Delivering the Recycling and Waste Management Contract by uhb20986

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									          Delivering the Recycling and Waste Management Contract


        What is the Greater Manchester Waste Disposal Authority (GMWDA)?

 A Statutory Joint Waste Disposal Authority - one of 6 nationally.
 Formed in 1986 on the demise of Greater Manchester County Council.
 Serves 9 of the Association of Greater Manchester Authorities (AGMA), Wigan is a statutory
   waste disposal authority in its own right and is represented on the ‘Authority’ (GMWDA) for
   administration purposes only.
 England’s biggest Waste Disposal Authority, managing 5% of the nation’s waste.
 The Environmental Protection Act directs GMWDA’s activity.




           Municipal Waste Management Strategy (MWMS), Developed with
                               Public Consultation
Developed with intensive stakeholder engagement – flexible as one size does not fit all.
          “Start with the end in mind” which is “Maximising recycling and composting”.

 Agreed by GMWDA and all 9 Waste Collection Authorities (WCAs).

 Objectives and targets:

 -Reduce growth in waste arising to 1% by 2010 and 0% by 2020 (reduced by 14.5% over the last 5
  years).

 -Recycling and composting to be given the highest priority.

 -To meet Landfill Allowance Trading Scheme (LATS) for Biodegradable Municipal Waste (BMW).
 -Surplus allowance 140,500 tonnes in 2008/09 and an estimated surplus allowance of 96,000
  tonnes in 2009/10.

 -33% recycling/composting by 2010 (31.6 % already achieved in 2008/09).

 -At least 50% recycling/composting by 2020 (Contract should achieve this by 2015).
 -Continue to develop partnership working between the Waste Disposal Authority and the Waste
  Collection Authorities.

The MWMS is the output specification for the Private Finance Initiative (PFI).



                                             1
                                        Partnership
     The Recycling and Waste Management Contract is a working partnership between the
                                 following organisations:




Preparing for the Recycling and Waste Management
                     Contract
Attracting major players from the Waste Industry:
The Authority carried out market stimulation activity in the
waste and energy industries to develop and expand markets
for new technologies and for Refused Derived Fuel (RDF) users.

October 2004 - Outline Business Case (OBC) submission, taking
into account:
         Increasing environmental awareness;
         Over reliance on landfill;
         Changing legislation;
         Landfill Allowance Trading Scheme (LATS);
         Ageing facilities cannot deliver high recycling and composting rates; and
         No facilities in Greater Manchester for food waste treatment.

January 2005 – Government approve PFI credits.

2005 Official Journal of the European Union (OJEU) Notice – Negotiated procedure (1993
regulations).

October 2005 Invitation to Tender - GMWDA formally invited four bidders to submit tenders
for return:
           -Shanks/Babcock and Brown;
           -Sita/Royal Bank of Scotland/Peel Holdings;
           -Viridor/Laing; and
           -Waste Recycling Group.

January 2006 - GMWDA received proposals from all four bidders. The Authority evaluated
these tenders for the major project.



                           Preferred Bidder Announcement

January 2007 - GMWDA agreed to the appointment of consortium made up of Viridor Waste
Management Limited and Laings Roads Limited as the Preferred Bidder for the Authority’s
waste services Contract.



                                          2
                                          Key Advisors

The Authority employed key professional advisors in the essential areas of finance, legal, technical
and planning, as well as reputational management:

      Ernst and Young LLP, Financial Advisors — Rob Winchester, Partner.
      Eversheds LLP, Legal Advisors — Mike Mousdale, Partner.
      Willis Limited, Insurance Advisors — Chris Lloyd, Executive Director.
      Entec UK Ltd, Technical Advisors — Ken Rigby, Technical Director.

