MegaProject 1023: Manchester terminates PFI waste contract with Viridor Laing consortium
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Greater Manchester Waste Disposal Authority (GMWDA) has announced it has terminated its PFI contract with the Viridor Laing consortium.
The current contract arrangements with Viridor Laing (Greater Manchester) Ltd (VLGM) ends on September, 29.
VLGM was owned by Viridor (50%) and John Laing (50%). The ownership of VLGM has now passed to GMWDA and it has been renamed Greater Manchester Combined Waste and Recycling.
Pennon Group, the parent company of Viridor, claimed that the Authority’s exit from the contract is due to ‘financial challenges’ caused by prolonged austerity.
Work continues on the remaining agreements in relation to INEOS Runcorn (TPS) Holdings Limited and the contract relating to the recycling and reprocessing operations.
GMWDA indicated last year that it was ‘not satisfied’ with the contract and was looking to make ‘significant cost savings and efficiencies’ and decided to terminate the contract 17 years early
In 2005, GMWDA put to tender the contract to deliver the project - a complete overhaul of waste management for the 1.3 million tonnes of waste generated in Greater Manchester each year.
In 2009, GMWDA signed a 25-year private finance initiative deal with the Viridor Laing consortium for the Greater Manchester’s £3.8 billion (US$4.9 billion) waste management overhaul. At the time it was one of the UK’s largest PFI deals.The contract encompassed a £631 million construction programme of large-scale developments, taking in 43 schemes at 27 locations.
The deal has seen the consortium handle around waste a year generated by Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside and Trafford councils, with a total population of around 2.3 million.