Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 29th February, 2012
Report of the Cabinet Member for Visible and Building Services
Prosiect Gwyrdd Partnership - Waste Profile
Purpose of the Report
1. To seek endorsement and approval for the Council's residual waste contribution to the overall Prosiect Gwyrdd contract waste tonnage profile.
2. To note that the following recommendations are common to reports being taken to the other four individual Prosiect Gwyrdd partners and are worded to reflect approval of all five Executives. A copy of the Common Background Note on Partnership Waste Profile upon which this report is based is attached as Annex 1 to this report.
1. That Cabinet approve the data and assumptions provided for the Council's waste tonnage profile in Annex 1.
2. That Cabinet in respect of Prosiect Gwyrdd approve the Vale of Glamorgan's Waste Flow Model (Table 2 and Figure 2) Appendix 'B' of Annex 1 and the resultant Vale of Glamorgan Contract Waste Profile and associated waste tonnage required for the calculation of the guaranteed minimum payment referred to in Section 5 of Annex 1 and which information will be issued to the final two bidders.
3. That Cabinet note the Prosiect Gwyrdd Background Note attached as Annex 1 and the indicative overall Prosiect Gwyrdd contract waste profile and associated waste tonnages to be used to calculate the guaranteed minimum payment which overall profile / tonnage are subject to each other partnering Council approving their respective waste profile and tonnages.
4. That Cabinet delegate authority to the Director of Environmental and Economic Regeneration as the Council's Business Advisor for Prosiect Gwyrdd in consultation with the Cabinet Member for Visible and Building Services to make minor amendments to the Vale of Glamorgan's contract waste profiles and associated waste tonnages where such amendments are not substantive.
Reasons for the Recommendations
1. To ensure that the data and assumption are acceptable to the Vale of Glamorgan Council.
2. That the Waste Flow Model and the resultant contract waste profile and associated guaranteed minimum tonnage can be used within the overall Prosiect Gwyrdd contract waste profile.
3. To ensure that Cabinet is in agreement to the use of the resultant Prosiect Gwyrdd contract waste profile and associated guaranteed minimum tonnage figure for the continued Prosiect Gwyrdd procurement process.
4. To allow minor amendments to be made without referral to Cabinet.
3. Prosiect Gwyrdd is a Partnership of five Councils within South Wales made up of Vale of Glamorgan, Cardiff, Caerphilly, Newport and Monmouthsire. The Project has completed the Detailed Solutions stage and the evaluation confirmed two strong detailed bids. Veolia and Viridor have been invited through to the Final Tender stage with substantial negotiation still to take place on technical, legal, commercial and financial issues. Following close of dialogue and final assessment the resulting Preferred Bidder will be recommended to the constituent Authorities.
4. The Council initially provided waste profile information to the Prosiect Gwyrdd team in 2009 to be included with the outline business case that was reported to Cabinet on the 3 June 2009 and Council on the 30 June 2009 (Min no C463 refers).
Among the recommendations made were:
(2) T H A T the OBC Health Check Addendum 2009 that represented the revised outline business case for Prosiect Gwyrdd.
(11) T H A T the final commitment that will be required to achieve the recycling and composting levels approaching 65% be approved.
5. Since 2009, Prosiect Gwyrdd has continually monitored the waste arising within each of the partnering Councils and has revised the waste profile data throughout the procurement process. This figure now varies from that initially contained within the 2009 revised outline business case to the extent that it is being reported back to each individual partnering Cabinet to agree that the change from the figure within the initial outline business case is appropriate to take into the final stages of the procurement process.
6. The attached Background Note (Annex 1) updates Cabinet on the current stage of the Prosiect Gwyrdd procurement process and the importance of the contract waste tonnage profile in respect to each partner's Waste Strategy and the impact in respect to the ultimate size of the Prosiect Gwyrdd bidders' proposed facility.
Relevant Issues and Options
7. The quantity of residual waste that the Partnership deliver to the final procured treatment solution will have direct influence on the size of the final proposed treatment facility and final gate fee that the Partnership and individual partnering authorities will pay for the residual waste sent to the facility ultimately provided for the Partnership.