                                Aligning the Collection Systems
   The collection of waste in Greater Manchester has been standardised through partnership
   working and developed into four waste streams. The intention is to deliver long-term financial
   environmental benefits in Greater Manchester.
   The four waste categories are:
      Green waste (garden and food waste) which will go into the
        In-Vessel Composter (IVC) and will be turned into compost.
      Paper and cardboard is bulked and sent for processing.
      Co-mingled dry recyclables (glass containers, plastic bottles and
        cans) will go through the Materials Recovery Facility (MRF) to be
        separated, the materials are then sent for recycling into new
        products.
      The mixed waste will be processed in Mechanical Biological
        Treatment (MBT) facilities. The Refused Derived Fuel (RDF) and
        biodegradable material is separated. The biodegradable material
        is used in Anaerobic Digestion (AD) facilities to produce methane
        which provides a source of power for the whole of the facility
        and excess power which is placed into the grid. The residue from
        the AD is used either as low grade RDF or as landfill aftercare, as
        a top dressing.

                        Planning Permissions and Site Acquisitions

From July 2007 -The Authority had to ensure that sites required were
available prior to Contract signing. This involved buying three new
sites. The Authority then had to ensure that building and redeveloping
the essential infrastructure was possible on all of the sites the
Authority owned.

There has been 100% success with securing planning applications for
construction and redevelopment of 23 sites for 36 facilities across
Greater Manchester.

The Waithlands site in Rochdale was the first major facility that was given planning permission.
The site was a closed landfill site owned by the Authority. The first facility built was the IVC
facility, which will process kitchen and garden waste into compost for use in landscaping, farming
and horticulture. This is one of four IVC’s planned for Greater Manchester.

January 2008 - Advanced works began at Waithlands in Rochdale on the IVC facility at a time
when GMWDA anticipated Contract sign by April 2008.

September 2008 - The Thermal Power Station (TPS) and Combined Heat and Power (CHP)
industrial facility owned by Ineos Chlor and located at Runcorn received planning permission.
Ineos Chlor entered into a Contract with Viridor and Laing who are a joint venture company.


                                             3
                                Technology and Infrastructure
A new ‘clean’ Materials Recovery Facility (MRF) will sort kerbside collected recyclable materials
(cans, glass containers and plastic bottles) and will be located in Manchester
at Longley Lane.
New Mechanical Biological Treatment (MBT) and Anaerobic Digestion (AD)
plants replace existing treatment processes at Longley Lane and Reliance
Street in Manchester, Cobden Street in Salford and Bredbury Parkway in
Stockport plus an MBT plant at Arkwright Street in Oldham.
Refuse Derived Fuel (RDF) (approximately 275,000 tonnes) from the MBT
process will be supplied by rail to a Combined Heat and Power (CHP) generation facility at Ineos
Chlor in Runcorn.
Residual waste that cannot be recycled, instead of being sent to landfill, will be processed into a
fuel for use by a North West major chemicals    producer Ineos Chlor to provide energy for its plant
at Runcorn, Cheshire. The fuel will feed the CHP plant which will produce electricity and steam to
replace energy currently generated from non-renewable sources.
Continued operation of the Bolton Energy-from-Waste (EFW) facility
(110,000 tonnes).
Four new enclosed In-Vessel Composting (IVC) facilities to treat garden and
kitchen waste at Bredbury Parkway in Stockport, Waithlands in Rochdale,
Salford Road in Bolton and Nash Road in Trafford.
The continued use, with upgrades and improvements, of two Green Waste Shredding (GWS)
facilities at Every Street in Bury and Longley Lane in Manchester.
Major refurbishment or the creation of new Transfer Loading Stations (TLS) at Raikes Lane in
Bolton, Every Street in Bury, Arkwright Street in Oldham, Waithlands in Rochdale, Cobden Street in
Salford, Bayley Street in Tameside and Bredbury Parkway in Stockport.
A major overhaul of 17 of the current network of Household Waste Recycling Centres (HWRCs)
including new sites and modernised facilities, many of which will be ‘split level’, and the retention
and continued use of the 7 other sites.
Four public Education Centres - Raikes Lane in Bolton, Bredbury Parkway in Stockport, Pilsworth in
Bury and Longley Lane in Manchester.

The technologies will assist in improving recycling levels and the recovery of household waste to
make Greater Manchester a more sustainable environment.

