West Berkshire Council
I n t e g r a t e d W a s t e
M a n a g e m e n t C o n t r a c t
I n f o r m a t i o n P a c k
We must all reduce the
“amount of waste we
produce, and recycle
as much as we can, for
“
the wellbeing of
everyone, today and
for the future.
March 2004
Contents
1
Introduction
1
1.1
Background
1
1.2
The Local Authority
1
1.3
Key issues for West Berkshire Waste Management
2
1.4
The Council's Corporate Priorities
2
1.5
Sustainable Development
3
2
The West Berkshire Integrated Waste Management Project
2.1
Introduction
4
2.2
Why do we Need to Change?
4
2.3
A Vision for the Future
4
2.4
Delivering the Vision
5
3
Existing Waste Management Arrangements
6
3.1
Historic Waste Arisings
6
3.2
Recycling & Composting
7
3.3
Waste Management Services
9
3.4
Waste Facilities & Contract Arrangements
10
3.5
Waste Facilities
11
3.6
Municipal Waste Composition
11
4
Future Waste Management Issues
12
4.1
Waste Growth
12
4.2
The Legislative Drivers
12
4.3
Views of the Public
13
4.4
Geography & Demographics
14
4.5
Site Availability
14
5
Financial and Contractual
15
5.1
Payment & Performance Mechanism
15
5.2
Risk Allocation
15
5.3
Affordability & Compliance with FRS5
15
5.4
Use of Standardised Contract
15
6
Procurement Process
16
6.1
Introduction
16
6.2
Core Team
16
6.3
Project Steering Group
17
6.4
Decision Making Process
17
6.5
External Advisors
17
6.6
Procurement Schedule
17
6.7
Pre-qualification Questionnaire
18
7
Outline Service Specification
19
7.1
Service Objectives
19
7.2
Targets
20
7.3
Scope of the Services
20
8
Legal Notices
21
Appendices
Appendix I Strategic Waste Management Policies
22
Appendix II Post Contract Risks
24
1
Design Risks
24
2
Construction Risks
25
3
Planning Risks
27
4
Operational Risks
28
5
Residual Value Risks
31
6
Financial Risks
32
7
Performance Risks
32
8
Demand Risks
33
9
Technology & Obsolescence Risks
33
10
Regulatory Risks
34
11
Taxation Risks
35
12
Insurance Risks
35
List of Tables & Figures
Table 3.1.1
Waste Arisings
6
Table 3.1.2
Municipal Waste Arisings
6
Table 3.2.1
Recycling in 2003/04
8
Table 3.4.1
Current Contract Arrangements with Time Frames
10
Table 3.4.2
Additional Operational Arrangements
10
Table 4.2.1
Recycling & Composting Standards for West Berkshire
12
Table 4.2.2
Estimated Tonnages of Biodegradable Waste to be Diverted
from Landfill by West Berkshire Council (based on the
National Average Biodegradable content of 60%)
13
Figure 1
The Project Team
16
1. Introduction
1.1
Background
In 2000, an initial draft Municipal Waste Management Strategy was developed by West Berkshire
Council that identified and analysed a number of future waste management options for the District.
Following consultation and Member approval in January 2001, a waste management option based on
'Maximising Recycling and Composting' was identified as the best practicable way forward for West
Berkshire.
The Government subsequently published new guidance in March 2001, which detailed the content and
structure of Local Authority strategies. Within this guidance, statutory targets for recycling and
composting household waste were published. The Strategy was subsequently updated and the
Municipal Waste Management Strategy for West Berkshire 2002-2022 now meets the requirements of
this guidance and sets out the strategic framework for the management of municipal waste in the district
over the next 20 years.
In June 2003 the Council secured financial support of £23.74 million Private Finance Initiative (PFI)
credits to deliver the long-term objectives of the Waste Strategy. The basis of the PFI is to deliver a
long-term integrated contract which will include a range of waste collection, recycling, composting,
waste treatment and disposal and cleansing services, necessary to deliver the Council's waste
management needs in the medium to long term.
To date the Council has undertaken the following work towards procuring the PFI contract:
engagement of specialist external advisors for technical, legal and financial issues
a project governance structure for Council Officers and Members
a project structure, that will assist an efficient decision making and cost effective
procurement process
investigation into suitable and available land for waste activities
West Berkshire is to hold an Industry Day to present this project on the
21st April 2004. If you wish to
attend please contact: Andrew Deacon, Waste Services, West Berkshire Council, Faraday Road,
Newbury, Berkshire RG14 2AF Tel: 01635 519312, email: [email address].
1.2
The Local Authority
West Berkshire Council is a Unitary Authority created in April 1998 and has responsibilities for waste
collection and waste disposal and as a principal litter authority.
West Berkshire accounts for over half (56%) of the County of Berkshire, encompassing 70,484 hectares
(272 square miles.). 74% of the district lies within the North Wessex Downs Area of Outstanding Natural
Beauty, and borders the counties of Oxfordshire, Wiltshire and Hampshire with Reading Borough
Council and Wokingham District Council to the east.
The main centres of population are in Hungerford to the west, Newbury and Thatcham in the centre,
and Tilehurst and Theale to the east. The district is predominantly rural with the population split
approximately 2:1 between urban and rural. The 2001 census stated that West Berkshire had a
1
population of 144,483 and included 59,583 domestic properties. Predictions are that West Berkshire's
population will increase to 151,982 by 2006 and 155,587 by 2016, with the greatest growth being in the
Newbury and Thatcham areas (9.6%). The east of the district is expected to experience a slight fall in
population during the period to 2006.
1.3
Key Issues for West Berkshire Waste Management
Due to new legislative requirements local authorities can no longer rely on landfill as a main solution for
the management of waste. In tune with Government policies, West Berkshire's Municipal Waste
Management Strategy (2002 - 2022) was developed and a preferred solution for the management of
waste was selected that was built upon sustainability principles of minimising waste and maximising
composting and recycling.
Local landfill sites are nearing capacity and limited opportunities exist in Berkshire for the future
development of suitable landfill sites. Transportation of waste to distant landfill sites will be
environmentally detrimental.
In addition, West Berkshire Council is committed to integrating services to deliver increased efficiency,
service improvements and Best Value. Currently there are separate contracts for the following services:
Refuse Collection, Street Cleansing and Litter Collection Services
Kerbside Recycling Collection and Paper and Card Banks Servicing
Pinchington Lane Civic Amenity Site
Management of the Paices Hill Green Waste and Recycling Centre
Waste Disposal Services
Abandoned Vehicles
Composting of Green Waste
Fridges and Freezers Contract
Cans and Plastics (excluding Paices Hill)
Glass collection
Textiles collection
Tyres
Oil
Asbestos
Special Waste
PFI credits have been awarded to West Berkshire to enable development of the facilities needed to
achieve maximised recycling and composting which will be achieved through an integrated waste
management service.
1.4
The Council's Corporate Priorities
West Berkshire Council fully supports the implementation of an integrated waste management strategy
that aims to maximise recycling and composting. On 25th October 2001 the Executive supported both
the preferred waste management option to maximise recycling and composting, and the
recommendation of an integrated waste contract. Feedback from a public information leaflet in May
2002 endorsed this Member decision.
The Waste Strategy supports a number of West Berkshire Council's Strategic Priorities and the aims of
2
the Community Plan for sustainable development and the protection of the environment.
