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arc21 PFI left in limbo with one bidder remaining after Sita announces its withdrawal

Sita UK has pulled out of the bidding for the £1bn arc21 private finance initiative (PFI) in Northern Ireland, leaving only the partnership bid of Greenstar Holdings and E.On Energy from Waste AG. The announcement comes after the third bidder, Veolia, also withdrew its interest last year.

A statement from Sita explained that requirements surrounding the bid were part of the reason for withdrawing. Its chief executive David Palmer-Jones said: “Sita has been fully engaged in a comprehensive due diligence process for the arc21 PFI contract and having reviewed our current commitments and the requirements surrounding the bid, we have taken the decision to withdraw from the procurement process.

“This decision has not been taken lightly and we would like to underline our commitment to our continued involvement in PFI procurement projects in the UK. Sita wishes the arc21 team every success with this continued procurement.”

A person close to arc21, an umbrella waste management group which spans 11 local authorities in the east of Northern Ireland,  explained that although the Greenstar Holdings/E.On bid is the only one left on the table they will not automatically become the preferred bidder. He said: “arc21 is talking with government departments to see if they need to adjust the procurement process for this PFI contract and if so, how it can do this.”

In response to Sita’s action, arc21 chief executive John Quinn added: “We are obviously disappointed that Sita has taken the decision to withdraw from the competition and thank them for their best wishes. We will continue to progress our project in a considered and measured way.”

Arc21, which is one of just three waste management groups in Northern Ireland, aims to build up to two mechanical biological treatment plants and an energy-from-waste facility to deal with waste across the 11 local authorities.

The contract for the PFI was expected to be awarded at the beginning of 2011.

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