Sita was awarded a 30-year £427m contract in July 2006 to manage the countys waste. Its plans included the construction of a 240,000 tonne EfW plant in St Dennis. Cornwall Council has two roles as the Waste Disposal Authority and the Planning Authority.
In March 2009, Cornwall County Councils Planning Committee voted to refuse the application.
The reasons included the impact of the facility on the St Dennis area and the size of the plant.
Sita stated that it would have to be paid for work already completed if the contract was cancelled. Cornwall Council said that alternative proposals for a smaller EfW plant could address the reasons for refusal and avoid paying Sita for this work.
Sita has appealed against the planning decision. A final decision on the plant will be made by Government ministers next March.
In a further twist, Cornwall Council said its contract with Sita stated that if work had not started by the end of March 2010 it had the right to terminate the whole £427m contract through a no fault mechanism, or seek a revised project plan.
Sita told the council it will not be able to start the work by next March because of the inquiry. In a statement put out by the council it states that if the council terminated the contract it would need to meet the costs of all the facilities already provided by Sita totalling an estimated £30m.
The council stated: If the public inquiry rules in favour of the council as the local planning authority and if it looks unlikely that a revised application would be successful, Cornwall Council would retain the right to terminate the contract through force majeure [no fault]. The costs would remain at an estimated £30m.
Sita project director David Buckle said: At present we are awaiting further instruction form the council and in the meantime are progressing with work for our appeal.