A dispute over whether the right type of waste is being fed into an Urbaser Balfour Beatty (UBB) plant in Basildon has led to a court case between the company and Essex County Council.
Local newspaper the Echo reported that the Technology and Construction Court heard the overall cost of legal proceedings were estimated at up to £24m if the case goes to full trial in April.
Essex and UBB entered an £800m, 25-year PFI contract to build a mechanical biological treatment (MBT) facility, the Tovi Eco Park, in 2012. It remains in its testing phase three years after it was meant to start full operations, and the council is not happy with its performance.
Essex claims UBB had not carried out contractually and compliant commission composition tests and the waste had been the correct kind, and legal action was first threatened in June 2017.
UBB argues the wrong type of waste was being sent to the plant.
Lawyers for Essex told the court: “At its most fundamental, can this facility do what is required by the contract?
“The contract includes acceptance tests and a date by which those acceptance tests have to be passed, which is called the acceptance long stop date.
“If the acceptance tests were not passed by the acceptance long stop date, the council would be entitled to terminate the contact, which would be an extremely serious step for the PFI contract.
“The position is that no acceptance test certificate has been issued and the acceptance long stop date has passed, therefore the main issue is whether the council is entitled to terminate the contract.”
Urbaser declined to comment.
An Essex spokesperson said the council had been successful in recovering most of the costs of the hearing from UBB.
“There will be an opportunity to seek redress for other legal costs through court determination should [the council] be successful at the hearing next spring.
“The council intends to publish the total sum incurred on court proceedings once they have concluded. Due to ongoing legal proceedings ahead of next year’s hearing, it would be inappropriate to comment further at this time.”
A council report says the MBT facility was intended to be capable of treating up to 417,000 tonnes a year of municipal waste once fully operational in 2015.
Essex’s statement of accounts for 2017-18 said the two sides were “utilising the appropriate contractual mechanisms to resolve these issues… Matters where no agreement has been reached have been referred to the courts for consideration and to determine an outcome”.