flawed’ and did not take into consideration the economic savings of the Covanta bid.
However, Resource has learned that the MWDA settled with Covanta prior to the SITA deal being closed earlier this week.
SITA consortium plant details
The 49-megawatt energy recovery centre, which is to be built in Teesside, will reportedly generate enough electricity to power 60,000 homes each year.
Subject to local demand, the £250 million plant will also be able to provide heat to nearby businesses, with the capacity to deliver 190 tonnes of steam per hour via a district heating system.
The project is expected to create 75 permanent jobs, in addition to more than 100 jobs during the construction phase.
David Palmer-Jones, Chief Executive Officer of SITA UK said: “The signing of this contract is great news for Merseyside and Halton, and for the environment, because it means we will now be able to begin building the necessary infrastructure to put this waste material to good use – rather than sending it to landfill.
“Agreeing this contract is also great news for local employment near our sites, because we expect to create around 75 permanent jobs and employ hundreds more during the construction process.”
SITA UK has estimated that over its duration, the contract is worth up to £1.2 billion in municipal revenue and approximately £1.8 billion in total revenue - which includes the management of third party waste and the sale of electricity to the National Grid.
Councillor Graham Morgan, Chairperson of Merseyside Waste Disposal Authority, said: "Signing this contract today puts in place a sustainable waste management solution for the next 30 years. The solution we have selected for Merseyside and Halton is the best for the environment - saving natural resources, generating green electricity and providing value for money for Merseyside and Halton Council Tax payers."
Carl Beer, Chief Executive of Merseyside Waste Disposal Authority, added: "We are looking forward to working in partnership with SITA UK and other partners to develop modern and efficient facilities that apply the highest environmental standards in tackling the region's waste issues. Appointing the right contractors, with the right level of expertise, has been a critical part of that process."
GIB to invest £20 million in plant
Following on from the signing of the contract, the Green Investment Bank (GIB) announced it will invest £20 million of the senior debt alongside Banco Bilbao Vizcaya Argentaria, S.A (London Branch), Bank of Tokyo-Mitsubishi UFJ Ltd, Credit Agricole Corporate & Investment Bank, Mizuho Bank, Sumitomo Mitsui Banking Corporation, and Unicredit Bank AG (London Branch).
Equity will be provided by SITA UK Limited, Sembcorp Utilities Limited and Japan’s ITOCHU Corporation (on behalf of I-Environment Investments Ltd).
This marks the latest energy-from-waste investment the GIB has made in recent months, as it announced earlier in December that it will invest £20 million in West London Waste Authority’s (WLWA) new £244 million energy-from-waste (EfW) facility.
Edward Northam, Head of Investment Banking, UK Green Investment Bank, said: “This is our third significant investment in the waste sector in less than six weeks, delivering on our strategy to finance long term energy from waste projects.
“During the lifetime of our investment, we expect the Mersey facility to generate enough electricity to power thousands of homes, from many millions of tonnes of household waste that would otherwise go to landfill.”
Business Secretary Vince Cable, added: "This new plant will mean less of our household waste going to landfill and less reliance on fossil fuels for energy generation. It will also create 75 permanent jobs and hundreds more during the construction phase. It is precisely the sort of project which we created the Green Investment Bank to support, as part of this country's transition to a green economy."
The new £250 million energy recovery centre project includes building all the necessary energy from waste infrastructure, including two rail interchanges to transport waste from Knowsley to Teeside.
Read more about the Green Investment Bank or the MWDA waste contract.
