Government

Norfolk County Council abandons incinerator plans

Norfolk County Council’s Cabinet has unanimously decided to abandon its King’s Lynn incinerator contract with Cory Wheelabrator.

The decision came following three and a half hours of debate at a full council meeting earlier today (7 April), which finally saw 48 councillors vote in favour of terminating the King's Lynn incinerator contract. There were 30 votes against, and one abstention.

Officers last week recommended that the council’s waste contract with the Cory Wheelabrator consortium should be abandoned on the grounds that it has failed to secure planning permission (as Secretary of State for Local Government Eric Pickles has yet to make a formal announcement on the planning status of the plant, despite 'calling in' the application in August 2012).

It was suggested that the delay was jeopardising the incinerator’s future, as 'the scheme’s value for money reduce[s] with each week’s delay as costs rise and the contract payback period is shortened'. 

The council estimated that the daily cost of the continuing delay costs the council around £140,000.

As a result of breaking its contract, the council will now need to make a payment of around £20 million to the consortium, despite previous warnings that paying this obligation could effectively bankrupt the council.

As well as paying capped compensation to Cory Wheelabrator of £20.3 million, the council will also have to pay contractor public inquiry costs of £1.6 million and exchange rate and interest rate related costs of £8.36 million, bringing the total closer to £30 million.

The Cabinet agreed today that these costs should be met through a £19 million contingency reserve built up for the purpose, £3 million from the council's 2013/14 under spend, and £8 million from general reserves, on the basis that the council 'takes immediate steps to replenish those reserves'.

Cabinet will consider the options at its meeting on 12 May.

There is no word yet on what the alternative waste disposal plans are for the council.

Planning delays are costly and can jeopardise future investment’

Speaking after the decision to abandon the contract was taken, George Nobbs, Leader of Norfolk County Council, said: "This has been about the business case, not the technology. We inherited this contract from our predecessors and tried very hard to make it work. In the end Cabinet had to make a hard-headed decision on whether to throw more good money after bad. This has been very costly to the people of Norfolk, and there are no winners.

“Mr Pickles’ point blank refusal to make a decision - and even to tell us when, if ever, he will do so - has holed this project below the water line. It’s a sad day for anybody who believes in investment in this country.

“It is becoming increasingly apparent that although Mr Pickles talks about growth and removing obstacles to investment, he is in fact the biggest obstacle himself.”

A spokesperson for the Willows Power & Recycling Centre said: “We are extremely disappointed by the decisions today, particularly as many years of hard work have gone into this project by the consortium and Norfolk County Council. We believed that the Public Inquiry would have provided a fair hearing for all parties and that a decision would be based on pure planning grounds.

“We, and the industry, have also made it clear to government that planning delays to major infrastructure projects are costly and can jeopardise future investment. The Willows project looks set to become yet another example of this delay and uncertainty. The delay to that planning decision has resulted in considerable costs to all parties at a time when public funds are already stretched.

“The fact still remains that there is no firm solution for the long-term management of Norfolk’s waste, despite considerable time and expense being devoted to a solution that was viable, deliverable and would have created hundreds of jobs.”

Incinerator background

The construction of the 250,000 tonne Willows Power and Recycling plant in Saddlebow has been a source of much contention within the county, with the borough of King’s Lynn and West Norfolk so opposed to it that it took the decision to withdraw from the county council’s waste strategy and withhold black bin waste to process it through a recycling process (read more in Resource 72).

The borough council has offered to 'work together' with the county council to find a waste management solution for the area.

Speaking after today's announcement, a spokesperson for the borough council said: “This became the only sensible outcome and Norfolk County Council have made the right decision today. Now we have a great opportunity to come together – districts, county and MPs - to find real, workable, long-term solutions to deal with waste in Norfolk and increase recycling.”

It seems unlikely that incineration will be the choice for Norfolk's future waste disposal, as incineration has been met with strong opposition locally. Indeed, when Norfolk County Council was working on the Cory Wheelabrator contract, 65,000 people voted against hosting the incinerator in the area.

The cost of building the plant was also of concern, after the Department for Environment, Food & Rural Affairs (Defra) announced it was to pull £169 million of Private Finance Initiative funding (PFI) from the £500-million project. However, last month, the UK Green Investment Bank, committed to making an investment of £51 million into the project.

Read more about the King’s Lynn incinerator project.