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Call for councils to be more open about waste PFI process

Councils will have to be more transparent with their private finance initiative (PFI) procurement process following the Greater Manchester Waste Disposal Authority (GMWDA) legal case, according to an industry expert.

Last month, the GMWDA succeeded in its High Court attempt to strike-out Sita UKs attempt to secure more than £90m in damages over the award of the Greater Manchester waste PFI initiative, claiming the companys attempt was started too late (see MRW story). Sita is now appealing this decision in the interests of fair competition and equality between tenders.

But a Bank of Ireland spokesman told MRW: Councils will have to scrutinise their overall decisions to ensure that they do not give rise to challenges. Legal advice to councils will make sure that their plans are transparent.

He said that everybody will now be watching the final outcome of Sitas appeal.

Speaking in a personal capacity, Local Authority Recycling Advisory Committee policy officer Andrew Craig said that PFI was still the only show in town when it came to getting big waste treatment facilities, and said the Government should look at alternative models to PFI. He advocated the Local Government Associations view that the Government should return landfill tax revenue back to local authorities so that they could invest in waste management infrastructure.

He said that councils will ensure that they dot every i and cross every t to avoid any challenges. This could result in less flexibility within contracts between the authority and contractor once the contract has been awarded.

Craig said that authorities may start looking at smaller parcels of investment and smaller contracts rather than big PFI deals, claiming that PFI reduces the amount of opportunities for the community sector to help local authorities deliver waste management treatment services.

On the PFI process, he said: When the tender process gets down to two bidders, those two bidders have made a big financial commitment to even get to that stage, and could cost them around £4m to £5m. This means the loser of the final round will have a big incentive to find something it can challenge to find out why it had lost.

I also fear that reduction in local authority expenditure will lead to contracts being monitored less effectively.

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