The Municipal Waste Management Strategy is underpinned by West Berkshire Council's Strategic
Waste Management Policies (SWMPs), in Appendix 1.
1.5 Sustainable
Development
West Berkshire Council's Sustainable Development Policy, states that the Council will encourage and
support a sustainable community through a range of social, economic and environmental measures,
including:
reducing the consumption of raw materials and the production of waste
using water and other natural resources efficiently and with care
promoting an awareness of sustainable development in West Berkshire and
encouraging actions individually and with others in the future to encourage a better
quality of life
continuing to involve people in planning and decision making in West Berkshire and to
consult with people at the right time and increase access to Area Forums
West Berkshire Council is keen to ensure that the principles of sustainable development are taken into
account in the delivery of its waste service.
3
2. The West Berkshire Integrated Waste
Management Project
2.1
Introduction
The Council seeks an Integrated Waste Management Contract that will include all waste activities
necessary to deliver its waste strategy. It is anticipated that the existing waste contracts indicated in
table 3.4.1 will be phased into the integrated contract. It is the Council's intention to award the entire
contract to a single bidder, however the Council reserves the right to award the contract in whole or in
part and reserves the right to award elements separately. The Council reserves the right to let the
provision of disposal and/or treatment separately and to enter into an agreement with the preferred
bidder/appointed contractor to commence provision of the kerbside recycling service prior to the
commencement of the full PFI contract. The Council reserves the right not to award this contract or any
part of this contract.
2.2
Why do we Need to Change?
The Council faces six main drivers, which have encouraged the review of our waste management
systems. These drivers are:
National and local standards for recycling
National standards for the recovery of value from waste
The Landfill Directive
Rises in the rate of landfill tax
Government policy on waste minimisation and
Long standing corporate commitment towards 'improving environmental resource
management'
2.3
A Vision for the Future
West Berkshire Council's vision is for an integrated waste management contract that will enable
maximised recycling and composting. Regardless of the methods chosen to manage the waste
produced in West Berkshire, waste education programmes are to be further developed as a priority with
the aim of reducing waste arisings, maximising recycling and composting and reducing the quantity of
biodegradable waste to landfill.
The concept of an Ecology Village / Resource Park is considered to be important in achieving the
Council's objectives through education and encouraging a higher recycling participation rate. The
Council will be looking to the private sector to propose their own innovative solutions to the Council's
objectives.
In line with West Berkshire's Strategic Waste Management Policies, the Council's vision is for:
more sustainable waste management within West Berkshire
fuller understanding of sustainable waste management issues and practices throughout
the Community
4
full and interactive dialogue with all members of the community on waste management
issues
the reduction and re-use of waste by residents
the reduction and re-use of waste within the Waste Management Service
development of practical initiatives to support waste segregation at source for both
households and businesses
reduction of waste to landfill
management of waste in adherence to the proximity principle
deliverance of Governmental performance standards for waste management
continuous and demonstrable improvement in the quality, sustainability and efficiency of
the waste management services
increased recovery of value from waste.
2.4
Delivering the Vision
The Integrated Waste Management Contract will need to be flexible and deliver continually improving
waste management solution programme for West Berkshire. The Council envisages that this may
include:
public education programme, awareness raising and the promotion of sustainable waste
practices
development of the concept of an Ecology Village / Resource Park to promote public
awareness of waste issues and participation in waste minimisation and recycling
initiatives developed by the contractor
maximising recycling and recovery of waste
increasing composting services to local residents
efficient collection, transport and haulage of waste
management of waste close to source
local use of recyclates
a local depot
a service that ensures the street environment is clean, well maintained and safe
The Council has completed a financial evaluation to determine the likely costs of the Reference Project.
A comparison of the costs of procuring the project by a traditional route, the Public Sector Comparator,
with the PFI Reference Project, has demonstrated that the chosen route offers Best Value to the
Council.
5
3. Existing Waste Management Arrangements
3.1
Historic Waste Arisings
Pro rata1 in 2003/04 West Berkshire generated an estimated 79,973 tonnes of municipal waste. Of this
amount an estimated 78,792 tonnes was household waste. Of the household waste generated 12.2%
was recycled, 4.8% was composted and 83% was landfilled. These figures can be compared to the last
3 years of waste arisings.
Table 3.1.1 Waste Arisings
2000/01
2001/02
2002/03
2003/04
Total Household Waste
(including street
78,924 tonnes
80,104 tonnes
81,210 tonnes
78,792 tonnes
cleansing)
% Composted
11.4%
1.3%
1.8%
4.8%
% Recycled
10.5%
10.8%
12.2%
%Disposed of to landfill
88.6%
88.2%
87.4%
83%
Trade Waste
1,012 tonnes
2,300 tonnes
1,705 tonnes
1,181 tonnes
The Source of the waste generated in 2003/04 is outlined in the table below (again this data is pro rata).
Table 3.1.2 Municipal Waste Arisings
Waste Category
2003/04 Tonnage
Refuse Collection
50,202
Street Sweepings
2,400
Civic Amenity Residual Waste
12,604
Recycleables
9,636
Composting
3,805
Asbestos
10
Inert
103
TOTAL Household Waste
78,792
Trade Waste
1,181
Approximately 1,000 vehicles are disposed of per annum through West Berkshire's abandoned vehicle
service.
1 The 2003/04 data is based upon data from and including April 2003 to December 2003 as data for January, February
and March 2004 has not yet been collected.
6
3.2
Recycling and Composting
West Berkshire Council has an active waste minimisation and recycling programme. This includes:
Waste awareness campaigns that have occurred in West Berkshire since 1999:
1.Compost Awareness Week
2.Green Waste Separation Trial for Composting
3.Real Nappy Campaign
4.Waste Awareness Talks
5.Rethink Rubbish In West Berkshire Newsletter
Waste initiatives that have occurred in West Berkshire since 1999:
1.Maintenance and improvement of Bring Bank recycling centres
2.Maintenance and improvement of CA Site and Green Waste and Recycling Centre
including improved signage
3.Maintenance and improvement of kerbside recycling collection
4.Trial green waste segregation scheme
5.Community Furniture Project
6.Introduction of Community Re>Paint Scheme
In West Berkshire materials for recycling and composting are currently collected through 'Bring Banks',
Civic Amenity Site, a Green Waste and Recycling Centre, and a Kerbside Recycling Collection Service.
Civic Amenity Site
There is one civic amenity site in West Berkshire at Pinchington Lane in Newbury. The Civic Amenity
Site receives the following recyclables: paper, cardboard, plastic, cans, glass, textiles, white goods,
metal, engine oil, car batteries, and tyres. The site also collects asbestos, bulky items, household
waste, DIY waste and white goods and suitable trade waste. There is also currently a trial collection
scheme to pilot work required in the WEEE (Waste Electrical Electronic Equipment) Directive.
The site also has a trial scheme for the separation of green waste. This has increased the recycling rate
at the site from 11% (2002/03) to 25% (03/04). The Council also operates an annual Christmas tree
recycling scheme for composting. Approximately 3,000 Christmas trees were collected through this
scheme in January 2002.
The Pinchington Lane Site is owned by a third party and the Council has no legal interest in this land.
West Berkshire Council has a joint agreement with its neighbouring Local Authority, Reading Borough
Council, that enables West Berkshire residents to use the Island Road Civic Amenity Site in Reading.
