Agenda Item No
The Vale of Glamorgan Council
Scrutiny Committee (Economy and Environment): 15th January, 2013
Report of the Director of Visible Services and Housing
Prosiect Gwyrdd Partnership - Residual Waste Treatment
Purpose of the Report
1. To advise Committee of the progress being made in procuring future residual waste treatment within the Prosiect Gwyrdd Partnership.
1. That Committee note the procurement process to date.
2. That a further report be presented to this Committee in February 2013 advising of the identity of the preferred bidder and the proposed inter-authority agreement between all partners for the contract term.
3. That this report be forwarded to Cabinet.
Reasons for the Recommendations
1. To update Committee on the project as it progresses to the final stages of procurement.
2. To allow this Committee to consider matters further prior to a report on the project being presented to the meeting of Council in March 2013.
3. To update Cabinet and to advise of any comments made by this Committee on this progress report.
2. Prosiect Gwyrdd is a Partnership of five Councils within South Wales involving ourselves, Cardiff, Caerphilly, Newport and Monmouthshire Councils. The Project has completed the 'Detailed Solutions' stage of the procurement process and the evaluation of the bids has confirmed that there are two strong detailed bids. These bidders, Veolia and Viridor, have therefore been invited through to the 'Final Tender' stage with substantial negotiation still to take place on technical, legal, commercial and financial issues. Following closure of this dialogue and final assessment, a Preferred Bidder will be recommended to the constituent Authorities early in 2013.
3. As part of the procurement process the Council initially provided waste profile information to the Prosiect Gwyrdd team (in 2009) to be included within the outline business case. This was reported to Cabinet on the 3 June 2009 and Council on the 30 June 2009 (Min no C463 refers).
The relevant resolutions to this report are as follows:
(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.
4. 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.
5. On 29th February, 2012 Cabinet were advised on the then 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
Cabinet RESOLVED -
(1) T H A T the data and assumptions provided for the Council’s waste tonnage profile as detailed in Annex 1 to the report be approved.
(2) T H A T, in respect of Prosiect Gwyrdd, the Vale of Glamorgan’s Waste Flow Model (Table 2 and Figure 2, Appendix B of Annex 1 to the report) 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 would be issued to the final two bidders be approved
(3) T H A T the Prosiect Gwyrdd Background Note attached as Annex 1 to the report be noted together with 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) T H A T authority be delegated 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 decisions
(1) To ensure that the data and assumptions 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 figures for the continued Prosiect Gwyrdd procurement process.
(4) To allow minor amendments to be made without reference to Cabinet.
Relevant Issues and Options
6. The procurement decisions, whilst 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.
7. The remaining Milestones of the last stages of this rigorous procurement process are as follows:
· evaluation of the two Final Solutions up to December 2012;
· select Preferred Bidder Jan -March 2013;
· reporting preferred bidder to Joint Scrutiny Panel and Joint Committee Jan/Feb 2013;
· final business case to Welsh Government February 2013;
· all 5 Prosiect Gwyrdd Council approvals of preferred bidder March 2013 (Vale of Glamorgan's Council Meeting 6 March 2013);
· contract 'Close' - June 2013
The indicative decision timescale for the acceptance of the 'preferred bidder' it self is as follows:
· Project Board 30 January 2013;
· Public Announcement of the 'preferred bidder' and site location 1 February 2013;
· Joint Committee 7 February 2013;
· Joint Scrutiny Panel 13 February 2013;
· Partnership's Full Council's 26 February to 6 March 2013.
8. Details of the two 'Final Solutions' have now been considered within the Prosiect Gwyrdd Procurement process one of which, subject to the outcome of the prescribed procurement evaluation criteria, will become 'preferred bidder' are as follows:
· 256 K (tonnes per year) EfW Plant in Newport on land previously used by Llanwern Steelworks;
· no planning permission or environmental permit. Initial planning application rejected by Newport City Council, 25 July 2012. Veolia currently considering appealing the decision;
· developing a land occupancy agreement with Tata Steel current occupiers of the land on which they propose to site their plant;
· solution includes combined heat and power CH&P with heat off-take to Tata Steel's premises;
· yet to sign any formal contracts with technology or construction contractors.
· 350 k (tonnes per year) EfW Plant in Cardiff at Trident Park, Splott;
· planning permission and environmental permit granted;
· land occupancy agreement completed with land owner;
· solution does not contain any firm proposal for CH&P with no initial source of heat 'off-take' initially identified;
· signed formal contacts with technology and construction contractors with building work scheduled to commence in 2012 / 2013.
9. The Prosiect Gwyrdd Project Board have to date implemented an extensive communications plan with the first phase focusing on Members of the partnering Councils, including the following 'already completed' consultation and an extensive programme to cover the period following the announcement of the Preferred Bidder;
· The 5 Prosiect Gwyrdd Council Member 'Supporting new Members' Seminars July 2012 (Vale of Glamorgan briefing occurred on the 25 July 2012);
· The 5 Prosiect Gwyrdd Council Member Surgeries October 2012 (Vale of Glamorgan surgery occurred 9 October 2012);
· Public consultation within the 5 partnering authorities, focusing on the two Council with proposed sites have also been planned;
· Drop in sessions within the Council with Preferred Bidder site with representatives of the Preferred bidder in attendance February/March 2013;
· Road-show within Councils where Preferred Bidder site isn't located as close to the proposed site within the Council boundary (Vale of Glamorgan's Road-show will be in Penarth in March 2013).
