It is a bright, sunny day when I interview David Palmer-Jones and, rather than stay indoors at the Futuresource exhibition, the Sita UK chief executive and I set up outside on the dockside of the Excel venue in east London. On the way to our location from Sita’s stand, I realise that Palmer-Jones is one of those people who is naturally engaging, taking interest in what other people have to say. With this approach, he hopes to steer Sita through the inevitable changes that are coming about through the austere times we are all going to live in and the uncertainty created by the coalition Government working out its policies.
Watch the interview in full in the video interview below
With local authority contracts being one of the mainstays of the big waste management companies’ business, I am interested to find out if he thinks there will be changes to local authority waste deals.
“Initially, funding becomes a big constraint on the future manner in which waste services are provided,” he says. “There is one more tranche of PFI to go. I believe there are certain PFIs now that are under scrutiny for funding and have been called in by Defra just recently, which is interesting for us. They will be looking to maximise their money for the amount of tonnes diverted, therefore schemes that don’t give that diversion or have already good diversion rates may be under threat from the spending cuts that will appear after the Budget.”
“It makes me laugh when we are told that in the UK we would be better off putting EfW plants in quarries to hide them from public view”
Despite this, Palmer-Jones sees local authority contracts as a fundamental part of Sita’s business going forward, but he also recognises that the company will have to diversify its sources of revenue.
“Today, we have about 53% of our revenue of £760m a year coming from municipal contracts,” he says. “As we have perhaps mentioned before, our birth came from the public sector, so we have an affinity [with it]. We often talk about our DNA being municipally based. So it is absolutely critical, and is part of our blueprint strategy in terms of the transformation of waste infrastructure in the UK.
“I see PFI and PPP contracts, of which we also have a number, municipal collection, street cleansing and other forms of tendering for interim work being absolutely vital to Sita,” he adds. “What I think we saw during the difficult recession period in 2009-10 is that it is good to have a balanced portfolio of activities. Certainly the public sector supported us when commodity prices dropped considerably. It will absolutely be a part of the future of Sita UK. But I would like to keep a balance in the portfolio so adding probably some more merchant facilities to take up the slack of commercial and industrial waste coming and being diverted from landfill.”
Recently, MRW has reported on a number of energy-from-waste (EfW) plants that have either had planning permission refused or withdrawn. I wonder if this is a trend he is also seeing.
“Whether it is a trend or not, it is difficult to say,” he says. “I know there has been a number of issues of planning permissions failing in the first instance. EfW is not an easy subject. I’ve spent a lot of my career in Scandinavia [as head of Sita Sweden], and it is interesting to look at the parallels between Scandinavia and the UK. In Scandinavia, there is a direct relationship between utilisation of heat in local housing. There is a direct relation with the householder, and there is little resistance in terms of wanting EfW plants as near to housing as possible to increase efficiency.
“It makes me laugh on occasion when we are told that in the UK we would be better off putting them in quarries to hide them from public view. I think that is a very backward idea. What I think we need to do in EfW, in all its different forms, is to educate the public
and the politicians about the incredible opportunity they have to help the structural deficiencies that are in the energy system in the UK.
“We know that in 2016 large numbers of nuclear and coal-fired power stations will come offline. Without this form of renewable energy, I think [energy] prices will rise rapidly. Here we have an enormous contribution to make to the renewable energy situation and to [mitigating] climate change.”
Sita is proposing to build a number of gasification plants around the country, having signed a deal with Cyclamax to build a number of resource parks across the UK. Palmer-Jones says: “We believe that a community scale of 60,000 to 120,000 tonnes is an interesting part of our portfolio, of our sales offer both to the public sector and to the merchant sector. We believe in it.
“I think the difficulty with this type of technology – and we see it with other people proposing it for PFIs – is whether it is bankable or not. This is newer technology so the banks are, as we know, even more cautious than they were before, and they are looking for very robust technologies. Without the risk transfer to local authorities in terms of technology, it will be difficult for PFI or public sector solutions to use that type of technology.
“For us, we are thinking far more in terms of local solutions for commercial and industrial waste for gasification,” he adds. “At the moment we wrestle quite heavily with where organics will go in the UK. Obviously, anaerobic digestion (AD) is flavour of the month, and we hear the Government is pushing very strongly for a huge increase in AD, which covers perhaps 8% of the 50 million tonnes that we have to divert. So is it something that is needed? Yes, it is interesting to take energy from that. But I don’t think it is the solution to the big picture.”
For a waste management company, it is perhaps surprising that Sita has a vision for a society with no more waste. But he is keen to explain that this is absolutely essential from an environmental point of view and also from a business perspective.
“We spent an awfully long time thinking about the future of the industry and we came up with a new vision for Sita,” he said. “We want to live in a society where there is no more waste. So what do we mean by that? It is perhaps counter-intuitive for what is a traditional waste company to come out with, and even our shareholders had a comment or two about that one!
“What we are trying to do is become a ‘thought leader’ for the industry, and to tell people that they shouldn’t squander the huge amounts of resource that is found within the mixed-waste stream that we have today. With more than 50 million tonnes going to landfill, there is an opportunity to pull out secondary raw materials and energy, feeding back into the circular economy. We are part of that circular economy. We collect, we pre-treat and we incinerate to create energy and then feed that back into this circular economy, where new resources and new products are then produced and then the circle starts again.”
DAVID PALMER-JONES CV
David became chief executive of Sita UK in 2008, having worked for both Sita Sweden and Sita France. He began his career with the company in 1989.
The best thing to happen in my career was…
“Becoming chief executive of Sita UK because it is a significant player and gives me the opportunity to influence waste policy both internally and externally. It also enables me to become a board member at WRAP, which I enjoy.”
The worst thing to happen in my career was…
“Dealing with health and safety issues. This is an intrinsically dangerous industry, so we spend a lot of time and money on health and safety and trying to prevent accidents. But occasionally something happens and this always causes me great distress.”