The materials collected at this site include: green garden waste, scrap metal, wood, furniture and
appliances, cardboard and paper, vehicle batteries, engine oil, chemicals and paint, textiles, glass
bottles and jars, food and drink cans, plastic bottles and asbestos. It is estimated that 7% of the site's
usage corresponds to West Berkshire's residents, therefore the Authority contributes to a proportion of
the site's running costs and receives an apportionment of the site's overall recycling performance.
7
Green Waste and Recycling Centre
A dedicated Green Waste & Recycling Centre is provided at Paices Hill, Aldermaston. The Centre,
which is adjacent to the Hampshire border, provides through a partnership with Hampshire County
Council, recycling facilities to the residents of West Berkshire and Hampshire. The materials collected at
the site are: green garden waste, paper, cardboard, mixed cans/plastics, textiles and glass (green, clear
and brown).
The green waste collected on-site is currently sent to a composting plant and recycled into soil
improver. The recycled compost is available for purchase on-site.
The Paices Hill Site is owned and managed by West Berkshire Council.
Kerbside Recycling Collection Scheme
A Kerbside Recycling Collection Scheme has operated in West Berkshire since November 1996.
Participation in the scheme is voluntary and is available to all households in the District. Recyclable
material is collected on a fortnightly basis from two 35 litre boxes, one for glass, cans (ferrous and non-
ferrous) and textiles, and one for paper and magazines. In 2002/3 over 5,800 tonnes of materials were
recovered through this scheme. In 2003 a participation survey was conducted. It was found that 44% of
households participated in the kerbside collection scheme. At the end of the current kerbside collection
contract the Council has the option to buy the recycling boxes. All other assets involved in delivering this
service, such as vehicles, belong to the current contractor.
Kerbside collection of recyclables is viewed by the Council as a key service.
Bring Banks
There are 13 bring bank recycling sites in West Berkshire, which cater for the collection of glass, cans,
paper, textiles, and books.
The banks are concentrated in the Newbury/Thatcham area and in the east of the district. The largest
site being located in Calcot. There is an average of 1 recycling bank (site) per 12,000 head of
population which equates to 1:4553 households. Although there is full coverage of the kerbside
collection throughout the district, the number of recycling sites is low with some of the larger parishes
being quite far away from the nearest bring bank sites.
Table 3.2.1 Recycling in 2003/04 (10 months data)
Recycling Scheme
2003/04 Tonnage
Kerbside Collection
5841
Recycling Centres (Bring Banks)
1544
Civic Amenity Site Recycling
3850
TOTAL
11235
8
3.3
Waste Management Services
Refuse Collection
Domestic refuse is collected weekly from approximately 58,000 properties in wheeled bins (120, 240,
360, 1100 litre). The Council has the option to purchase the wheeled bins at the termination of the
current Refuse Collection Contract. Some 2,000 dwellings (flats, isolated properties and accommodation
for the elderly) are provided with plastic sacks which are distributed two times a year.
Disposal Arrangements
All residual household waste collected in the district is currently delivered directly to Hermitage Farm
Landfill, which is located approximately four miles north of Newbury. This contract will expire at the end
of June 2004. Under the new contract starting 1st July 2004 residual household waste will be disposed
of at Sutton Courtenay landfill in South Oxfordshire.
Bulky Items
There is a collection service available to residents predominantly 'free of charge' for bulky household
items which is provided as part of the Refuse Collection, Street Cleansing and Litter Collection contract.
This includes items such as furniture, fridges, freezers, washing machines, or other household
appliances. This service does not accept garden waste, fixtures or fittings, or DIY waste.
Clinical Waste
West Berkshire Council has a responsibility to arrange for the collection and disposal of clinical waste
that is classified as household waste. A separate weekly collection service is provided for household
clinical waste from selected properties (approximately 40 properties a week). All clinical waste is
presented for collection in securely tied clinical waste sacks, which are distributed by the contractor, and
the clinical waste is then transported to a clinical waste incinerator. Currently clinical waste collection is
run as part of the Refuse Collection, Street Cleansing and Litter Collection Services Contract.
Abandoned Vehicles
West Berkshire has responsibility for the majority of abandoned vehicles in the district. West Berkshire
has implemented a free of charge removal scheme for unwanted vehicles to discourage the
abandonment of vehicles
9
3.4
Waste Facilities and Contract Arrangements
Table 3.4.1 Current Contract Arrangements with Timeframes
Contract
Term
End
Refuse Collection, Street Cleansing & Litter
2 extensions possible of
Collection Contract
September 2006
up to 2 years each
(Biffa)
Waste Disposal Services Contract
2 extensions of up to 2
July 2007
(WRG)
years each
Kerbside Recycling Collection (including
September 2003
Up to September 2005
certain Paper and Card Banks) (Biffa)
Pinchington Lane CA Site (Biffa)
September 1988
September 2008
Paices Hill Green Waste Service
(Joint working arrangement with adjacent Local
31st March 2004
Extendable by agreement
Authority)
Paices Hill Green Waste and Recycling Centre
2 extensions of up to 1
April 2006
Management. W&S Recycling
year each
Fridges and Freezers
September 2005
September 2007
(Weymouth and Sherbourne Recycling)
Textiles - CA Site, Paices Hill and Bring Centre
Periods of 6 months for
31 March 2005
(The Clothing Warehouse)
up to 2 years.
Trial scheme segregation
Green Waste Composting
of Green Waste from
September 2004
(Sheepdrove Organic Farm)
Pinchington Lane. Trial
under review.
Abandoned Vehicles
Six monthly increments
31 March 2004
(Rawlings)
for a maximum of 2 years
Table 3.4.2 Additional Operational Arrangements
Operational Agreement
Term
Asbestos - CA Site (Biffa)
As required
Special Waste - CA Site (Biffa)
As required
Oil (Greenways Orcol)
As required
Paper Bank (Sita, Sainsburys, Calcot)
As required
Cans and Plastics at Paices Hill (Grundons)
As required
Glass Collection (Berrymans and Thamesdown Glass)
As required
Can and Plastics (exc Paices Hill), (Grundons & Kan a Can)
As required
Textiles and books, Charity Banks - Oxford and Traid
As required
10
The Council would consider the possibility of including the collection of waste from schools within the
District in this contract. There are approximately 84 schools in the District which each operate devolved
budgets under fair funding.
3.5
Waste Facilities
The Council owns the freehold of the Green Waste and Recycling Centre at Paices Hill, Aldermaston,
and a small municipal depot at Pound Lane, Thatcham. The Civic Amenity site at Pinchington Lane,
Newbury, and landfill sites at Hermitage and Sutton Courtenay are owned by third parties and the
Council has no legal interest in these pieces of land.
The refuse collection vehicles, wheeled bins distributed after 27th September 2003, and kerbside
recycling baskets are all owned by the incumbent contractor. The Council has the option to purchase
wheeled bins distributed since 27th September 2003 and the kerbside recycling baskets distributed
under the current contract. The Council owns all the wheeled bins distributed prior to the 27th
September 2003.
3.6
Municipal Waste Composition
A household waste composition analysis was undertaken in 1998 and more recently in February 2002.
