A MASSIVE £165m rubbish-burning incinerator pitched as the future for the county's waste has passed its first test.
Worcestershire County Council this week voted through the incinerator that Herefordshire Council will have to borrow £40m for.
Herefordshire Council is still to debate the borrowing commitment and the final decision lies with the full council. Last month, the council’s cabinet authorised “all necessary steps” to be taken in securing the sum from the Public works Loans Board (PWLB).
That £40m will then be loaned to the council's contract partner Mercia Waste to build the energy from waste
(EfW) incinerator plant proposed for Hartlebury, near Stourport.
The net present cost of the option authorised by cabinet is estimated at £700m over the full asset life of the
Ahead of the cabinet decision, the council's general overview and scrutiny heard that any loan deal should be put off as alternative waste to energy schemes were assessed.
The plant is crucial to a joint waste management contract shared between Herefordshire Council and
Worcestershire County Council (WCC).
Equally cash-strapped WCC would have to lend £125m.
With any kind of Private Finance Initiative (PFI) project effectively ruled out, both councils would provide all debt finance in place of a commercial bank at a commercial bank rate.
Loan costs will be paid by Mercia until the 2022-23 contract close when the site will be handed back to both councils leaving an outstanding loan balance of £31m. Loan repayment costs will continue to be financed from the waste disposal budget until 2040-41.
Mercia will construct, finance and be responsible for the operations and maintenance of the plant.
Proposed by Mercia, the EfW facility was backed by the cabinet in December 2009.
Whitehall gave planning
consent for the plant in July last year following a planning inquiry. The consent requires any development
to start by July next year.
Campaigners claim the plant would damage the environment, prove too costly and could be made redundant by new technology within years.
But both councils believe the plant represents the best value-for-money option in handling up to 200,000
tonnes of rubbish from the two counties that would otherwise go to landfill space set to be full by 2024.