The projects affected are Skanska’s waste-to-energy plant in Bradford and AmeyCespa's in Allerton, North Yorkshire. Vinci is the appointed main contractor for the Allerton waste recovery park.
Both projects were all set to start this year but the respective local authorities were told yesterday by the Department for Environment, Food & Rural Affairs (Defra) that the government had decided not to make private finance initiative (PFI) credits available.
Both councils reacted with shock and dismay.
Cllr Andrew Thornton, Bradford Council’s executive member for environment, sport and sustainability, said: “This is a massive blow that jeopardises the delivery of an important project which would have resulted in major long term cost savings for council tax payers in both local authorities. We are currently assessing the impact of losing £62.1m of PFI credits on the affordability of the project.
"The PFI credit contribution was intrinsic to the scheme and Defra has been involved every step of the way. The government had not given us any indication that these PFI credits would not be available and we are just a few months away from starting construction on site.”
The planned new waste treatment plant in Bowling Back Lane, Bradford, would provide a long-term waste treatment solution for both councils and was expected to process 193,000 tonnes of council waste per year, helping to deliver at least 50% recycling by 2020 and divert at least 90% of the city’s waste away from landfill.
Pennine Resource Recovery (PRR) was appointed by the councils as the preferred bidder for the joint project, a consortium of Skanska, FCC Environment and Aecom. Planning permission for the facility was granted in 2012. The two councils and PRR have been working together to finalise the deal and contract closure was expected this summer.
Cllr Tim Swift, leader of neighbouring Calderdale Council, which was also set to use the plant, said: “We are shocked to hear of this decision today. It threatens the entire project, and the jobs and benefits it would bring to the people of Bradford and Calderdale. We are urgently trying to establish what this means for our local area.”
In North Yorkshire, similar views were expressed. "This announcement has come as a complete surprise to us," said council leader John Weighell.
AmeyCespa was granted planning permission for the Allerton Waste Recovery Park near Knaresborough in October 2012 and had appointed Vinci as its design-build contractor.
Cllr Weighell continued: "We have been repeatedly assured throughout the procurement process of Defra's commitment to PFI credits. To be informed now, after the granting of planning consent and the decision of the government not to call in the planning application for a public inquiry, that the funding commitment is being withdrawn is frankly baffling and disappointing.
"We have undergone a lengthy procurement process of more than five years, and Defra has been closely involved in that process - even to the extent of providing a permanent liaison officer at senior level. At no stage in that period, during which there have been continuing assessments to ensure that the scheme remains viable, value for money, and necessary, has any issue been raised by the government. There have been repeated indications from government throughout this period that the scheme will be funded through PFI.
"To make this unexpected announcement, without consulting us and without warning, is extremely disappointing."
He added: "We will now examine all the options available to us, to determine how to move forward in the light of this announcement by Defra."
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