8. Annex 1 discusses the concept of the guaranteed minimum tonnages (GMT) and the consequences of the Partnership supplying this level of residual waste together with the contractual provisions to apply to minimise any potential financial losses. It also considers the use of 'Substitute Waste' sources to mitigate the partnership falling below GMT.
9. It also provided details of the developing Joint Agreement for the contract operation phase (JWA2) of Prosiect Gwyrdd and how it is envisaged falling below GMT would be treated through the JWA2.
10. While Cabinet is being requested to approve the Vale of Glamorgan waste profile, the Prosiect Gwyrdd Project Board will be asked to approve the aggregate 'Contract Waste' profile for the Partnership as a whole.
Resource Implications (Financial and Employment and Climate Change, if appropriate)
11. The procurement decisions, while overseen by the Joint Committee, are being taken forward by an officer Project Board with the support of a fully resourced Project Team and Project Director to deliver the complex procurement stages. Within the lead authority governance model, once the procurement has reached financial close, the benefits and obligations of the contract will be passed back by the lead authority to the other four authorities. Issues around the risk of these arrangements (the lead authority role) are dealt with under legal implications.
12. The Background Note attached at Annex 1 details the potential resource implications if the actual waste delivered varies from the anticipated waste profile. For any tonnage delivered above the waste profile no WG grant would be received therefore making the gate fee per tonne more expensive. It also explains the reasoning for a GMT that Prosiect Gwyrdd will deliver to the contractor. This tonnage is set at 80% of the anticipated waste profile. This in turn will give rise to a guaranteed minimum payment to the contractor. In the event that the tonnage delivered to the facility falls below the GMT then the guaranteed minimum payment is still payable, however it can be viewed as a positive as each Authority will have sufficient budget as budgets will be set assuming that we will deliver the contract waste profile. Also the substitute waste provision in the contract should provide some recompense towards waste which has been paid for but not delivered to the facility.
13. The Background Note also sets out an envisaged key principle for the JWA2. It is proposed that in the event that one (or more) of the partners is below its own GMT but the overall partnership is above GMT there would be no financial consequence to any partner. This will be developed further as the JWA 2 progresses.
Legal Implications (to Include Human Rights Implications)
14. Competitive dialogue procedure is being used with the procurement carried out in accordance with the EU Public Sector Procurement Directive (2004/18/EC). The competitive dialogue process has advantages in that it enables the authorities to enter into dialogue with bidders as to the solutions available to meet their requirements, and disadvantages in that it is a resource intensive process that is costly to both the authorities and bidders. The procurement is presently in the final bidder stage with two bidders Veolia and Viridor having been invited to submit final detailed solutions.
15. As an entity, Prosiect Gwyrdd does not have the legal power to contract with the final successful bidder so the contract will be made with one of the partner authorities (the lead authority) to be decided, when the final location of the successful bidder's plant is to be built is known.
16. The Council has already signed up to a Joint Working Agreement (JWA1) in pursuant to the powers in Section 101 of the Local Government Act 1972, that enshrined in an inter authority joint working agreement, which defines the parties’ responsibilities and obligations during the procurement process. It will be necessary to formally agree to a further joint working agreement (JWA2) which will enshrine the contractual arrangements of the parties’ responsibilities and obligations during the contract stage. It is proposed to report details of the JWA2 to Cabinet at a later date for their approval.
Crime and Disorder Implications
17. There are no crime and disorder implications.
Equal Opportunities Implications (to include Welsh Language issues)
18. There are no equal opportunity implications as a result of this report.
19. It is a Corporate Priority to:
· work with partners to develop a sustainable community which maximises opportunities for economic growth social improvement and environmental regeneration and protection.
· protect and enhance the Vale’s natural and built environment.
· 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
20. This report is a matter for Executive decision by Cabinet.
Consultation (including Ward Member Consultation)
Relevant Scrutiny Committee
22. Economy and Environment.
Clifford Parish, Operational Manager, Waste Management and Cleansing Tel: 02920 673220
Accountant, Visible and Building Services
Operational Manager Policy and Communications
Head of Public Protection
Operational Manager, Legal Services
Rob Quick, Director of Environmental and Economic Regeneration