Two shortlisted for waste contract

Two companies are in the running to build a multi-million pound waste treatment facility in Leicestershire.

Leicestershire County Council has shortlisted bids from Osiris and Veolia Environmental Services to build a new waste plant which will deal with up to 180,000 tonnes of residual household waste by 2040.

The council is a top-performing authority for recycling household waste, with a rate of 52%. This new facility will help to meet targets for reducing the amount of waste left after recycling which is sent to landfill in future and save money on landfill tax.

Two years ago, the Government granted Leicestershire £87 million in private finance initiative credits to develop a facility. The procurement process began in November 2008.

Eight companies were asked to provide outline proposals and last summer three bidders were shortlisted: Biffa, United Utilities/John Laing and Veolia.

Following detailed evaluation against set criteria, the council has shortlisted the following, in alphabetical order:

• Osiris (a consortium made up of United Utilities Waste Management Ltd, Costain Engineering and Construction Ltd and John Laing Investments Ltd) is proposing a mechanical treatment facility (MTF) to produce a refuse derived fuel (RDF) for gasification.

The facility would be located at the council-owned Bardon site.

• Veolia Environmental Services is proposing an energy from waste facility which would be located at the council-owned Bardon site.

Both of these proposals generate electricity and, in addition, would also be capable of generating heat.

Tony Kershaw, Cabinet member for waste, said: "This is not the end of the process. We will now meet with the remaining bidders and continue our discussions to achieve the best solution for Leicestershire."

The council will invite final tenders later this year. Subject to planning consent and construction, it is hoped that the facility will be open by April 2015.

Notes to editors:

1. To achieve the best solution for Leicestershire, this procurement process is following a procedure which allows the County Council to enter into dialogue with the bidders over a period of time. Commercial details are confidential to the bidders.

2. The Private Finance Initiative is a Government scheme that allows local authorities to buy a service from a private sector company, rather than borrow money to build and operate its own facilities. The Government PFI credits are a financial contribution towards the capital cost of the construction of the facilities. They are not a loan and are not repaid by the local authority. The local authority will meet the remaining capital cost, plus the operational cost, through payments over the life of the contract.

3. The planning process is separate from the County Council’s procurement process and companies are free to apply for planning permission for any type of proposal at any time.  

4. Waste technologies:

Mechanical treatment

During this treatment process, mechanical techniques are used to sort waste into separate materials in order to extract remaining recyclables in the residual waste stream and make a contribution to overall recycling. The residual material is processed into a refuse derived fuel (RDF).

Gasification

This is a process that converts the RDF into a mixture of synthetic gases - mainly carbon monoxide and hydrogen - by heating the raw material at high temperatures using a controlled amount of oxygen

The resulting gas mixture is called a syngas and is itself a fuel which can be used to generate a source of renewable electricity and heat which can be provided to local communities, businesses or the national grid.

Energy-from-waste (EfW)

This refers to any waste treatment that creates energy in the form of electricity or heat from a waste source. The electricity and heat generated can be provided to local communities, businesses or the national grid.