Rotherham Council has said that the risk to a PFI contract from proposed changes to its waste collections was low, after warnings that contractor Renewi could be affected significantly.
Following a consultation, Rotherham announced that a monthly kerbside collection of plastics will start early next year, under plans due to be approved by the cabinet committee. Garden waste will be collected 11 months of the year from October for an annual household fee of £39.
The council said that the proposals were expected to increase recycling closer to the Government’s 50% target, while saving the council around £500,000 a year.
In a report, the council also noted that the kerbside collection of plastics would affect the tonnage and composition of waste supplied to its residual waste PFI contract, and could qualify as a ’significant collection change’ to the contract.
It said that it has begun talks with Defra, the PFI contractor 3SE (Barnsley, Doncaster & Rotherham or BDR) and its operator Renewi UK Services about the proposals, to understand and determine how the changes may affect the PFI deal.
The PFI project involves Barnsley MBC, Doncaster Borough Council and Rotherham.
Last month, Renewi announced that it had to make “increased onerous contract provisions” including £27m in respect of BDR.
The council’s report also said that Defra could be entitled to withdraw some or all waste infrastructure credits which support the PFI project if changes to the contract compromise recycling performance and reaching targets.
However, Rotherham added that it believed the new waste arrangements provided mitigation to any potential impact on the contractor, and the risk to the PFI contract was low.
“First, the removal of plastic from the residual waste stream may reduce costs at the PFI facility and therefore provide better value for money,” the report said.
“Second, the introduction of kerbside plastic recycling will increase the council’s overall recycling rate and provide better value plastic into the market, which will militate against the volatility within low-value recycling markets.
“Finally, the council believes it would not be in keeping with Defra’s own priorities, or the South Yorkshire Strategy, for the council to suffer any contractual financial detriment for introducing kerbside plastic recycling, when the other authorities in the BDR Pprtnership already have it in place.”
Damien Wilson, Rotherham Council’s strategic director for regeneration and environment, said that the changes to household waste collection would be the biggest the city has seen in years.
“Like every council across the country, we are under increasing pressure to look at how we deliver our waste services,” he said. “We need to ensure they are value for money as well as making sure they achieve high levels of recycling, and that is what we are trying to do.”
- Renewi has been contacted for comment on this story.