The parties have agreed to amend the contract to include an obligation on UBB to demolish the facility, hand the environmental permit back to the Environment Agency, and return the empty site to the county council. The contract will then be terminated.
Essex proposed the radical solution in early March (see letsrecycle.com story).
Formed by waste management company Urbaser and infrastructure group Balfour Beatty, UBB signed a PFI contract with Essex in 2012 to design, build, and operate the MBT facility across a 28-year period (see letsrecycle.com story).
The deal was said to be worth £800 million over its lifetime and the facility was to process 417,000 tonnes of residual waste a year.
Essex says it has been in discussions with UBB “for some time” about a number of “significant” performance issues at the facility.
When matters were not resolved, they were referred to the High Court. Following a trial in 2019, the High Court handed down judgement in June 2020 in favour of the council (see letsrecycle.com story).
Following the judgment and subsequent launch of further proceedings in relation to the contract in July 2021, Essex and UBB decided to terminate the deal.
Performance issues
An Essex county council spokesperson said: “Due to ongoing performance issues at the waste treatment facility in Basildon, Essex county council and the parent companies of the facility’s former owner and operator, Urbaser SA and Balfour Beatty Group Limited, have mutually agreed to terminate the contract, thereby settling the ongoing legal disputes.
UBB recognises that the facility did not meet the performance levels set out in the contract
- Essex county council
“ECC will work closely with the two companies to ensure a smooth transition to demolition of the facility and the handing back of the environmental permit.
“Residents will see no difference in how their waste is collected. Waste that local householders have sorted for recycling will continue to be separately collected and recycled.
“UBB recognises that the facility did not meet the performance levels set out in the contract and also that the performance issue was not caused by the actions of ECC.
“Both parties are pleased to have been able to conclude matters on mutually agreed terms.”
Landfill
Essex says it will continue to send waste to landfill “in the short term” as part of contingency arrangements “which have been in place throughout the facility’s ongoing commissioning phase.”
Deliveries of waste to the facility ceased in June 2020, the council says, and the Tovi Eco Park was emptied of waste in August 2020.
The council expects demolition works to begin this summer, “subject to planning requirements.”
Urbaser Environmental Ltd will then commence the process of handing back its permit to the Environment Agency, Essex says, which will be complete “once the Environment Agency is satisfied that the necessary conditions have been met.”
The empty site will be made “safe and secure” for residents and then handed over to the council.
Review
Essex says it will undertake a review of the county’s waste management strategy and shape its plan for how it will move away from landfill with its members and partners, “in light of these recent developments.”
The council plans to consult residents on their views on the future of waste treatment in Essex.
Representing an estimated population of 1.8 million, Essex county council had a household waste recycling rate of 49.8% in the 2020/21 financial year.
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