10. It is proposed that following announcement of the 'preferred bidder' that all Councils will be asked to consider at their Full Council Meetings the following matters:
· The Appointment of recommended Preferred Bidder;
· Approval to sign the Contract (subject to the satisfactory conclusion of any 'fine tuning' during the preferred bidder period);
· Approval to sign the Joint Working Agreement 2 (JWA2);
· Formal approval of the Final Business Case and the Vale of Glamorgan's associated affordability position.
11. In addition to the work being carried out by the Prosiect Gwyrdd Joint Committee and Project Board the Prosiect Gwyrdd Joint Scrutiny Panel has undertaken the following work:
(i) site visits to existing operational Viridor and Veolia EfW plants in Slough and Newhaven respectively on the 24 and 25 January 2012 to study their operation and environmental impact. Given the extensive change in Membership of the Joint Scrutiny Panel since May 2012 these EfW were revisited by the current Joint Scrutiny Panel Members on the 10 and 11 October 2012.
(ii) a 'call for evidence' to investigate the health and environmental concerns associated with EfW. Although the project specification is ‘technology neutral’, the decision to undertake the inquiry was taken as the final two final bidders both proposed EfW incineration solutions. The Panel issued an 8 week call for evidence to targeted stakeholders and the wider public from 8th November 2011 to 3rd January 2012.
The call for evidence asked for responses to the following questions:
· Is there any validated scientific evidence that an EfW plant operating within the UK’s current statutory framework causes harm to human Health and Environmental damage?
· If there are example(s) of validated scientific evidence, what are the causes of/effects on human health and the environment?
In light of the evidence received the Joint Scrutiny Panel made the following recommendations;
· Welsh Government legislate for locality ambient monitoring of airborne particulate matter up to 2.5 parts per million at urban and industrial locations and specifically sites of proposed incinerators. This will allow for baseline monitoring and the impact, of an incinerator to be measured and monitored.
· The health impacts associated with ultra fine and nano particles is a developing area of knowledge. More research is urgently needed to establish the environmental and health impacts of ultra fine and nano particles. The Health Protection Agency, UK Government and WG should take a leadership role and urgently commission research into the environmental and health impacts of ultra fine and nano particles.
· Incinerator emission controls have increased steadily over time. The Project Gwyrdd contract must assume that the emission controls will continue to increase and more effective filtration and monitoring systems will be required. The contract must be flexible enough to accommodate tighter statutory emission controls.
· In response to concerns about fine and nano particulates, the Project Team must ensure the contract specification requires the most effective emission filtration systems available to maximise the removal of particulates from the incinerator’s flue gases. The Joint Scrutiny Panel would welcome discussions with the Project Team about the available options to achieve this.
· The Welsh Government should take immediate action to develop a strategy to reduce the particulate pollution caused by the road traffic, homes, industry and agriculture.
Resource Implications (Financial and Employment)
12. The Prosiect Gwyrdd Procurement is fully financed by the 5 partnering Councils and Welsh Government procurement grant support. It is delivered by a fully resourced Project Team and Project Director to deliver the complex procurement stages and the Vale of Vale of Glamorgan's contribution to overall cost of the procurement from 2007/08 to the end of 2011/12 is approximately £416k. This has been funded from a combination of the Visible Services Maintenance Reserve and also the Waste Management Revenue Budget.
13. Since the project’s inception all partnering Councils have contributed equally to the cost of project revenue expenditure after applying the approved level of grant funding. Partner contributions relating to the acquisition of the optional site are based on a projected tonnage basis rather than an equal share basis.
14. Additional staff time is being spent attending Prosiect Gwyrdd Officer Sub Groups, Project Board Meeting and Members Joint Committee and Scrutiny Panel meetings. These costs are all met through existing Council Revenue Budgets.
Sustainability and Climate Change Implications
15. EfW facilities can play a part in sustainable resource and waste management when used in an integrated waste strategy prioritising minimisation, reuse and recycling as well as generating energy from waste. It contributes to the principles of sustainable development “should be pursued in an integrated way through a sustainable, innovative and productive economy that delivers high levels of employment, and a just society that promotes social inclusion, sustainable communities and personal 'well being' in ways that help protect and enhance the physical environment and optimise resource and energy use.
16. Compared to coal or oil-fired power stations, EfW emits less fossil CO2. EfW facilities actually help to reduce greenhouse gas emissions by diverting waste away from landfill (decomposing waste produces large amounts of the greenhouse gas, methane, which is 20 times more damaging to the environment than CO2). On average the treatment of one ton of municipal waste in an EfW facility results in a carbon saving of at least 232kg (CO2 equivalent).
Legal Implications (to Include Human Rights Implications)
17. A 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.
18. 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 known.
19. 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 is 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 all partnership Councils and will form part of the Common Report that will be considered by all partnership Council's in Feb/Mar 2013 and considered at the Vale's Council Meeting on the 6 March 2013.
Crime and Disorder Implications
20. There are no crime and disorder implications associated with this report.
Equal Opportunities Implications (to include Welsh Language issues)
21. There are no equal opportunity implications as a result of this report.
22. 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.
Improvement Objective 27:
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).
Improvement Objective 33:
To make best use of our assets and to procure good, sustainable services and facilities.
Policy Framework and Budget
23. This report is within the policy framework and budgets though a decision to enter into an agreement with the host authority for the ultimate provision of residual waste treatment will be a matter for decision by Council.
Consultation (including Ward Member Consultation)
24. As the proposed Commitment is Vale wide and there are no solutions proposed within the Vale of Glamorgan no specific consultation has been carried out with Ward Members.
Clifford Parish, Operational Manager Waste Management and Cleansing Tel No. 02920 673220
Accountant, Building and Visible Services
Operational Manager Legal Services
Group Auditor Audit
Miles Punter, Director of Visible Services and Housing