The East Sussex Joint Waste Partnership has agreed with Kier Group to end their £120m waste collection, recycling and beach cleansing services contract in June 2019, four years before it was due to run out.
The announcement comes nine months after a Kier trading update revealed an unforeseen hit of £35m on two long-running authority contracts, including East Sussex, which was blamed on market conditions for secondary materials.
The second contract was a recycling and waste collection service with Cheshire West and Chester Council, which has nine years to run.
Kier’s environmental services division was expanded following the 2013 acquisition of May Gurney, which was the original contractor in East Sussex.
Julian Tranter, Kier’s managing director, said: “Following significant change in the recycling market, Kier and East Sussex Joint Waste Partnership have mutually agreed to end the contract with effect from 28 June 2019.
“We continue to work closely together to provide a high-quality service for residents and stability for our teams during the transition.”
Separately, Kier chief executive Haydn Mursell told Construction News of his plans to simplify the company in the UK, with a focus on construction growth.
A spokesman for the East Sussex Joint Waste Partnership said: “Our focus as a partnership remains on the standard of services being provided for residents, so we will continue working locally with Kier to achieve the best possible levels of service over the next two years. By the time the contract expires, the councils will have saved circa £18m.”
The joint waste contract will continue to serve the Eastbourne, Hastings, Rother and Wealden council areas until 28 June 2019.
The four councils will determine their future strategy before any procurement takes place.