This will encourage the UK waste industry to see that these types of contract are beginning to move again since the dire effects of the credit crunch started last summer.

The following is from the LetsRecycle News item:

Greater Manchester’s £3.8 billion PFI contract with Viridor Laing was the first to be pushed through by a new Treasury unit set up to help projects struggling in the current financial climate, it emerged on 8th April.

The European Investment Bank – which is lending £182 million to the project – has revealed that the Treasury’s Infrastructure Finance Unit set up last month helped the deal reach financial close this week (see letsrecycle.com story). The project was the first to be assisted in this way.

The details came as the EIB revealed the full breakdown of funding received for the project, from a variety of banks and government sources.

The EIB said: “HM Treasury ‘s Infrastructure Finance Unit has joined that syndicate of commercial banks and the EIB to enable the Greater Manchester Waste Disposal Authority’s PFI scheme to achieve financial close. The Unit was established recently to enable PFI projects which will create jobs and deliver vital infrastructure to proceed.

“This is the first transaction completed by the unit,” it added.

The EIB explained that the £182 million it was lending to the project would be split between Viridor Laing and Ineos Runcorn TPS. Viridor will receive £100 million to treat municipal waste provided by the Manchester authority, including the production of solid recovered fuel from waste. Ineos Runcorn TPS will receive £82 million to incinerate the solid recovered fuel.

The bank explained that further financing would be provided by other banks, including £95 million from the Bank of Ireland, £55 million from Spanish-based bank BBVA, £55 million from Lloyds Banking Group and £40 million from Japanese-based bank SMBC.

Simon Brooks, EIB vice president responsible for lending activity in the UK, said: “We are delighted to help this landmark project. Not only will Greater Manchester residents see the environmental benefits of the project in their daily lives, but the project represents an important step for the UK on the road to meeting national and EU-wide waste and recycling targets.”

The EIB said that Greater Manchester PFI project was expected to contribute directly to the UK’s commitment to achieving 50% recycling/composting and a 65% diversion from landfill by 2020 in accordance with EU requirements. The EIB said this was of particular importance for Greater Manchester which is the largest of England’s six statutory waste disposal authorities, accounting for five percent of national waste.

Manchester waste PFI deal to be done by end of month

Europe’s largest waste management contract, the £3.3bn Greater Manchester waste PFI, will be finalised by the end of the month, an insider on the project has claimed.

The source said the banks involved in the 25 year contract were close to agreeing the struc­ture of the finance.

A joint venture between infrastructure investor John Laing and waste contractor Viridor was originally named as preferred bidder by client Greater Manchester Waste Disposal Authority (GMWDA) in January 2007.

But the complexity of the deal and increasingly difficult lending conditions caused by the credit crisis have meant that every deadline for the project has so far been issed. Last December GMWDA predicted that the deal would be wrapped up by Christmas 2008 (NCE 4 December 2008).

I think that many are waiting anxiously to see these signings go through. The industry needs this vital re-assurance that the banks are still able to put together a deal of this size, are lending, and that the credit crunch has done its worst… (The Waster)

Source: New Civil Engineer Magazine

England is too slow at reducing the amount of waste sent to landfill and could face European Union (EU) fines as a result, the government’s public spending watchdog has warned.

The National Audit Office’s Managing the Waste PFI Programme report accuses the Department for the Environment Food and Rural Affairs (Defra) of being too slow to react when in 1999 the EU ordered member states to cut by 50% the amount of biodegradable waste they send to landfill by 2013.

It added that although 18 new PFI waste schemes worth £1.6bn are underway, local authorities had experienced delays in completing deals and bringing the projects into operation.

Auditor General Tim Burr said: “Defra is doing a lot to accelerate the programme of new waste treatment facilities being procured through private finance.”

“But, at the rate at which projects are being delivered, England risks missing the 2013 EU landfill reduction target, leaving the UK open to the possibility of fines.”

** End of NCE report **

The Waster says: The situation has the potential to deteriorate quite rapidly now for the UK’s PFI award programme. Many contracts have been delayed by the credit crunch which has meant the unexpected renegotiation of terms for loans between PFI providers and their banks when the banking system suffered so heavily in autumn 2008.

A number of PFI Contracts have been due to start since the summer, but still await award, and their programmes (which include building all the new waste processing facilities essential for the UK to meet the UE targets) must necessarily be put back.

The Greater Manchester PFI is just one example of the delays witnessed and was reported by the Wastersblog just after Christmas, yet there is still no news of award.