Two Welsh councils are locked in a legal battle over a mechanical biological treatment facility.
The Western Mail reported that Neath Port Talbot Council will be suing Bridgend for around £5 million in connection with problems relating the Crymlyn Burrows Materials Recovery and Energy Centre (MREC), near the border of Neath Port Talbot and Swansea.
Municipal waste from both council areas is disposed of at the plant, which processes material for recycling and incinerates other waste.
A political source told the Western Mail: Neath Port Talbot is apparently demanding Bridgend pays up its fair share of the costs involved with various aspects of the MREC plant which have accrued since the collapse of its original operating company HLC.
The Royal Bank of Scotland failed to get the money back which had been used to finance the building of the plant when it withdrew from a court case two years ago. The councils gained an asset worth around £35m. They are now in the process of looking for a new company to own and run the plant but this will not be decided until the summer.
The problem with all of this is the councils were left to find their costs. Neath Port Talbot obviously believes Bridgend should share the costs. I understand Bridgend has failed to pay an invoice for millions sent to them by Neath Port Talbot. Whoever wins this will leave the other authority having to find millions which it hasnt got.
The plant was built and initially run by Portuguese operator HLC, but in 2005 Neath Port Council pulled out of its contract with HLC after the firm went into administration.
According to the Mail, Neath Port Talbot council took over the running of the plant and in 2006 it was reported debts worth more than £67m could accrue over 25 years unless a new operating partner was found. A legal tug-of-war ensued between the council and HLCs creditor, the Royal Bank of Scotland, which was seeking to obtain some of its £40m debt with the plants assets. The dispute was settled out of court in November 2006, putting the plant in the hands of Neath Port Talbot Council.
When MRW contacted the two councils to confirm or deny the story, they issued the following joint statement: "Bridgend and Neath Port Talbot Councils are in discussions concerning a contractual matter related to waste disposal arrangements and both are hopeful that an early resolution will be possible. At this stage, neither Council is prepared to make any further comment."