From these analyses it appears that there are differences between West Berkshire's waste composition
and the typical composition for the UK. The content of paper and card, dense plastics, and
miscellaneous combustibles is significantly higher in West Berkshire in comparison to the national
average, and the content of ferrous metals and fines is significantly less. Disposable nappies are
classified as miscellaneous combustibles but on their own comprise 3.4% of the total household waste
stream, which is in line with the national average of 4%. The putrescible category is made up of kitchen
waste (12.9%) and green garden waste (10.3%). Due to the nature of household waste, variations in
waste composition are common - such variations can be seasonal, annual, and geographical.
West Berkshire Council will be undertaking further waste composition analysis. These analyses will be
undertaken on a seasonal basis (four a year) for two years. It is expected that the first of these
composition analyses will be undertaken in April 2004. The composition analyses will be made available
to tenderers
11
4. Future Waste Management Issues
There are several key issues that will influence future waste management in West Berkshire. The key
items are listed below:
Waste growth
Legislation
Views of the Public
Geography and demographics
Site availability
4.1
Waste Growth
Historically waste generation has been subject to growth. For West Berkshire's Municipal Waste
Management Strategy the growth in waste was predicted by the population change and housing
development.
In the period between 1981 and 1998, 13,100 dwellings were built, which contributed to an increase in
population from 119,750 in 1981, to 143,400 in 1997, which is a rise of 19.7% (1.23% per annum). The
London Research Centre has predicted West Berkshire's population to rise to 151,982 in 2006 and
155,587 in 2016.
The growth in population was predicted within the Strategy to slow to approximately 0.3% per annum
from 1.23% per annum, but a similar reduction in the growth rate of household waste arisings is unlikely
in the short term due to a number of factors such as the trend towards smaller households and single
occupancy (e.g. each household receives the same "junk mail" irrespective of the number of occupiers).
4.2
The Legislative Drivers
There are many national and European legislative drivers influencing the future management of waste
within West Berkshire. The key legislative drivers include:
(a) Best Value Performance Indicators.
Table 4.2.1 Recycling and Composting Standards for West Berkshire
Authority
2003/04 Standard (%)
2005/06 Standard (%)
West Berkshire Council
20
30
Source: DETR, Guidance on Municipal Waste Management Strategies, March 2001
12
(b) The Landfill Directive
Table 4.2.2 Estimated Tonnages of Biodegradable Waste to be Diverted from
Landfill by West Berkshire Council (based on the National Average Biodegradable
content of 60%)
Target
Growth rate of municipal waste (% / year)
2% reducing to 0.5% after2010 2%
3%
4%
Tonnes BMW to be diverted from landfill
To meet 2010 target
19,982
22,830
28,902
35,528
To meet 2013 target
32,971
38,595
47,098
56,650
To meet 2020 target
42,289
55,228
70,789
89,502
(c )
Rises in the rate of landfill tax.
(d)
The Waste Minimisation Act 1988 and Government policy on waste minimisation.
(e)
The Waste and Emissions Trading Bill introducing a system of tradeable permits
designed to reduce the amount of biodegradable waste going to landfill.
(f)
The Household Waste Recycling Bill (which has received Royal Assent).
(g)
The Waste Electrical and Electronic Equipment Directive.
4.3
Views of the Public
Public consultation is a key requirement identified in Municipal Waste Management Strategies and Best
Value. This is essential in waste management development in West Berkshire. In 2000, West Berkshire
undertook an information awareness exercise on the future waste management options for the District.
This involved workshops, presentations and meetings with technical officers from nearby local
authorities, the waste management industry, Environment Agency, and Council Members.
In May 2002 a Waste Information Leaflet was produced and distributed to over 60,000 residential and
commercial properties within West Berkshire. The leaflets were also displayed in public libraries and
Council offices throughout the district, as well as being distributed to local interest groups such as LA21
and TV Energy.
The feedback from the Public Information leaflet provided by West Berkshire Council on the future of
waste management in the district, proved invaluable, particularly regarding recycling and composting.
The response endorsed the Council's option of maximising recycling and composting.
The Council is preparing a detailed communication plan, which identifies key stakeholder groups,
project milestones and communication mechanisms.
13
4.4
Geography and Demographics
The implications of West Berkshire's geography, demographics and socio-economic characteristics on
waste management are summarised below:
1. The historical trends and future projections of population growth and increases in household
numbers, along with a trend towards smaller households and single occupancy, have important
implications for future household waste arisings in West Berkshire.
2. A significant proportion of the population (67%) is resident within urban areas which means that
the majority of household waste arisings are concentrated in a defined area.
3. The rural population within the district is spread out at low densities. Although the main road
network in the district is relatively well developed, much of the district is served by narrow
country lanes.
4. High car ownership rates (83% of households having a private car, and 47% of households
having two or more cars) suggest that gaining access to recycling centres and 'Bring' sites
should not be a significant issue for West Berkshire residents. 'Bring' sites can be made more
accessible if they are located on journey routes such as supermarket sites.
5. The nature of the housing stock is suitable for the promotion of home composting and the
further development of the kerbside collection system.
6. The large number of properties with gardens in the district is likely to result in a high proportion
of green waste during the growing season.
7. Unemployment in the district is low (unemployment rate averaging 0.7% in the district).
Additional social benefits from the development of waste management infrastructure, in terms of
job creation, may not be a critical area of importance for West Berkshire. With current contracts
it is recognised that Contractors have difficulty in appointing staff due to the low unemployment
8. Seventy four percent of the district is designated as an Area of Outstanding Natural Beauty. The
policy on the AONB is to favour conservation of the natural beauty of the landscape, visual
quality and amenity of the area. No major development, or development which would materially
harm the landscape character, be unduly prominent or detract from important views of the
AONB will be approved. Sites with development potential for waste management infrastructure
are therefore limited.
4.5 Site
Availability
West Berkshire Council undertook a survey of potential waste sites in the district. Further detailed work
is being done on the sites arising from this exercise.
West Berkshire Council is keen to encourage competition and ensure a level playing field is available to
all contractors. It will therefore complete necessary preliminary investigations on potential sites in the
area. A number of possible configurations of infrastructure provision exist and the Council does not wish
to preclude any proposals at too early a stage
14
5. Financial and Contractual
5.1
Payment and Performance Mechanism
The payment mechanism for the contract will be developed by the Council and issued as part of the ITN
(Invitation to Negotiate) documentation. The objective of the payment mechanism will be to incentivise
the private sector to meet the requirements of the Council's Output Specification. The Council intends to
utilise the standard payment mechanism contained within the 4Ps Waste Management Procurement
Pack, and where appropriate, modify it to reflect local circumstances. It is envisaged that:
payment will reflect the extent to which the private sector meets the Output Specification
payment will be subject to increases for indexation
the Council will compensate the private sector for increases in the rate of landfill tax
(provided that performance targets are met)
payment will be subject to deductions in the event of private sector performance below
contracted levels
5.2 Risk
Allocation
West Berkshire Council is committed to the approach that risk should be allocated to those parties best
placed to manage it and who are therefore committed to ensuring that the private sector has sufficient
ownership, responsibility and control of the service by the transfer of appropriate risk.
The Council has undertaken a detailed examination of the likely risks entailed in the service and has
included a Risk Matrix and indicative risk allocation at Appendix II.