The following facilities are being built or redeveloped, as part of the
Contract:
           1 x MRF – Sharston.
           4 x IVC – Bredbury, Trafford Park, Waithlands, Over Hulton.
           5 x MBT plants – Reliance St, Cobden St, Bredbury, Longley Lane & Arkwright St.
           17 x HWRCs.
           Retain use of Bolton TRF.
           CHP plant at Runcorn.
           Green Waste Shredding Facilities.
           7 x TLS (Residual &/or recyclables)

GMWDA is confident it will deliver the Greater Manchester facilities by
2012, completed and fully operational. The RDF facility at Ineos Chlor will be built by 2012 and fol-
lowing testing will be handed over in 2013.



                                                  4
                         The Deal is Signed on the 8th April 2009

The Recycling and Waste Management Contract was signed with support from the Treasury
Infrastructure Finance Unit (TIFU).

The funding for the project comes from a number of sources. It is a government backed PFI
Contract and will receive £124.5 million PFI credits. Viridor Laing, as sponsors, are enabling
funding through a number of major financial institutions: the European Investment Bank; Bank of
Ireland; Sumitomo Mitsui Banking Corporation; Banco Bilbao Vizcaya Argentaria; and the Lloyds
Banking Group. The Pennon Group, Viridor’s parent company is also providing direct investment.
GMWDA will provide capital contribution and funding of over £103 million.




Back row left to right: Louise Calviou—Inoes Chlor, Andy Harmer – John Laing, Councillor Neil
Swannick—GMWDA, Collin Drummond - Viridor.
Front row left to right: Charlie Parker—GMWDA, Barrie Hurley – Viridor.


        Over 25 years the Contract is worth £3.8bn, which is a total of approximately
          £4.7bn, when landfill and the Authority’s own costs are added.
        The Contract provides £631m of investment.
        Funding is from a cocktail of sources - with £103m direct from the Authority.
          Uniquely GMWDA is a “bank” lending to its own scheme.
        Approximately £125 million in PFI credits funded by the Government’s PFI regime.


The table below summarises the funding for the Recycling and Waste Management Contract.


Source of Funding                                                  %
 Commercial Banks                                                  31
 European Investment Bank                                          23
 Equity Investment – Sponsors (Viridor   Waste Management, John    19
Laing Investments and Ineos Chlor)
 Treasury Infrastructure Funding Unit                              15
 Capital Contribution                                              8
 WDA Senior Debt                                                   4
  TOTAL                                                            100%



                                            5
                                  Boost to Local Economy

620 jobs made secure at the existing workforce (in what was Greater Manchester Waste Limited)
and 100 new workforce jobs created. The Contract and its associated works is expected to provide
5,000 jobs during the early years of the construction programme.




                   Success on Landfill Allowance Trading Scheme (LATS)

The Authority was already meeting the Landfill Allowance Trading Scheme (LATS) requirement
before the Contract was signed. However, after signing the Contract, the Authority will continue
to meet LATS targets as well as exceeding the obligations. The LATS allocation for 2007/08 was
718,289 tonnes; of this, the Authority achieved a surplus of 135,832 tonnes, a significant
achievement. For 2008/09 there was surplus of 140,500 tonnes and it is anticipated there will be a
surplus of 96,000 tonnes in 2009/10, which are the benchmark years.

Future projections - In 2012/13 it is anticipated that the Authority will meet its allowance with
a forecast of a small surplus. In 2019/20, once construction has finished, it is anticipated that
there will be an annual surplus in excess of 40,000 tonnes.




                                   Strength of Partnership

In partnership with the Waste Collection Authorities Greater Manchester Waste Disposal
Authority has achieved:

   Success to date in Waste Reduction. The Partnership has reduced the amount of municipal
     solid waste    collected from 1.4 million tonnes in 2004/05 to 1.2 million tonnes in 2008/09.
   Increased recycling and composting from 7% in 2002/03 to 31.6% in 2008/09.
   Part of the partnership with the WCAs has enabled the GMWDA to disseminate best practice
     through contributing to conferences, visits and other public authority bodies, as well as
     organisations regionally, nationally and internationally.




