Wakefield MDC - Waste Management PFI Project

Location

The City and District of Wakefield

Description

Sewage-, refuse-, cleaning-, and environmental services. Refuse and waste related services. Refuse disposal and treatment. Refuse recycling services. Construction work. A semi-integrated waste management contract for transportation, handling, processing, recycling, treatment and disposal of municipal waste including the management of recycling facilities and the design, build, finance and operate (DBFO) of new waste treatment facilities.

Ammendments to Previous Notice

Award Detail

CPV Codes

• 90000000 - Sewage, refuse, cleaning and environmental services
• 45000000 - Construction work
• 90500000 - Refuse and waste related services

Indicators

• Contract modified due to unforeseen circumstances.

Legal Justification

The Project Agreement was procured under the Public Services Contracts Regulations 1993 (S.I. 1993/3228) which did not include specific contract modification provisions. The Contracting Authority has therefore considered caselaw and the provisions of the Public Contracts Regulations 2015 in settling the grounds on which the contract modifications are permitted. Regulation 72(1)(c) of the Public Contracts Regulations 2015 The autoclave requires a gas supply to raise the steam to sanitise the organic fraction. Wholesale gas prices have increased year on year since the contract was entered into. In 2018 the first market testing exercise demonstrated that the operating costs would be significantly higher than the modelled costs. In addition, the dramatic increase in energy costs after Russia's invasion of Ukraine in February 2022 has made the autoclave uneconomic to operate within the risk profile of the Project Agreement. The autoclave is a bespoke piece of technology, and all parts are machined to order. During COVID, no parts could be sourced to resolve operating issues and maintain the autoclave to the standard required by the Project Agreement. As a result, the condition of the autoclave has deteriorated and it would require the investment of significant financial resources including upgrading the operating system to bring it back into working order in accordance with the requirements of the Project Agreement. Routine monitoring of the anaerobic digestion facility highlighted a lower than anticipated gas yield. Testing on the organic fraction treated by the autoclave identified that there was no net increase in the methanogenic potential which was originally modelled. As a result, there is no benefit in treating the organic fraction through the autoclave. : The Project Agreement remains a contract for a semi-integrated waste management contract for transportation, handling, processing, recycling, treatment and disposal of municipal waste including the management of recycling facilities. The removal of the Autoclave plant from the South Kirkby Main Residual Waste Treatment Facility will not impact on service delivery because the organic fraction that would have been processed through the autoclave has been processed through the pre-treatment facility at the South Kirkby Main Residual Waste Treatment Facility for 6 years in any event. The organic fraction will continue to be processed through the pre-treatment facility with the resultant end products (RDF and digestate) being the same. Sole use of the pre-treatment facility will have no negative impact on the performance of the Project, either in terms of diversion of household residual waste from landfill or recycling rates. The removal of the autoclave represents a small part of the overall services delivered by the Contractor under the Project Agreement. There is no increase in price. There will be a saving per contract year to the overall contract price of £479,283 excluding VAT which will be indexed on 1 April 2026 and every 1 April thereafter by reference to RPIx.

Other Information

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