5.3
Affordability and Compliance with FRS 5
The Council will assess the affordability of the project by comparing, on an annual basis, the available
revenue financing resources with the PFI charges over the period of the contract. The sources of
revenue funding will comprise the current and forecast waste management budgets and the additional
government grant payable to the authority relating to the PFI credit (Notional Credit Approval) allocated
by DEFRA. The value of the NCA is in the region of £25 million and is subject to the eventual level of
capital investment within the project (on a discounted basis), and subject to the contract complying with
DEFRA requirements including off-balance treatment for the Council under FRS5. The Council intends
to issue an affordability guideline as part of the ITN documentation.
5.4
Use of Standardised Contract
The Office of Government Commerce standard contract will be used by West Berkshire Council for this
contract. The standard contract will be tailored as appropriate to reflect project specific requirements
(e.g. payment and performance system, planning and legislative risk) and waste specific contract
guidance to be issued shortly as part of the 4Ps Management and Procurement Pack
15
6. Procurement Process
6.1 Introduction
The project reporting/ communications structure is described in the organisational chart below (figure 1.)
Fig 1. Project Team
PFI Reporting Structure
John Ashworth
Project Sponsor
Bill Jennison
Project Director
PFI Project Manager
Andrew Deacon
External Technical
Senior Waste Project
Legal Project Officer
Financial Project
Project Officer
Consultants (Entec)
Officer TBA
Jo Gread
Officer John North
Amy Quinn
External Legal
External Financial
Waste Project Officer
Consultants
Consultants
Andrew Davis
Bevan Ashford
Ernst & Young
PFI Project Administrator - TBA
With other Members and Council Officers, the project team sit within the following groups:
Core Team
Project Steering Group
Waste Management Task Group
External Advisory Group
6.2
Core Team
The role of the Core Team is to undertake the day to day management of the PFI Project and to
produce the main body of work. Members include:
Title
Role within PFI
Head of Countryside and
Bill Jennison
Project Director
Environment
Waste Services and PFI Project
Andrew Deacon
Project Manager
Manager
Jo Gread
Contracts Solicitor
Internal Legal Advisor
Andrew Davis
Waste Project Officer
Waste Project Officer
Technical Advisor - seconded
Amy Quinn
Project Officer
(Entec)
John North
Financial Consultant
Internal Financial Advisor
Jude Tuck
Policy Executive
Internal Policy Advisor
16
6.3
Project Steering Group
The Project Steering Group exists to provide a Corporate overview in the management of the PFI
project.
John Ashworth
Corporate Director (Environment & Public Protection)
Martin Cawte
Head of Resources and Commissioning (S. 151 Officer)
David Holling
Head of Legal and Electoral Services
Bill Jennison
Head of Countryside and Environment
6.4
Decision Making Process
The Waste Management Task Group will be the key forum for engagement between the operational and
strategic dimensions of the governance process of the PFI. The Waste Management Task Group is a
politically balanced group of six Members tasked with considering all aspects of the future of waste
management in West Berkshire. The Constitution has been amended to improve the efficiency of
decision-making by granting further delegated authority to named Officers and members.
6.5 External Advisors
Consultancy
Role
Ken Rigby
Entec
Technical Advisor
Phil Scott
Entec
Technical Advisor
Nigel Campbell
Bevan Ashford
Legal Advisor
Susie Smith
Bevan Ashford
Legal Advisor
Rob Winchester
Ernst & Young
Financial Advisor
Stephen Smith
Ernst & Young
Financial Advisor
6.6 Procurement Schedule
This is the project timetable.
Official Journal of the European Union (OJEU) notice
31 March 2004
dispatched
Industry Day
21 April 2004
Return of PQQ
2 June 2004
Distribution of ISOP's documentation
9 July 2004
Issue ITN
15 October 2004
Return of ITN
20 January 2005
Selection of preferred bidder
3 June 2005
Contract Award
2 December 2005
Contract Commencement
1 April 2006
17
6.7 Pre-qualification
questionnaire
A copy of the PQQ is obtainable from Andrew Deacon, PFI Project Manager, Council Offices, Faraday
Road, Newbury, RG14 2AF. Alternatively the following email may be used: [email address].
Instructions for completing and submitting the PQQ are contained in the PQQ.
An expression of interest is by completion and return of the pre-qualification questionnaire which must
be received no later than 4pm on the 2nd of June 2004.
Requests for clarification on any matter within the OJEU, Information Pack and / or PQQ are to be
submitted to Andrew Deacon via email [email address]. Responses to all clarification
questions will be issued by 21 May 2004 to all providers who have requested a PQQ.
18
7. Outline Service Specification
7.1
Service Objectives
7.1.1 The Council's overall objective is to develop an integrated and affordable waste management
service, that fulfils its statutory requirements, meets local waste management policies and targets
and develops municipal waste as a resource, thereby maximising environmental, social and
economic benefits.
7.1.2
Therefore, the Council wishes to:
enhance waste awareness within West Berkshire in a way that promotes social responsibility
for the waste that the community generates and thereby promotes minimisation
reduce waste growth
ensure that litter is collected and streets cleansed to a high standard in an efficient manner
collect municipal waste and recyclable/compostable materials in an efficient and integrated
manner that facilitates recycling and composting and resource recovery
increase the level of re-use
significantly increase the level of recycling
enhance the level of bio-treatment for organic wastes and facilitate the production and use of
compost and soil improvers derived from waste
maximise resource potential from the residual waste stream
minimise the landfilling of biodegradable waste
build a platform within West Berkshire for the use of recyclates and secondary materials
derived from waste
7.1.3 The Council is seeking solutions for a sustainable resource-focused solution that represents the
Best Practicable Environmental Option (BPEO). We expect that this will exceed the UK's statutory
recycling performance standards under Best Value. We will aim to reduce the landfilling of
biodegradable municipal waste.
7.1.4 The Council wants a customer and community focused service underpinned by the principles of
continual improvement. The Council has secured financial support for the scheme under the UK
Government's Private Finance Initiative and it is one of the conditions of the provision of PFI
credits that challenging targets are met. Service solutions must retain sufficient flexibility to
respond to future changes in recycling and composting performance standards or targets, and to
take on board technology changes, therefore continuing to develop best practice.
7.1.5 Services are to be provided in a manner consistent with the strategic framework set out by the
Council's Waste Local Plan, the Municipal Waste Management Strategy and the relevant
requirements for the management group of municipal waste required under UK and EU
legislation, directives, regulations and guidance. The Waste Local Plan for Berkshire is currently
under review. There will be initial stakeholder and community consultation in Spring 2004
followed by two further consultation periods in October 2004 and February 2005. Formal
submission of the new plan is expected to be in August 2005 and the current target for adoption
is December 2005.
19
7.2
Targets
7.2.1 The contract must achieve a reduction in the landfill of biodegradable municipal waste consistent
with the requirements of the EU Landfill Directive. Article 5 sets three progressive targets to
reduce the amount of biodegradable waste sent to landfill stating that:
by 2010 the volume of biodegradable municipal waste (BMW) must be reduced to
75% of the total BMW (by weight) produced in 1995
by 2013 the volume of BMW must be reduced to 50% of the total BMW (by weight)
produced in 1995
by 2020 the volume of BMW must be reduced to 35% of the total BMW (by weight)
produced in 1995
7.2.2 In order to meet DEFRA's conditions for the approval of PFI waste schemes, the Council is also
seeking for the service to achieve a minimum of 54% recycling and composting rate for contract
waste by 2020.
