GMWDA seeking exit from waste and recycling PFI deal

GREATER MANCHESTER Waste Disposal Authority has confirmed it is “seeking an exit” from a waste and recycling PFI contract with joint venture Viridor Laing.

The 25-year contract, which was signed in 2009, triggered a £631m construction programme that has created a network of 42 recycling, composting and waste management facilities.

But in a statement, Viridor’s parent company, the Pennon Group, said GMWDA, which is the country’s largest waste authority, “continues to face financial challenges due to prolonged austerity”.

The authority confirmed that it would look to leave the 25-year deal, which was signed in 2009, at a meeting on 26 April.

“Discussions and negotiations are now expected to progress over the coming weeks as we work with GMWDA to ascertain the implications. There are provisions in the PFI Contract for compensation to be paid to Viridor and John Laing on termination,” the statement said.

“The book value of Viridor's investment in the Greater Manchester project as at 31 March 2016 is £72.3m, of which Viridor Laing (Greater Manchester) Limited represents £36.8m and Ineos Runcorn (TPS) Limited represents £35.5m.”

Cllr Nigel Murphy, chair of GMWDA, said: “Since the signing of the contract, the financial landscape has changed dramatically, with the spend in most of our districts cut by around a third to meet the requirements of the Government’s austerity measures.

“GMWDA has positively responded to that challenge by seeking to identify savings and proposals for generating value for money services, including sale of spare capacity, facility optimisation and maximising landfill diversion.”

In 2003, around 85 per cent of waste in Greater Manchester was sent to landfill, with only seven per cent recycled. By 2013-14, the recycling and composting rate had risen to 44 per cent, with 77 per cent diversion from landfill.