Merseyside Recycling and Waste Authority (MRWA), operating as its legal entity ‘Merseyside Waste Disposal Authority’, has submitted a defence to the High Court to counter Covanta’s legal challenge of the authority’s decision to give Sita UK preferred bidder status in a £1.18m contract.
Covanta and Sita were the final bidders for a 30-year contract to manage 430,000 tonnes of residual household waste from Merseyside and Halton.
In April, a consortium led by Sita was declared the preferred bidder. Their plan includes the construction of a £200m energy-from-waste facility with combined heat and power near Redcar, Teesside and a new rail hub for the transportation of waste at the existing Potter Group Rail Freight Terminal at Kirkby on Merseyside.
In June, Covanta confirmed it was going to challenge the MRWA’s handling of the tendering process by taking legal action. This came amid calls from the MP for Ellesmere Port, Andrew Miller, for the MRWA to reconsider its decision. He said the Covanta bid would have created local jobs and been a more cost-effective solution.
In its submission to the High Court, Covanta claimed that MRWA had not been transparent in the tendering process, as it evaluated certain aspects of Covanta’s tender as “fundamentally unacceptable” after having given the impression that those elements were fine during the tender discussion process.
Covanta also claimed that MRWA made mistakes in assessing the tenders. “If the evaluation had been properly and lawfully conducted, it would not have failed to achieve a score of 25% in relation to any of the core criteria, and therefore the Defendant [MRWA] would not have been entitled to reject its proposed solution on that ground,” it said.
MRWA filed its defence with the High Court on 31 July, rejecting the allegations made by Covanta.
Carl Beer, chief executive of MRWA, explained that Covanta’s bid scored less than Sita’s winning bid, and in two of five areas of evaluation scored zero and so was found “to be fundamentally unacceptable”. The Covanta bid was then rejected having failed to reach minimum scores in those areas.
“In addition, during evaluation, parts of the Covanta bid were seen to present serious risks including financial risks, to which the authority, district council and Merseyside council tax payers would be exposed,” he said.
“These risks were determined to be such that, in public law terms, it would be ‘irrational, in breach of fiduciary duties and therefore unlawful’ to enter into a contract with Covanta.”
Covanta has now an option of filing a reply to the defence.
A spokesperson for MRWA said the Authority is seeking “the earliest possible date” for the case to be heard in the High Court.
- Article updated 7 August: we added a paragraph on Covanta’s submission to the High Court