7.3
Scope of the Services
The services should include:
the collection of municipal waste within West Berkshire including the collection of segregated
recyclable and compostable materials. The service provider will be required to deliver all
facilities equipment and manpower required to deliver this service.
the collection of litter and provision of street cleansing within the district. The service provider
will be required to deliver all facilities equipment and manpower required to deliver this
service.
the finance, design, build and operation of waste management facilities required for
provision of the service. This may include the acquisition of sites, and the obtaining, keeping
and maintaining of all relevant planning consents, waste management licenses and any
other permits or consents relating to the service.
arranging for and making available facilities and disposal points for the reception, keeping,
treatment and disposal of contract waste.
the provision, management and operation of civic amenity sites or the receipt, re-use,
recycling, treatment and disposal of waste, fulfilling the Council's duties under the
Environmental Protection Act 1990.
suitable provision at household recycling centres for the safe deposit of hazardous
household waste, and the provision of delivery points for hazardous household waste
collected by the Council or their agents.
the management and facilitation of storage, treatment, reprocessing, marketing, removal,
transportation and disposal of waste, products and residues.
design and implementation of measures to educate and raise awareness of sustainable
waste practices.
the design, planning, delivery and operation/management of an educational and Ecology
Village Resource/Park within West Berkshire that is designed to enhance waste awareness
within the local community, promote waste minimisation and facilitate the local use of
recyclates and secondary products derived from waste.
the delivery of a management information system to monitor performance, and manage and
report improvements.
the degassing, collection and disposal of the fridge and freezer units.
the provision of bring sites for materials for recycling and green waste for composting.
collection, treatment and disposal of vehicles within West Berkshire.
20
8. Legal Notices
The Information Pack and PQQ have been prepared by West Berkshire Council for the purpose of
providing an application procedure for Bidders interested in tendering for the waste management project
under the UK Government's Private Finance Initiative (PFI), and to assist the Council in making its own
evaluation of the potential opportunity to enter into a contractual relationship for the provision of such
services.
By receiving this Information Pack and PQQ, the Bidder agrees to keep confidential the information
contained in the documents or made available in connection with any further enquiries. The Information
Pack and PQQ may be made available to the Bidders' employees and professional advisors directly
involved in the appraisal of such information. The Information Pack and PQQ shall not, either in whole
or in part, be copied, reproduced, distributed or otherwise made available to any other party in any
circumstances without the prior written consent of the Council, nor may it be used for any other purpose
than that for which it is intended.
The Information Pack is intended only as a preliminary background explanation of the Council's
activities and plans and is not intended to form the basis of any decision on whether to enter into any
contractual relationship with the Council. The Information Pack does not purport to be all-inclusive, nor
to contain all of the information that a prospective Service Provider may require.
Neither the Council, its technical, financial or legal advisors or any other advisor (or the directors,
officers, members, partners, employees, staff, agents or advisors of any such person):
Makes any representation or warranty (express or implied) as to the accuracy,
reasonableness or completeness of the Information Pack. Any persons considering making
a decision to enter into contractual relationships with the Council following receipt of the
Information Pack should make their own investigations and their own independent
assessment of West Berkshire and its requirements for services associated with the project,
and should seek their own professional technical, financial and legal advice.
Accepts any responsibility for the information contained in this Information Pack or for its
fairness, accuracy or completeness. Nor shall any of them be liable for any loss or damage
(other than in respect of fraudulent misrepresentation) arising as a result of reliance on such
information or any subsequent communication. Only the express terms of any written
Contract relating to the subject matter of this Information Pack, as and when it is executed,
shall have any contractual effect in connection with the matters to which it relates.
Will be liable for any costs incurred by any Bidder responding to the PQQ, whether incurred
by them directly or their advisors or sub-contractors.
The publication of this Information Pack in no way commits the Council to award any Contract under the
Private Finance Initiative or pursuant to any tender process.
21
Appendix I: Strategic Waste Management Policies
SWMP 1
West Berkshire in partnership with parish councils, community groups and other Agencies
will seek to deliver a programme of awareness, promotion and publicity to encourage a
fuller understanding of sustainable waste management issues and practices throughout the
community.
SWMP 2
West Berkshire will seek to engage in a full and interactive dialogue with all members of
the community on waste management issues within West Berkshire. In doing so the
Council will endeavour to ensure that all opinions are duly expressed and fully considered
as part of any decision making process. The Council will ensure that the process of making
such decisions is open and fully transparent to all in West Berkshire.
SWMP 3
West Berkshire will enter in to and maintain meaningful dialogue with the Environment
Agency, nearby local authorities and other Agencies on the development of future waste
management solutions for West Berkshire to ensure that our strategy and plans are both
consistent and pragmatic in a Regional context.
SWMP 4
West Berkshire in conjunction with the Environment Agency, other local authorities and
other parties will encourage the reduction and re-use of waste. This will form an objective
of a promotional and awareness programme focused on waste.
SWMP 5
West Berkshire shall establish a leading example within our community by examining how
it purchases, uses and manages materials in the course of its normal activities. The
objective of this work will be to identify ways of reducing consumption and preventing
waste production, using where practicable, environmentally superior materials and
employing more sustainable practices.
SWMP 6
West Berkshire will establish a programme of waste minimisation, re-use, recycling of
waste materials in respect of its own functions and the services it provides.
SWMP 7
West Berkshire will establish a challenging series of targets for minimising the municipal
waste it collects from the community. The Council will seek to forge partnerships with
parish councils and community groups with a view to establishing common aims and goals
in this respect.
SWMP 8
West Berkshire believes the first and most meaningful target for waste minimisation in the
short term, should be reducing waste growth in West Berkshire. Subsequent targets will be
set following regular periodic review and should seek to achieve more significant
reductions in waste generation.
SWMP 9
In consultation with the Environment Agency, nearby local authorities and other Agencies
and having regard to material planning considerations, West Berkshire will promote the
development of new and existing facilities for waste transfer, recycling and composting
provided that:
these facilities are developed as part of an integrated network to deliver West
Berkshire's needs and contribute to Regional self sufficiency;
the facilities are consistent with the aims and objectives of the waste management
strategy for West Berkshire;
there is demonstrable need for the facility.
22
SWMP 10
West Berkshire will develop practical initiatives to support waste segregation at source in
the household and encourage similar initiatives in business premises.
SWMP 11
West Berkshire in partnership with the Environment Agency, community groups and others
encourages recycling and composting at home and in the workplace.
SWMP 12
West Berkshire is committed to movement towards more sustainable waste management
practices. It will seek to influence such change wherever it can and particularly through the
exercise of its statutory functions.
SWMP 13
In respect of current Government guidance on sustainable development and waste
management, West Berkshire considers the progressive development of more sustainable
waste management practices to be a legitimate strategic goal to be achieved over the
short, medium and long term.
SWMP 14
Through the implementation of its waste management strategy and future contracts, West
Berkshire will seek to reduce progressively the amount and proportion of West Berkshire's
municipal waste being disposed of to landfill. In so doing West Berkshire will seek to divert
municipal waste towards more sustainable waste management practices which lie higher in
the waste management hierarchy.
SWMP 15
West Berkshire supports the proximity principle and the concept of regional self- sufficiency
in respect of waste management facilities. Wherever it is consistent with the best
practicable environmental option available, West Berkshire will endeavour to ensure that
the waste produced by our community is managed and dealt with within West Berkshire, or
failing this the Region, wherever this is possible.
