SITA to Build Waste to Energy Plant as Part of £1.1bn PFI in Cornwall

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SITA to Build st dennis Waste to Energy Plant as Part of £1.1bn PFI in CornwallSITA is to go-ahead with building the controversial St Dennis waste to energy facility in Cornwall under a 30 year Private Finance Initiative (PFI) contract worth £1.1 billion to manage residual household waste and recycling with Cornwall Council.

According to SITA - a subsidiary of - a part of SUEZ Environnement (Paris: SEV, Brussels: SEVB) - once third party waste and electricity revenues are taken into account, total project revenues are expected to reach £1.4 billion over the life of the project.

The company added that the Net Present Value of cost for the Authority on a comparable basis has increased by just 1.6% from £426 million to £433 million, despite the significant additional costs caused by repeated challenges to the planning permission for its proposed waste to energy facility in St Dennis.

Delays

The 30-year integrated waste management contract between SITA and Cornwall Council was originally signed in October 2006. However, the company explained that following delays in getting planning permission to build the 240,000 tonne per year waste to energy plant contract variation was required.

In March 2009 SITA’s planning application for the Cornwall Energy Recovery Centre was refused permission by Cornwall County Council in March 2009.

However, as instructed by the Council, SITA said that it submitted an appeal to the Planning Inspectorate, and in May 2011 received notification from the Secretary of State, Eric Pickles MP, that he had granted planning permission.

Local opponents to the Cornwall Energy Recovery Centre launched a challenge against Pickles' decision, and their S288 appeal was upheld by the High Court in October 2011.

That ruling itself was then appealed by the Secretary of State and in March 2012, the Court of Appeal allowed the Secretary of State’s appeal and confirmed the validity of the his decision to grant planning permission for the Cornwall Energy Recovery Centre.

SITA explained that due to these delays in obtaining planning permission it went back out to the market to identify and negotiate with potential investors.

The contract

The contract is to manage the treatment and disposal of all of Cornwall Council’s household waste.

According to the company, key to the contract is to design, build, finance and operate of the St Dennis waste to energy facility, which will generate electricity for the equivalent of around 21,000 homes.

SITA said that the facility, which has planning permission and an Environmental Permit, is expected to be operational in 2016. The county’s residual waste is currently taken to Connon Bridge landfill site, near Liskeard.

The company claimed that over the past six years, the contract has yielded many benefits to local residents and the environment with £25 million invested in improving waste and recycling facilities across Cornwall.

These improvements have included upgrading works to a number of household waste recycling centres and the construction of new centres in St Austell, Bude, St Erth, Falmouth and Launceston, along with new waste transfer stations at Connon Bridge, St Erth, Launceston and Pool.

 “We now have a clear path to proceed with the delivery of the much needed Cornwall Energy Recovery Centre which will reduce the county’s reliance on landfill and create energy by putting residual waste to good use,” commented Jean-Louis Chaussade, CEO of SUEZ Environnement.

A spokesman for Cornwall Council added: “The signing of the revised project plan provides long term security for the management of Cornwall's waste.”

SITA said that funding for SITA Cornwall will be provided by The European Investment Bank (EIB), Bank of Tokyo-Mitsubishi, Mizuho Corporate Bank and Helaba. SITA UK, Itochu and Lloyds will provide equity.


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