                                            6
                   Examples of Progress To-Date


                       Longley Lane, Manchester
                    MRF, MBT, HWRC and Green Waste

  May 2009       September 2009          October 2009      December 2009




                         Waithlands, Rochdale
                          IVC, TLS and HWRC

Early May 2009     June 2009              July 2009        November 2009




                         Lumns Lane, Salford
                               HWRC

Early May 2009   Late May 2009           June 2009           July 2009




                      Bredbury Parkway, Stockport
                  HWRC, IVC, MBT, TLS & Education Centre

    May 2009     September 2009          October 2009      December 2009




                                 7
                                Climate Change Action Plan

GMWDA is committed to taking action against climate change and in June 2007, GMWDA signed up
to the Nottingham Declaration on Climate Change. This plan plays an integral part in how the
Authority is reducing its environmental impact as well as exploring how we can adapt to our
changing climate.

Greater Manchester is already reducing its environmental impact year on year, not just in the
important area of recycling, but also in the vital area of waste
reduction.

The Contract will have a beneficial effect on the Climate Change
Action Plan as even more recyclables can be extracted from the
waste stream, with alternative uses found for waste rather than it
                                          going to landfill.

                                          Through the action plan
                                          GMWDA will:-
                                             Reduce the steady increase in overall waste growth
                                               to 1% per annum in 2010 and 0% in 2020.
                                             Increase recycling and composting rates to 33% in
                                               2010 and to at least 50% in 2020.
                                             Increase carbon emissions savings from
                                               approximately 92,000 tonnes of CO2 per annum in
                                               2008/09 to approximately 370,000 tonnes in 2015
                                               and approximately 400,000 tonnes in 2020.



GMWDA as an employer, service provider and community leader has the responsibility to cut
emissions, which includes the provision of HWRCs to the
public and recycling and processing facilities to support
kerbside collections. The Action Plan will help the Authority
explore and work alongside other public and private
agencies and the wider community, as well as Waste
Collection Authorities.     By working in these close
partnerships, GMWDA aims to help reduce the impacts of
climate change, and ensure ongoing work results in
continuously improving performance over the coming years.


The new Contract will bring GMWDA’s plan to life and
provide Greater Manchester with the latest waste management technologies. During the
evaluation phase of the Contract to deliver the waste management solution, carbon emissions
                                    were a key consideration and helped to inform the choice of
                                    Contractor. The new facilities will provide an alternative to
                                    landfill by extracting useful materials and recycling or
                                    composting them as well as generating green electricity and
                                    replacing fossil fuels. The Action Plan highlights the
                                    Authority’s contribution and commitment to help tackle
                                    climate change.




                                            8
                   Working in Partnership with WRAP and the WCAs

GMWDA works with Waste Collection Authorities (WCAs) and Waste Resources Action Programme
(WRAP) who supply funding for recycling and waste prevention
campaigns throughout Greater Manchester, including Wigan.

The first campaign delivered in 2006, promoted behavioural change
and the main objectives were to promote and increase recycling rates, as well as creating a
regional recycling brand ‘Recycle for Greater Manchester’.

   The tonnage of general waste delivered to the Household Waste Recycling Centres (HWRCs)
     decreased and the tonnage of recyclates including paper, cardboard and cans increased by
     12.5% from 28.8% to 41.3%. This has continued to increase year on year
     with a forecast of 45% in 2009/10.

The next stage of funding in 2008 was directed at plastics contamination,
aiming to reduce mixed plastic contamination following a recently introduced
co-mingled scheme. The objective of the campaign was to inform and
educate residents in Greater Manchester.

   A contamination monitoring project was commissioned to help assess
     the impact of a communications campaign being run in Greater Man-
     chester to reduce the problem of plastic contamination in the dry recy-
     cling.
   The pre campaign monitoring was conducted in November 2008 and the second phase of
     monitoring following the campaign was carried out in March and April
     2009. Over the two phases 27,000 households were included in the
     monitoring.

The data showed:

   An increase in participation by 9% across the Greater Manchester area
     between the two phases.
   At the beginning of the campaign the overall contamination rate at the
     kerbside was 12% but by March it had decreased by 2.5% to 9.5%.
   Across the combined Greater Manchester area the instances of plastic
     contamination with more than a single item had decreased.
   Co-mingled collections had increased 67.59% from 27,075 tonnes in 2007/2008 to 45,377 ton-
     nes in 2008/2009 and 50,000 tonnes in 2009/10 (projected).

