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Agenda Item No

 

The Vale of Glamorgan Council

 

Cabinet Meeting: 1st October, 2012

Report of the Cabinet Member for Environment and Visible Services

 

Future Procurement of Organic Waste Treatment Post 2015 in Partnership with the City of Cardiff Council

Purpose of the Report

1.             To advise Cabinet on the position of ongoing discussions between officers of this Council and Cardiff Council, in respect to the viability of a joint project for the future treatment of organic waste for the period 2016-2030, in accordance with the Welsh Government’s (WG) preferred treatment method of Anaerobic Digestion (AD).

Recommendations

1.             That Cabinet note the potential arrangements to work in partnership with Cardiff Council on this project, to secure a sustainable, long term organic waste treatment solution.

2.             That Cabinet be provided with a further more detailed report on this matter which includes the Outline Business Case (OBC), for this partnership project.

Reasons for the Recommendations

1.             To permit Cabinet to openly review the potential merits of a partnership with another local authority for the future treatment of its organic waste.

2.             To enable Cabinet to have full access to the relevant financial data from both authorities to allow proper consideration of the business case and to agree, or otherwise the partnership arrangement, whilst also permitting use of the necessary disclosure controls to protect sensitive data from another authority.

Background

2.             The treatment of the Council's organic (kitchen food and green garden) waste has for the last 2 years been via contract with Cowbridge Compost Ltd. of Llwynhelig, Cowbridge, who have also recently become the preferred bidder in the re-procurement  process for the treatment of these wastes from 2012 to 2015, with a possible extension to 2016.  A separate report will be presented to Cabinet in the near future on the appointment of this company as the preferred service provider up to this date.

3.             The treatment method used by Cowbridge Composting Ltd. is 'In Vessel ' composting (IVC), which whilst presently acceptable to WG, does not comply with their preferred strategy of AD.  This presents a risk to the Council should WG decide to support only waste treated via AD.  This could mean that AD treated compost becomes the only accepted method for meeting Local Authority statutory recycling targets.  A further concern is that even if IVC is acceptable, failure to reach 'end of waste quality protocols' (PAS100 accreditation) may result in IVC compost being unacceptable to WG.  The Environment Agency had determined that we are currently not even able to give away the compost produced by our current arrangements due to the failure of the material to meet the stringent quality standards for compost.  Our provider is working to improve this standard but there is no guarantee that this will be successful.

4.             Of the 22 Local Authorities in Wales, 18 are already part of 7 focused AD procurement hubs, the other 4; which include the Vale of Glamorgan, Ynys Mon, Monmouthshire and Wrexham have separate alternative measures in place, such as IVC, to treat their organic wastes.  The table below provides details of the regional 'HUB' arrangements:

 

Hubs

Authorities

Tonnage Requirement

per OBC

North East

 

Conwy

Denbighshire

Flintshire

c. 20 ktpa

 

Central Wales

 

Ceredigion

Powys

c. 10 ktpa

 

Heads of the Valleys

 

Blaenau Gwent

Caerphilly

Torfaen

c. 22 ktpa

 

Tomorrows Valley

 

Rhondda Cynon Taf

Merthyr Tydfil

Newport City

c. 20ktpa

 

South West

 

Bridgend

Carmarthenshire

Neath Port Talbot

Pembrokeshire

Swansea

c. 70 ktpa

 

Prosiect GwyriAD”

Gwynedd

c. 10 ktpa

 

Cardiff (Cardiff City)

(Cardiff) Cardiff City

c. 40 ktpa

 

 

5.             Our specialist waste management officers have been in discussions with their counterparts from Cardiff Council on this matter for some time.  Our officers have advised Cardiff of an interest to work with them on this project subject to it being in the interests of our residents and any decision on a formal partnership being ultimately taken by this Executive.  Cardiff Council have already progressed the procurement via the initial expression of interest stage and have obtained completed pre-qualification questionnaires (PQQ) for an organic treatment facility.  They have also evaluated tenders from Participants' 'invitation to submit outline solutions' (ISOS).  Prior to progressing with the further procurement stages for long term organic municipal waste treatment capacity, Cardiff Council are looking to formalise a possible partnership with the Vale of Glamorgan.  They need confirmation of this Council's willingness to progress in this manner urgently in order for them to commence the detailed solution procurement stage, which they have scheduled for 3rd October 2012.

Relevant Issues and Options

6.             Whilst Cabinet will ultimately be asked to approve an Outline Business Case in order to take an informed decision on any partnering arrangement, this report seeks to advise Members of concerns with our current treatment technology, our vulnerability as regards future grant funding and the fact that most other Councils are involved in regional 'HUB' arrangements based on WG's preferred future technology.

