The UK Resources Council, we learned recently, is drafting a waste sector deal which it will present to ministers in an attempt to identify and build the infrastructure the UK needs far into the future.
But how will all these expensive facilities be paid for? Private finance initiative (PFI), which funded many a MRF and incincerator, has been for many a costly failure.
One theme that keeps coming up in the pages of MRW is the role of private equity (PE). Two fast-expanding companies, Reconomy and Enva, are both driven by PE and both have close working relationships with their PE firms.
Some people may be wary of a firm ruled strictly by the bottom line and the Gods of profit. This is not the case for Enva’s chief executive, Tom Walsh, who said that two years of private equity ownership was a ’positive experience’ and that decision making ‘quick and decisive’.
Mark Wilson, formerly of Alantra and now heading up Headpoint, says mergers and acquisition in the sector has reached record levels.
He said: “I would say that PE involvement in the sector is probably higher than it has been in years gone by, and reflects a general trend of PE funds to investing across most parts of the UK economy.
“PE funds have raised a lot of capital in recent years and are keen to deploy that capital. PE investment levels in a sector tend to fluctuate based on the track record of returns by peers.”
If the recycling sector is in a healthy enough state, and if there are policies to back it, it will be profitable enough market to survive under its own steam with minimal public funds. And this means PE firms could be even more interested in getting involved.