The third and current campaign, Love Food Hate Waste is raising awareness of the need to reduce
the amount of food that residents in Greater Manchester throw away.

   A two year waste prevention campaign started in April 2009 focusing on Love Food Hate
     Waste in the first year and bulky waste in the second year.
   A survey was carried out to establish a baseline of the residents’ attitudes, behaviour and
     perceptions on waste prevention issues.

The work with WRAP, the WCAs, Viridor Laing (Greater Manchester) Limited
and GMWDA has increased residents’ participation in waste reduction and
increased recycling rates in every district. The campaigns to date have
contributed to the strategic aim of recycling and waste prevention.




                                           9
      Support for the Voluntary Sector and the Introduction of Reuse Credits

GMWDA offers community and voluntary sector organisations recycling and
reuse credits as an incentive to reduce the amount of household waste for
collection, disposal and ultimately landfill.

GMWDA offers community groups access to two types of credit schemes:

a: The recycling credits scheme is a cash incentive paid to community
sector groups to encourage the recycling of paper, cardboard and textiles
and other materials that would otherwise have gone into household bins. In
2008/09 4,019 tonnes of waste was recycled in this scheme.

b: Reuse credits are offered to furniture reuse organisations who collect
items of bulky furniture that are sold or often donated to families and
individuals on low incomes. In 2008/09 over 302 tonnes of waste was reused a result of the
scheme.

Credits are paid for collection, disposal and reuse because GMWDA can pass on the savings in
collection and disposal costs directly to the community sector. In total 196 organisations
throughout Greater Manchester took part in the scheme in 2008/09.

The Authority also provides tipping permits to 124 charity shops (2009) in the area of Greater
Manchester so that they can dispose of shop donations that cannot be sold. This only equated to
1,800 tonnes in 2008/09.

GMWDA is currently working with its contractors and the community waste sector to pilot a scheme
whereby residents visiting the HWRCs can donate furniture that is suitable for reuse to a furniture
reuse organisation.


                                      Education Centres

As part of the Contract, there are waste education officers who facilitate visits at various sites
across the region and who provide online resources to support waste awareness education.

The delivery of education material and facilities for visitors at four locations, will showcase the
new technologies. The Authority and the Contractor will work closely with key stage 2 pupils up to
those involved in University studies, as well as catering for general interest groups to raise
awareness of waste prevention by reducing, reusing and recycling in the local community. An
interactive education centre aimed at primary school children is already available at the Bolton
based Hurstwood Court Facility and a purpose built classroom and welfare facility are available at
the Pilsworth based power plant site.

The other two education centres will be built at the Bredbury Parkway site in Stockport and the
Longley Lane facility in Manchester.




                                            10
                                        Landfill Aftercare

Although not covered in the Contract, Landfill Aftercare is still an important part of Greater
Manchester Waste Disposal Authority. The Landfill Aftercare Team is responsible for 23 Closed
Landfill Sites in Greater Manchester, which were all closed before 1992.

     Decomposing waste produces landfill gas and noxious liquids (leachate).

     The leachate has to be managed and controlled under a statutory requirement
       (Environmental Protection Act 1992).

     The Aftercare Team is responsible for installing, repairing and maintaining the supporting
       infrastructure e.g. pipes and boreholes.

     There are 4 Methane Stripping Plants which break down the methane from the landfill.
       The water is then pumped to the sewer and ensures the water course is not polluted.

     4 new Methane Stripping Plants are currently being constructed and will be completed by
       March 2010.

     Two sites supply electricity, which is fed into the National Grid.




     Red Moss Landfill Site in Bolton      Methane Stripping Plant    Drinkwater Park Landfill site in Bury




               For media enquiries or additional copies of this document please email
               gmwda@gmwda.gov.uk or telephone Pamela Taylor on 0161 770 1717

                                               GMWDA
                                          Medtia Chambers
                                            5 Barn Street
                                               Oldham
                                              OL1 1LP
                                           0161 770 1717




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