M&A Advise Council on Revolutionary Waste Project
07 July 2010
Welsh law firm, M&A Solicitors, have recently advised West Sussex County Council on a revolutionary £1 billion waste disposal project, which could eventually be implemented by councils throughout the country. It is envisioned that the project will enable the Council to:
- Assist in boosting the County’s recycling rate to over 50% and will divert up to 80% of the residual waste from landfill.
- Treat food and other biodegradable waste using anaerobic digestion technology – the resultant biogas will initially be used to generate renewable energy and may in the future be harnessed to produce fuel for vehicles. When operating at full capacity the facility will produce up to 3.5MW of renewable energy, enough to power around 7,000 homes.
- Use waste to create a refuse derived fuel (RDF) – a fuel which can be used to displace use of fossil fuels.
- Have an impact equivalent to the removal of 19,600 cars from the road by reducing carbon dioxide emissions.
The 25-year contract adds to M&A’s extensive portfolio of public sector work and will see the County’s black bag household waste undergo treatment at a state-of-the-art Mechanical Biological Treatment (MBT) facility at Biffa’s Brookhurst Wood landfill site. The dramatic reduction in the amount of the County’s black bag waste sent to landfill is expected to save the Council around £300 million over the life of the contract. Work will begin on the MBT facility this summer and it is anticipated that it will open in 2013.
M&A, who have substantial experience in devising contract and funding structures, advised the Council on various contractual and funding options for the waste project, the outcome of which is an ground-breaking funding structure. The West Sussex funding structure was a collaborative development by client and advisers on the project: Phillip Russell and David Rowlands of West Sussex County Council, Steve Hazelton of Ernst & Young, Pat Wheeler of AEAT and Deryn Rees of M&A.
This waste project has now become the first in the UK to be funded by a Council using its prudential borrowing powers and may offer an alternative to authorities across the UK facing increasing budgetary pressures balanced against a need to progress projects for infrastructure (whether schools, transport, hospitals or waste facilities).
M&A partner, Deryn Rees, has said of this unique funding initiative:
“We are delighted to have been instructed by West Sussex County Council on this project and to have worked alongside a dedicated, commercial and forward-thinking Council team who, in the face of changing market conditions, were keen to explore new ways of funding the project and of retaining flexibility in terms of a technical solution. The innovative funding structure of this project is a key development not only in the waste sector but also in the wider PPP market within the UK.”
M&A’s involvement on the project follows previous advice given by M&A’s lawyers on the Council’s Recycling and Waste Handling Contract (“Reclaim Contract”)
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