Private Finance Initiative

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Revision as of 15:33, 3 February 2020 by Northern Chick (talk | contribs) (Addition of PFI text and changes to GMWDA acroymn.)

Overview of PFI

A private finance initiative (PFI) is a way of financing public sector projects through the private sector. PFIs alleviate the government and taxpayers of the immediate burden of coming up with the capital for these projects. Under a private finance initiative, the private company handles the up-front costs instead of the government. The project is then leased to the public and the government authority makes annual payments to the private company. These contracts are typically given to construction firms and can last as long as 30 years or more.[1]

In its desire to stimulate investment in waste infrastructure and underpin the diversion of BMW waste from Landfill, the Government supported/subsidized a range of treatment technologies on a number of sites that were procured by Waste Disposal Authorities needing this infrastructure through a dedicated long term Private Finance Initiative (PFI). This arrangement has now ceased and several schemes which had their funding agreed later had it removed after DEFRA assessed [2] that the BMW targets could be met with the infrastructure funded to date.

Fast forward circa two decades later and some of these PFI projects are currently being considered by Waste Disposal Authorities for movement out of the PFI arrangement after consideration of the cost benefit of continuing with the contract. Indeed several have now removed themselves form the PFI model (i.e. Lancashire) or have had closed with major restructure (i.e. Sheffield and Greater Manchester).

The table below is an extract from DEFRA data [3] summarizing the residual waste projects that are/were PFI projects with additional commentary/notes added (an alternative PPP process and associated projects are listed on the PPP page):

Location Project/Site Classification Status Capacity [4] (ktpa) Plant Type Comment
Bolton Raikes Lane PFI Operational 86 EfW Viridor Laing consortium GMCA contract terminated 2017, now Suez from June 2019 for 7 years
Cambridgeshire Waterbeach PFI Operational[5] 200 MBT Amey Cespa site with variable performance reported, planning being pursued for new EfW on the site
Cornwall St. Dennis PFI Operational 240 EfW Suez site (Cornwall Energy Recovery) part of an integrated contract with Cornwall to 2039
ELWA 1 Frog Island PFI Operational 180 MBT Renewi site servicing ELWA, recently reported financial difficulty
ELWA 2 Jenkins Lane PFI Operational 180 MBT Renewi site servicing ELWA, recently reported financial difficulty
East Sussex Newhaven PFI Operational 234 EfW Servicing East Sussex County Council and Brighton and Hove City Council
Essex Courtauld Road PFI Operational[5] 417 MBT Developed and operated by partners Urbaser Balfour Beatty servicing Essex County Council and Southend, reported operational difficulties
Greater Manchester Longley Lane PFI Operational 110 MBT Viridor Laing consortium PFI contract with GMCA terminated 2017, now Suez from June 2019 for 7 years
Greater Manchester Runcorn Phase 1 PFI Operational 325 EfW Viridor bought out Laing in Nov 2018 and continues to operate under contract with GMCA to 2035[6]
Greater Manchester N. Manchester PFI Operational 65 MBT Viridor Laing consortium PFI contract with GMCA terminated 2017, now Suez from June 2019 for 7 years
Greater Manchester Oldham PFI Operational 99 MBT Viridor Laing consortium PFI contract with GMCA terminated 2017, now Suez from June 2019 for 7 years
Greater Manchester Salford PFI Operational 73 MBT Viridor Laing consortium PFI contract with GMCA terminated 2017, now Suez from June 2019 for 7 years
Greater Manchester Stockport PFI Operational 92 MBT Viridor Laing consortium PFI contract with GMCA terminated 2017, now Suez from June 2019 for 7 years
Kirklees Vine Street PFI Operational 127 EfW Suez operated site primarily for Kirklees
Leeds Cross Green PFI Operational 165 EfW Site developed by Veolia on behalf of Leeds City Council under a 25 year contract to 2037
Leicstershire Mowmacre Hill PFI Operational 120 MBT[7] Integrated contract delivered by Biffa for Leicester City Council for 25 years from 2002
L.B. Southwark Old Kent Road PFI Operational 100 MBT[8] Suez integrated facility servicing Southwark
Shropshire Battlefield Enterprise Park PFI Operational 90 EfW Site developed by Veolia as part of a 25 year contract with Shropshire
South Tyne & Wear Teeside Lines 4&5 PFI Operational 256 EfW Suez facility[9] serving Stockton, Middlesbrough, Redcar & Cleveland and Northumberland and the South Tyne & Wear Partnership
South Devon Devonport PFI Operational 245 EfW MVV Umwelt facility serving South West Devon Waste Partnership under a 25 year contract
South Yorkshire Bolton Road, Manvers PFI Operational 286 MBT Renewi partnership with SSE delivering integrated MBT and AD facility to Barnsley, Doncaster and Rotherham Waste Partnership to 2040
Staffordshire Four Ashes PFI Operational 325 EfW Veolia operated site for Staffordshire County Council, 25 year contract from July 2010, with inputs also from Sandwell, Warkwickshire and Walsall
Suffolk Great Blakenham PFI[10] Operational 269 EfW Suez facility delivered primarily for Suffolk under 25 year contract, with later deal for cross-border tonnage from Norfolk
Surrey Charlton Lane Eco Park PFI In Construction 60 EfW Suez integrated AD and Gasification facility for Surrey has had delays in commissioning the latter, now forecast Q1 2020
Wakefield South Kirby PFI Operational 146 MBT Renewi integrated contract for Wakefield City Council

References

  1. ↑ [1]
  2. ↑ DEFRA Waste Infrastructure Delivery Programme
  3. ↑ DEFRA Residual Waste Treatment Infrastructure Project List dated 31st December 2016 but noted as last updated 29th March 2019 (edited with press updates)
  4. ↑ The capacity has been reproduced from the DEFRA data, but has not been verified in this table, and in some cases is known not to be up to date
  5. ↑ 5.0 5.1 In original data site was listed as In Construction this has been changed to Operational.
  6. ↑ As part of the restructuring of the PFI contract, with option to extend
  7. ↑ The technology utilized under the contract is the only one in the UK and is known as a 'Ball Mill'
  8. ↑ Integrated site includes a Gasification facility which is in extended commissioning
  9. ↑ This site comprises a number of facilities in the same general area
  10. ↑ Discussions within Suffolk around re-financing reported in 2018 (Letsrecycle article November 2018
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