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Hertfordshire waste scheme loses PFI credits

Hertfordshire is the latest local authority to lose PFI credits for a major waste scheme because of concerns over the expected waste arisings and treatment capacity in England in 2020.

MRW exclusive

On Thursday, Defra released an evaluation of the likely contribution of the Hatfield scheme and told Hertfordshire County Council that credits worth more than £115m awarded in 2011 were being withdrawn on grounds of over-capacity.

The decision was based on new data on the level of biodegradable municipal waste (BMW) in residual waste which formed a crucial part of the evaluation.

Previous methodology had indicated an over-capacity of 54% by 2020 if the plant in Hatfield was not operational and an over-capacity of 56% if it was. The new evaluation includes the expectation that the BMW in residual waste will be lower than previously estimated, the figures rising to 65% and 67% respectively.

In the report, Defra says “the new research implies that BMW to landfill in 2012 was already within the level required for the 2020 target.”

Under the Landfill Directoive, the amount of BMW landfilled by 2020 has to be 35% of the 1995 figure.

As other PFI waste schemes such as Calderdale have experienced, such data has been used by Defra to justify withdrawal of credits.

A statement from the department said: “Defra’s responsibility is to ensure public money is used appropriately and as we expect to meet EU landfill diversion targets with the existing infrastructure we now have in place in England, we cannot justify continuing to fund this project.”

The Hatfield site, which was due to have been built by Veolia, already faces an uncertain future after the project was thrown out by Eric Pickles in July as being in contravention of Green Belt planning. Veolia is currently preparing to take its appeal to the High Court.

A Veolia spokesperson said the company was disappointed that Defra had withdrawn the credits.

“This shortsighted decision will increase the UK’s reliance on landfill to treat our residual waste and will not help to grow the circular economy. Veolia believe that Defra’s decision points to a lack of Government support for new waste infrastructure, green investment and jobs, and fails to address the 17 million tonnes of waste that currently goes to landfill.

“The decision has not affected Veolia’s belief that an in-county treatment solution for Hertfordshire is needed, and Veolia will continue with our legal challenge to the secretary of state’s refusal to give planning permission for the recycling and energy recovery facility at New Barnfield, due to be heard in December.”

It is thought that Surrey County Council’s projected waste scheme near Shepperton is the only one outstanding under the same PFI credit arrangement.

Comment:

400_Adam Reads

The Hatfield site was always a risky site given the green belt issues. The capacity concern is more about assumptions and perceptions than hard evidence, and in this specific case the time that has passed since the initial modelling has allowed new trends, data and the changing nature of local services and infrastructure to be considered, hence the conclusion that there will be an increased over-capacity than previously suggested.

As time passes, we gain greater clarity about the likelihood of hitting targets in 2020, and new collection services will have become embedded, thus providing greater clarity about what organic waste in particular will be available. This is inevitable and is not new, and this kind of analysis underpins many of the large PFI and non-PFI waste deals that have been going through closure in the last few years.

Perhaps the biggest concern with all of these DEFRA decisions has been the over-focus on munipical solid waste and the almost complete absence of any assessment of local commercial and wastes that would be available and appropriate. The national and local infrastructure debate needs to reflect other waste streams in the region.

Adam Read, practice director for resource efficiency & waste management, Ricardo-AEA

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