SWMP 16
West Berkshire will not normally support the export or import of waste from the Region for
treatment or disposal unless circumstances demonstrably show that this is the best
practicable environmental option.
SWMP 17
In working towards more sustainable waste management West Berkshire will seek through
the implementation of its strategy, to deliver statutory Government performance standards
for waste management.
SWMP 18
West Berkshire will seek to deliver continuous and demonstrable improvement in the
quality, sustainability and efficiency of the waste management services it delivers.
SWMP 19
Through the implementation of future waste management contracts, West Berkshire will
encourage its future contractors to be proactive and innovative in identifying areas for
delivering service improvement and achieving its core policies and goals.
SWMP 20
In line with Government targets for waste recovery, West Berkshire will look to recover
more value from waste as part of its waste management strategy over the medium to long
term. The Council will maintain a watching brief on the technologies available for this
purpose and seek to engage in partnerships with others where this can deliver the best
practicable environmental option in a way which is consistent with best value.
23
Appendix II : Post Contract Risks
1. Design Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
Failure to translate the needs of
Failure to design to brief
the Council into the design.
The detail of the design should
be developed within an agreed
Continuing development of
framework and timetable. A
design
failure to do so may lead to
additional design and
construction costs.
The Council may require
changes to the overall service
Change in project content by
specification - additional design
the Council
and construction costs may be
incurred.
This is the risk that the operator
Change in design required by
will require changes to the
operator
design, leading to additional
design costs.
There is a risk that the designs
will need to change due to
Change in design required due legislative or regulatory changes.
to external influences
Planning issues and constraints
may also lead to design
changes.
Misinterpretation of design or
failure to build to agreed
Failure to build to design
specification during construction
(including life expectancy)
may lead to additional design,
construction or operational costs.
24
2. Construction Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
The time taken to complete the
Incorrect time estimate
construction phase may be
different from the estimated time.
Unforeseen ground/site
Unforeseen ground/site
conditions may lead to variations
conditions on new sites
in the estimated costs.
A delay in gaining access to the
Delay in gaining access to sites sites may put back the entire
already in Council's ownership
project.
A delay in gaining access to the
Delay in gaining access to sites sites may put back the entire
not in Council's ownership
project.
Availability of services/
The unavailability of site and
infrastructure etc. to provide
utilities.
service
Theft and/or damage to
equipment and materials may
Theft of/damage to
lead to unforeseen costs in terms
equipment/materials
of replacing damaged items, and
delay.
The Construction, Design and
Responsibility for maintaining
Management (CDM) regulations
site safety
must be complied with.
The risk refers to the costs
associated with third party claims
Third party claims
due to loss of amenity and
ground subsidence on adjacent
properties.
An event of this kind may delay
or impede the performance of the
"Compensation Events"
contract and cause additional
expense.
An event of this kind may delay
or impede the performance of the
"Relief Events"
contract and cause additional
expense and lead to time
extension.
In the event of Force Majeure
additional costs will be incurred.
Force Majeure
Facilities may also be
unavailable.
25
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
There is a risk that an event of
Termination due to Force
Force Majeure will mean the
Majeure
parties are no longer able to
perform the contract
In the case of main contractor
Main contractor default and
default, additional costs may be
sub-contractor cost for over-
incurred in appointing a
runs
replacement, and may cause a
delay.
There is a risk that poor project
management will lead to
additional costs. For example, if
Poor project management
sub-contractors are not well co-
ordinated, one sub-contractor
could be delayed because the
work of another is incomplete.
Meeting the requirements of
planning conditions may also
Planning
have implications on project
costs and timescales.
Industrial action may cause the
Contractor/sub-contractor
construction to be delayed, as
industrial action (relief event)
well as incurring additional
management costs.
Protester action against the
Politically motivated protester
development may incur
action
additional costs, such as security
costs.
Protester action against the
Protester action caused by
development may incur
actions of Private Sector
additional costs, such as security
operator
costs.
(i) The estimated cost of
commissioning new plant may be
Incorrect time and cost
incorrect, there may also be
estimates for commissioning
delays leading to further costs
new plant
including interest rates:
(ii) Delays caused by local
authorities.
The construction/ development
could be delayed by
Archaeological, ground and
archaeological/ antiquities issues/
ecological issues
contaminated land, ecological
issues and drainage.
26
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
Sub-contracted out work may be
delayed due to availability of sub-
Availability and standard of sub- contractors' resources or if below
contractors
the required quality where
undertaken by sub-standard
contractors.
The materials used in the
Sub-standard materials
construction may not be of
sufficient/adequate quality.
The risk that land costs for
Land acquisition cost risk
facilities are higher or lower than
forecast.
3. Planning Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
Cost and submission of planning
process up to initial
Planning submission
determination by Planning
Authority.
Cost of appeal or other
Appeal
proceedings (above defined cap)
Cost of compliance with
Planning conditions (i)
reasonable planning conditions.
Cost of compliance with
Planning conditions (ii)
unreasonable planning
conditions.
Cost and timing of planning
Planning determination
determination.
Judicial Review
Cost and timing of judicial review.
27
4. Operational Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
Disposal of surplus operational Surplus operational plant and
plant and equipment at the start equipment may be expensive to
of PFI contract
de-commission and dispose of.
Existing operational plant and
equipment transferred by the
Council at the start of the PFI
"Fitness for purpose" of any
concession might prove to be
operational plant and equipment inoperable and expensive to
transferred from the Council to
replace. Any incoming PFI
an incoming PFI contractor at
contractor would be allowed to
the start of a PFI contract
do their own survey of this
equipment before electing to use
the equipment.
Latent defects appear in the
Latent defects in new build
structure of the new build
asset(s), which require repair.
Latent defects appear in the
structure of existing asset(s)
Latent defects in existing build
which are transferred to the
incoming operator.
There is a risk that, during the
Change in specification
operating phase of the project,
imposed by procuring entity
the Council will require changes
to the specification.
Poor management of sub-
contractors can lead to poor co-
ordination, and under-
Performance of sub-contractors performance by the contractors.
This may create additional costs
in the provision of services.
In the case of default by a
contractor or sub-contractor,
Default by contractor or sub-
there may be a need to make
contractor
emergency provision. There may
also be additional costs involved
in finding a replacement.
An event of this kind may delay
or impede the performance of the
"Relief Events"
contract and cause additional
expense.
In the event of Force Majeure
additional costs will be incurred.
Force Majeure
Facilities may also be
unavailable.
28
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
There is a risk that an event of Force
Termination due to Force Majeure will mean the parties are no
Majeure
longer able to perform the contract.
Obtaining and maintaining There may be failure to obtain licences
licences and consents,
and consents, many of which will
including those issued by
require renewal on an annual basis.
the Environment Agency
The assets may not operate as
intended due to:
Sub standard plant
- Sub standard maintenance
operation
- Sub standard materials
- Sub standard quality of construction.
Responsibility for
Cost of compliance with relevant
maintaining health and
health and safety, quality and
safety, quality and
environmental standards may be more
environmental standards
than envisaged.
Recycling income may be greater than
expected due to (i) the total volumes of
Increase/ gain of
waste presented for recycling being
recyclate income
greater than projected; (ii) market price
for processed recyclables being above
that projected (all sites).
