Agenda item

That the report be noted.

The Chief Executive presented the report to seek Members’ views on the appointment of a Preferred Bidder and to set out the stages leading to Financial Close and the award of a contract on the North Wales Residual Waste Treatment Project (NWRWTP) of which Flintshire was the lead Authority.  The officers present included the Director of Environment who represented Flintshire on the project and also the Head of Finance as Section 151 officer, the Head of Legal & Democratic Services as Monitoring Officer and the Internal Audit Manager who undertook Internal Audit work on the project on behalf of all five Councils.  Whilst it was felt important to provide an overview in the first two reports on the agenda, more commercially sensitive detail on the evaluation of the final tender was included in the final report and would therefore need to be considered in private session.

The key points of the presentation were:

§         Scope of Project

§         Latest Progress Update

§         Project Stages

§         Community Benefit Scheme

§         Partnership Management: Transfer Station Network

The Chief Executive explained that the two principal issues were (1) to consider whether the tender sufficiently demonstrated value for money in a workable solution and (2) to seek support on the Second Inter-Authority Agreement which represented a five-way binding agreement from a single client.  The aim was to provide an environmental solution for waste to avoid the continued use of landfill sites.  A funding commitment for the term of the contract had been secured from Welsh Government (WG) once the contract had been awarded, following agreement from all five partner Councils.

In response to a recent press article on the tender process, the Chief Executive pointed out that the project had attracted some major international bidders and that all but two had been de-selected: Sita UK Ltd and Wheelabrator Technologies Incorporated (WTI) which were closely matched at that stage.  Following the withdrawal of Sita from the process due to commercial reasons, WTI had been recommended as the Preferred Bidder with assurance given that there would be no difference in the quality of outcomes.  Intensive negotiations by the Council’s officers had resulted in agreement by all five partner Councils of £180K per annum of community benefits to be used for community/education projects in Deeside, which was thought to be the largest such sum for this size of project.

The Director of Environment provided explanation on the decision for partner Councils to ‘self manage’ the transfer station network which was outside the contract, as previously reported to the Committee.  This cost sharing between the partnership together with the subsidy commitment from WG would result in £50K per annum benefit to the Council.

On the decision to use road as the means of transporting waste to the facility, Councillor Ian Dunbar raised concerns about heavy vehicles using roads in the local towns which may be further affected by any closures to the Flintshire bridge.

The Chief Executive pointed out that the bridge was infrequently closed due to periods of severe weather and that traffic volume to the facility (which was small by UK standards) would be fairly modest.  The client’s decision to choose transportation by road as opposed to rail/road had been due to cost implications outlined in the report.

The Director of Environment said that the decision to select road as the method of transportation was reversible if the option for rail/road became more viable during the term of the contract.  Road traffic movements to the facility were estimated to be 45-55 per 8-hour day, inclusive of 22 movements from Flintshire vehicles, with tracking equipment installed.  The route, which could be dictated by the client, generally aimed to use trunk roads.

In response to comments from Councillor Dunbar on the sustainability of contributions made by each partner Council towards the Community Benefit Scheme, in view of the longer term economic climate, the Chief Executive explained that a contractual commitment from all five Councils would meet this obligation.  WTI would accept risk and financial liability for the energy efficiency scheme with plans to share this energy income.

Councillor Paul Shotton sought clarification on the proposal for ‘more frequent’ air quality monitoring of ‘PM2.5’.  The Chief Executive referred to the decision of the Joint Committee to initially monitor for the first year on a monthly basis and went on to refer to WTI’s record of waste treatment facilities in the United States and those emerging in Europe with the same technology deployed by many other waste providers.  In response to a question about the Community Benefit Scheme, he replied that it would be the Council’s decision on how this was spent.

The Project Director gave an overview of monitoring undertaken on the candidate site which had suggested that emissions from the waste plant would contribute negligibly to background atmospheric emissions in the area.  If successful, WTI would undertake further monitoring specific to their facility design, however it was expected that the plant would operate significantly well below statutory levels.  Additional background monitoring in areas close to the site had produced good quality data with any emissions well below statutory levels to breach standards.

The Cabinet Member for Waste Strategy, Public Protection & Leisure spoke about the decision taken to monitor air quality of PM2.5 which was below the statutory requirement and that any change from this practice would need to be determined by the Joint Committee.  He added that in relation to the Community Benefit Scheme, the £180K per annum could be set aside against prudential borrowing depending on what was decided to be provided from the community benefit sum and the method of financing.

Following a suggestion made by Councillor Shotton, the Chairman asked if arrangements could be made for the Committee to visit one of the incinerator sites in the UK.

Councillor Nancy Matthews thanked the project team for their detailed reports on this complex subject which was environmental rather than political.  In supporting the facility, she referred to the prospects of less emissions from the facility as opposed to that from landfill sites.

Councillor Peter Curtis hoped that monitoring would continue after the first year in the event of changes in statutory levels of emissions and queried the impact on the partnership if local government re-organisation was to proceed.  The Chief Executive said that any successor Councils would be required to honour the benefits and liabilities of their predecessors for the term of the contract, with the outcome of the Community Benefit Scheme subject to political decision of the relevant Council.

In response to queries raised by Councillor Haydn Bateman, the Project Director said that similar plants generally operated 24 hours per day with waste delivered during the day and burned throughout the night.  The small amount of ‘bottom ash’ produced by the plant was turned into high grade aggregates and often used locally whereas the air pollution control residue (previously sent to hazardous landfill) was now intended for recycling due its lime content.  Only a very small proportion of materials not suitable for the facility would be diverted to landfill.

On the treatment capacity of the facility, the Project Director said that the proposal for 175,000 tonnes per annum allowed more flexibility for the partnership together with the opportunity for WTI to attract other similar waste from local businesses to make up the additional capacity.  When asked about the potential for imported waste, the Project Director replied that this would be matter for the Planning Committee, however local waste would be prioritised.

Councillor Chris Dolphin commented on the need for greater joined-up thinking on Councils by WG and asked about the outcome of the facility in Wrexham, should Councils merge under local government re-organisation.   The Chief Executive explained that the facility in Wrexham, under a Private Finance Initiative (PFI) scheme, had pre-dated the approach by WG for Councils to work as consortia.  In response to further discussion on the facility in Wrexham, it was explained that no analysis had been undertaken to compare emissions and that in the event of Councils merging, a decision would need to be made taking into account any penalty clauses.

In response to a question from Councillor Curtis, the Chief Executive said that there were no plans to under-utilise the facility as this would meet capacity with additional room for WTI to seek commercial trading opportunities, subject to consideration by the Planning Committee.

When asked by Councillor Cindy Hinds about employment opportunities arising from the project, the Chief Executive said that there would be a considerable number of jobs created during construction of the facility by the contractor and sub-contractors, and afterwards it was anticipated that around 30 full-time jobs could be created to run the facility.  The Cabinet Member for Economic Development added that the energy benefits could lead to industrial growth in the area which may have a positive effect on employment.

The Chief Executive explained that in addition to the share of energy benefits, there was future provision for connection to a district heating network.  He added that energy was viewed as one of the top sectors of economic development in North Wales.

RESOLVED:

That the report be noted.