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Waste PFI deals ready to reach closure this Autumn

Two large waste private finance initiative (PFI) schemes are expected to reach financial close in September.

Wakefield Council is planning to finalise its £750m waste PFI contract for recycling, autoclave and anaerobic digestion facilities at South Kirkby this autumn, five years after a preferred bidder was chosen.

As MRW revealed in June, the council is seeking Green Investment Bank (GIB) funding to bring the project to close. The council would not comment on how much it had received from the GIB.

The deal was originally expected to be completed in 2010 after VT Group was chosen as preferred bidder for the contract in 2007. But the company was bought by Babcock in 2010 after the recession pushed back the contract signing.

Waste firm Shanks was then chosen to partner with Babcock to complete the PFI deal in February this year. But this was again delayed because of changes in the preferred bidder, according to the council.

Leeds City Council’s £550m waste PFI deal is also set to reach financial close in September. A planning application was submitted earlier this month by Veolia Environmental Services (VES), which was chosen as preferred bidder in January.

The scheme has been granted £68.6m in PFI credits, with the rest of the funding coming from VES. The company will build a waste recycling and energy recovery plant in the East Leeds Cross Green Industrial Area.

Other waste PFI schemes have reached financial close recently. Last month, Essex County Council and Southend-on-Sea Borough Council signed a joint 25-year contract with a consortium of Urbaser and Balfour Beatty on the PFI-funded scheme.

The Barnsley, Doncaster and Rotherham waste PFI contract, with a partnership formed of Shanks Group and Scottish and Southern Energy, was finalised in March and planning permission was granted in April.

The scheme is funded by Lloyds and SMBC banks.

But funding for some waste PFI projects received a blow when the chancellor axed PFI funding for seven schemes in the Spending Review in 2010, while 11 schemes retained the credits.

In April it emerged that the GIB could be used to bail out larger waste PFI schemes that were struggling. A bank official admitted it was “disappointing” that the bank would be used in a way which could freeze out smaller, more innovative schemes.

PFI funded waste schemes - (PFI contribution in brackets)

BARNSLEY, DONCASTER AND ROTHERHAM

Value:   £750m (£77.4m)

Financial Close: March 2012

Preferred bidder: 3SE (Shanks Group and Scottish and Southern Energy)

Planning: permission granted April

Operational: summer 2015

BRADFORD AND CALDERDALE

Value: £170m (£62.1m)

Financial close: N?A

Preferred bidder: Pennine Resource Recovery (Skanska/aecom)

Planning: submitted May 2012

Operational: 2016

ESSEX AND SOUTHEND-ON-SEA

Value:  £800m (£100.9m)

Preferred bidder: Urbaser BB

Financial close: June 2012

Planning: application submitted March 2012

Operational:  2015

HERTFORDSHIRE

Value: £800m (£115.3m)

Preferred bidder: Veolia

Financial Close: July 2011

Planning application: end of 2011

Operational:  April 2015

LEEDS

Value:  £550m (£68.6m)

Preferred bidder: Veolia Environmental Services

Financial close expected this September

Planning: application submitted July 2012

Operational: end of 2015

MERSEYSIDE WASTE DISPOSAL AUTHORITY AND HALTON

Value:  N/A (£90m)

Preferred bidder: between Kovanta and Sita, to be announced in autumn

Financial close: N/A

Operational:  2015

NORFOLK

Value:  £500m (£91m)

Preferred bidder: Cory Environmental and Wheelabrator Technologies

Financial Closure:  N/A

Planning: on hold pending government decision

Operational:

NORTH YORKSHIRE AND CITY OF YORK

Value: £900m (£65m)

Preferred bidder: Amey Cespa

Planning: submitted September 2011

Financial Close: N/A

Operational:  2015

SOUTH TYNE AND WEAR WASTE PARTNERSHIP

Value: £727m (£73.5m)

Preferred bidder: SITA led consortium

Financial Close: April 2011

Planning: permission granted 2008

Operational: April 2014

SOUTH WEST DEVON WASTE PARTNERSHIP

Value: £200 (£95m)

Preferred bidder: MVV Environment Devonport

Planning: permission granted February 2012

Financial close: March 2011

Operational: November 2014

STAFFORDSHIRE

Value: £1bn (£122.4m)

Preferred bidder: Veolia

Financial close: July 2012

Planning permission: granted February 2011

Operational: 2013

WAKEFIELD CITY COUNCIL

Value: £750m (£33m)

Preferred bidder: Shanks/Babcock

Planning: N/A

Financial Close: expected mid September

Operational: end of 2014

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