Reduction/loss of
(i) The total volumes of wastes
recyclate income
presented for recycling being less than
- Recycling income may
that projected (non-CA sites).
be less than budget due
(ii) the composition of wastes
to:
containing a lower proportion of that
recyclates than that projected
(non-CA
sites).
(iii) market price for processed
recyclables being below that projected
(all sites)
(iv) No markets secured for processed
waste
(v) No markets available and waste is
disposed of.
(vi) Lower market price due to quality of
processed recyclables.
(vii) the total volumes of wastes
presented for re-cycling being less than
that projected (CA sites only).
(viii) The composition of wastes
containing a lower proportion of
recyclates than that projected
(CA sites
only)
29
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
Trade waste income may be less
than expected due to:
Trade waste income less than
(i) Trade Waste volumes being
projected
less than projected.
(ii)Trade Waste tariffs being less
than projected.
The cost of providing these
Incorrect estimated transport
services may be different to the
cost of providing specific
expected, because of
services under the contract:
unexpected changes in the cost
within market testing periods
of equipment, labour, utilities,
and other supplies
The cost of providing these
Incorrect estimated cost of
services may be different to the
providing specific services
expected, because of
under the contract: at point of
unexpected changes in the cost
market testing
of equipment, labour, utilities,
and other supplies
The cost of building and
Incorrect estimated cost of
engineering maintenance may be
maintenance
different to the expected costs.
Rate costs are higher or lower
Increased estimate of NNDR
than forecast.
The estimated cost of the
Estimated cost of transferring
transfer of the employment of
the employment of staff to new staff under TUPE may be
employer is incorrect
incorrect. This includes the cost
of any legal appeals.
The estimated cost of
restructuring the workforce at any
Estimated cost of restructuring
time during the operating phase,
the workforce providing services such as recruitment costs and
under the contract is incorrect
redundancy payments, may be
incorrect.
Cost of third party claim for
Public Liability (caused by PSP) death, injury or other loss
(caused by PSP).
Payment will be made by the
Non-performance of services
local authority only for services
received.
The risk that the procuring entity
Termination due to default by
defaults leading to contract
the procuring entity
termination and compensation for
the private sector.
30
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
The risk that the operator or
individual service providers
Default by the operator leading default and financiers step-in
to step-in by financiers
leading to higher costs than
agreed in the contract
The risk that the operator
defaults and step-in rights are
Termination due to default by
exercised by financiers but that
the operator
they are unsuccessful leading to
contract termination.
5. Residual Value Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
The risk that the procuring entity
will not require the asset at the
Procuring entity no longer
end of the contract period, and
requires sites at end of contract
that the operator may be faced
with decommissioning costs.
Decontamination costs could be
significant. Allowance would be
Decontamination of sites which made for any known
are transferred at the end of the contamination at the start of the
PFI contract to either the
PFI contract where sites had
Council or another incoming
been transferred from the
contractor
Council to the incoming PFI
contractor.
Disposal of surplus operational Surplus operational plant and
plant and equipment at the end equipment may be expensive to
of PFI contract if not required
de-commission and dispose of.
by the Council
Disposal of surplus operational
plant and equipment at the
Surplus operational plant and
beginning of PFI contract if not equipment may be expensive to
required by the Council or
de-commission and dispose of.
Contractor
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6. Financial Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
Lifecycle replacement
Plant and equipment replacement.
Inflation
Inflation above RPI.
The contractor will continue to
Change in structure
guarantee any performances as a
result of any change in structure.
The contractor provides all necessary
Insurance
for the operation.
The risk that financing cannot be
Financing risk of Interest
secured on the terms used to price
rate Risk
the contract.
The risk that costs change due to
Foreign exchange risk
movements in foreign exchange rates.
7. Performance Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
There is a risk that operational and
Failure to meet
maintenance services (O&M) will not provide
performance
the required quality of services. This may be
standards
costly to correct.
There is a risk that some or all of the
Availability of
facilities will not be available for the use to
facilities
which they are intended. There may be costs
involved in making the facility available.
Recycling targets
Recycling targets set by the Council and
CA
Government legislation may not be met due
to:
(i). Waste composition
(ii) Contractors' performance
(iii) Public participation
Recycling Targets
(i) Failure to collect
(ii) Failure to deliver according to delivery
regime
(iii) Failure of technology
(iv) Inadequate management
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8. Demand Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
There is a risk that the volume of
demand for waste services will
Changes in the volume of
change. This may occur due to
demand for services at each
demographic factors or changes
facility
in the size of the catchment area,
for example.
There is a risk that the
Changes in general waste
composition of waste inputs will
composition
change.
9. Technology and Obsolescence Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
Unexpected changes in
Unexpected changes in
technology may lead to a need to
technology
re-scale or re-configure the
provision of services.
Buildings, plant and equipment
Asset obsolescence
may become obsolete during the
contract.
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10. Regulatory Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
Where not foreseeable, a change in
local authority specific legislation,
Legislative / regulatory
taking effect during the construction
change: discriminatory
phase, leading to a change in the
requirements and variations in costs.
Where not foreseeable, a change in
Legislative / regulatory
waste industry specific legislation,
change: waste industry
taking effect during the construction
specific
phase, leading to a change in the
requirements and variations in costs.
Where not foreseeable, a change in
non-local authority specific legislation /
Legislative / regulatory
regulations taking effect during the
change: general
construction phase, leading to a
change in the requirements and
variation in costs.
Where not foreseeable, changes in
Environment Agency
Environment Agency's interpretation of
Interpretation
current legislation to council.
The facilities may fail to meet existing
environment regulations/legislation due
Compliance with existing to:
environmental
- inadequate plant design
regulations/legislation
- inadequate maintenance
- use of sub-standard materials.
Where not foreseeable, the facilities, to
Compliance with new
the extent discriminatory or specific,
environmental
may fail to meet new environmental
regulations/legislation
regulations/legislation.
Where not foreseeable, local authority
Legislative / regulatory
specific changes to legislation /
change having capital
regulations may lead to additional
cost consequences:
construction costs, and higher building,
Sector specific
maintenance, equipment or labour
costs (eg. landfill directive).
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Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
Where not foreseeable, changes to
Legislative / regulatory
legislation / regulations in respect of
change: compliance
Best Value may lead to additional
with Best Value
construction costs, and higher building,
obligations
maintenance, equipment or labour costs.
Where not foreseeable, non-local
authority specific changes to legislation /
Legislative / regulatory
regulations may lead to additional
change: general
construction costs, and higher
maintenance equipment or labour costs.
11. Taxation Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
The scope and level of corporate taxation
Changes in taxation will effect the cost of providing services.
Changes in the rate
Changes in the rate of VAT may increase
of VAT
the costs of the project.
Other changes in
Changes in VAT legislation other than
VAT
changes in the rate of VAT payable.
Landfill tax
Changes in the rate of landfill tax.
Renewable
Changes in the basis of renewable energy
obligation certificates certificates.
Tradable Landfill
Changes in the basis of tradable landfill
Allowance
allowances.
12. Insurance Risks
Risk Allocation
Risk
Description
Private
Council
Sector
Shared
Provider
There is a risk that some insurances become
Uninsurability uninsurable.
There is a risk that insurance premiums increase
Premiums
as a result of general market conditions.
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West Berkshire Council
Countryside and Environment
Faraday Road
Newbury
Berkshire
RG14 2AF