7.             Given WG's stated preference for AD technology, their plans that only wastes that meet 'end use quality protocols' will be allowed to be included within the statutory recycling targets, (whilst not explicit within WG guidance), poses a risk to this Council that our current form of treatment (IVC) will be unacceptable.  It is also possible that the WG Sustainable Waste Management Grant (SMWG), ring fenced for kitchen food waste, may in future exclude paying for IVC treatment.  These possible outcomes were alluded to by WG officers at the WLGA Cabinet Member meeting held on the 5th July 2012.  Although WG’s stance on organic waste treatment is for AD, this does not currently restrict Welsh Local Authorities contracting with alternative technologies such as IVC.  The only current proviso being that the treatment chosen must meet a Council's local requirements.  It should however be noted that the WG grant aid for 'gate fee' is only available to Local Authorities pursuing AD technology for the treatment of their organic waste.

Resource Implications (Financial and Employment)

8.             In order to fully report the Financial implications it will be necessary for our waste officers to prepare a business case for joining this procurement.  This was actioned using Cardiff Council's existing Financial Advisors, Grant Thornton, who provided our officers with the support they needed to fully analyse the business case for it to be proposed for consideration by Cabinet.  The cost of preparing this business case is circa £5k and this will be met from within existing Waste Management and Cleansing Revenue budgets.

9.             Central to the development of the business case is the assumption that WG will provide financial support of 15% of the Net Present Value of the total gate fee cash-flows on completion of a business case review by Cardiff Council, with updated tonnage and cost projections for the overall Partnership Project

10.        Given that it is a condition of WG's Sustainable Waste Management Grant (SWMG) that the Council must comply with all applicable laws or regulations or official directives, whether derived from domestic, EU or international law, there is the possibility that future quality standard protocols for compost (PAS 100 and 110) may result in WG excluding non compliant IVC facilities such as our current contractor from SWMG expenditure.  Whilst it is difficult to fully quantify this risk, the comments made by WG officers, shown in paragraph 7 above, do suggest that the risk is tangible.

Sustainability and Climate Change Implications

11.        Whilst any composting facilities play a part in sustainable resource and waste management when used within an integrated waste strategy prioritising minimisation, reuse and recycling, AD treatment, as well as generating energy from organic waste, is considered by WG to be the technology that has the greater potential to have a more positive impact on climate change.  In addition, it is considered that AD treatment can best help address climate change by reducing greenhouse gas emissions and generating renewable energy.

Legal Implications (to Include Human Rights Implications)

12.        The Vale of Glamorgan Council has been referred to in the OJEU notice issued by Cardiff Council in respect of this procurement exercise and therefore it is open to the Vale of Glamorgan Council to proceed with a partnership arrangement without the need for a further OJEU notice being issued.

13.        Until a final decision is made by this Council to commit or withdraw from this procurement exercise, all interested parties must be formally notified in writing that the Vale of Glamorgan Council has yet to determine whether to proceed.

14.        There are no Human Rights implications with regards to this report.

Crime and Disorder Implications

15.        There are no Crime and Disorder Implications associated with this report.

16.        Any procured AD facility will be designed to incorporate the latest technology in terms of site security and monitoring techniques.  Any facility would also be fully licensed / permitted to operate within all current environmental legislation.

Equal Opportunities Implications (to include Welsh Language issues)

17.        There are no Equal Opportunity Implications to this report.

Corporate/Service Objectives

18.        It is a Corporate Priority to:

To work with partners to develop a sustainable community which maximises opportunities for economic growth social improvement and environmental regeneration and protection.

Improvement Objective 27: To protect and enhance the Vale’s natural and built environment

ACTIONS:

R5 Increase waste recycling rates to 50% and reduce levels of residual waste (2013)

R6 Progress a regional residual waste treatment facility/facilities through Prosiect Gwyrdd (2014).

Policy Framework and Budget

19.        This report is within the policy framework and budget.

Consultation (including Ward Member Consultation)

20.        None for this report.

Relevant Scrutiny Committee

21.        Economy and Environment.

Background Papers

None.

 

Contact Officer

Clifford Parish, Operational Manager Waste Management and Cleansing

Tel No.  02920 673220

 

Officers Consulted

Accountant, Building and Visible Services

Operational Manager Legal Services

Group Auditor Audit

Procurement Officer Audit

 

Responsible Officer:

Miles Punter, Director of Visible Services and Housing

 

 

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