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Background to the Hartlebury incinerator plans
The Waste Management Services PFI Contract (WMSC) was signed between Herefordshire and Worcestershire Councils and Mercia Waste Management Ltd (Mercia) in December 1998 for 25 years as an “integrated solution” for the disposal of all domestic waste in the two counties.
The Councils' local authority waste disposal company (Beacon Waste) was transferred at the same time to Mercia which took on responsibility for disposing of all 'Contract Waste'.
The Waste Management Services Contract included requirements for; a Mixed Waste Material Reclamation Facility (MRF), Transfer Stations, Pre-Sorted MRF, Household Waste Sites (now Household Recycling Centres), Operations and Management of Hill and Moor Landfill, Construction and operation of a Waste to Energy Plant, Composting facilities.
Mercia duly started the construction of the facilities required under the contract, other than the Waste to Energy Plant which required the land to be secured, planning and other consents.
The contract duly procured in 1998 was based on an Energy for Waste (EfW) solution for dealing with residual waste. Mercia started the process to deliver such an EfW at the British Sugar site in Kidderminster. However, the planning application failed at appeal in 2002.
The Councils and Contractor agreed a "standstill" position whereby the respective rights of the parties to terminate the WMSC as a result of the failure to obtain planning permission for the Kidderminster by the anticipated date was frozen to allow the parties to continue to discuss alternative solutions.
The WMSC continued, subject to its potential termination should the standstill agreement be brought to an end. This standstill agreement has continued to date, but will drop away should a variation to the contract to deliver the EfW Plant at Hartlebury be entered into.
The loss of the anticipated EfW facility to divert residual waste from landfill - as per the contract - meant the Hill and Moor landfill site was filling faster than anticipated under the WMSC with a means of diverting waste from landfill needing to be developed.
Interim arrangements were made by Mercia to dispose of some of the residual waste at EfW plants outside the counties to ease the situation.
Various solutions for the residual waste were investigated including out of county disposal/ treatment and autoclaves. Planning permission was given in 2005 for an autoclave solution at Hartlebury Trading Estate (Worcestershire) and Madley (Herefordshire).
A year later, Worcestershire County Council acquired the land at Hartlebury Trading Estate for the purposes of residual waste disposal, with the intention of developing an autoclave facility there. However, autoclave negotiations with Mercia broke down in 2007 due to the uncertainty about the end market for the process by-product.
A satisfactory end market was a planning requirement. When it became clear that this could not be met with any certainty the autoclave option was not deliverable.
The Joint Municipal Waste Management Strategy (JMWMS) set out a policy approach to disposing of waste including how the councils will manage waste encouraging reuse, recycling and composting.
Any waste remaining is considered residual waste which the strategy says should be treated to recover energy.
Both councils have had success in reducing waste as the government has imposed increasing financial penalties through Landfill Tax. Since 1996 landfill tax has risen from £8 per tonne to £72 per tonne and from April 2014 it will reach £80 per tonne.
The JMWMS was originally adopted in 2004 and the 2009 JMWMS Review included a list of possible options for the treatment of residual waste. Appraisal of these options was carried out by Environmental Resources Management Limited (ERM) and included a financial assessment of Capital and Operational expenditure , costs of the various options for comparative purposes and the different options against environmental criteria.
The Residual Waste Options Appraisal ranked EfW high, particularly with combined heat and power. In September 2009, Herefordshire Council’s cabinet adopted the revised JMWMS and a new policy to increase diversion away from landfill.
Mercia was expected to bring forward proposals for disposing of residual waste in response to the review.
In line with the JMWMS, Mercia proposed an Energy from Waste facility and started a site search that ended at Hartlebury previously acquired for the autoclave facility.
The concept contained in Mercia's EfW proposal - and it progressing to planning – was backed in principle by cabinet in December 2009.
Worcestershire County Council, in consultation with Herefordshire Council, were tasked to negotiate with Mercia, a variation to the WMSC to give effect to the EfW proposal and report back to cabinet should planning permission be obtained.
The Hartlebury site was appropriated for planning purposes relating to the EfW proposal. Mercia then sought planning permission for their proposal.
Worcestershire County Council's Planning and Regulatory Committee considered Mercia's application for planning permission in March 2011 with members "minded to grant planning permission".
As the site is situated in the Green Belt, this provisional decision was subsequently referred to the Secretary of State for Communities and Local Government who subsequently called the application in.
The Secretary of State granted planning consent for the plant in July last year following a planning inquiry. The consent requires any development on site to start by July 2015.
In February last year, cabinet had authorised the negotiation and conclusion of a variation with Mercia to the WMSC to provide the plant subject to certain planning, financial, contractual and technical parameters.
In December last year, the Director of Economy, Communities and Corporate reported to cabinet on the progress of variation negotiations. This report included a refresh by external experts of the JMWMS Residual Waste Options Appraisal which continued to rank EfW highly - with or without CHP.
That same month, cabinet authorised proposals to pursue alternative methods of finance for the plant given the relatively expensive bank debt financing which was being proposed.
Cabinet also authorised the procurement and commencement of enabling works at Hartlebury up to a maximum capital cost of £1.8m, in order to secure the planning permission.
This is at Worcestershire’ risk until the contract variation is agreed at which point the cost will be shared with Herefordshire.
The Director of Economy, Communities and Corporate was asked to report back in 2013 regarding proposals for financing and procuring the EfW plant either by variation of the existing Waste Contract or fresh procurement, to enable Cabinet to take a final decision.
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