1 / 14

Greater Manchester Waste Project

Greater Manchester Waste Project. Ed Farquharson PPP Days 2010 Manila 22-23 March 2010. Landfill Tax. Landfill Allowance Trading Scheme. Recycling Targets. Public Demand. Renewable Obligation Certificate. Waste Treatment Policy and Drivers.

tomas
Download Presentation

Greater Manchester Waste Project

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Greater Manchester Waste Project Ed Farquharson PPP Days 2010 Manila 22-23 March 2010

  2. Landfill Tax Landfill Allowance Trading Scheme Recycling Targets Public Demand Renewable Obligation Certificate Waste Treatment Policy and Drivers • Landfill Directive: reduce volume of BMW sent to landfill to 75% of 1995 levels by 2010, 50% by 2013 and 35% by 2020. • Waste and Emissions Trading Bill limits waste to landfill - £150/tonne.

  3. Waste Project Pipeline: 55 projects

  4. Greater Manchester Waste Disposal Authority Providing a solution for Greater Manchester’s municipal waste. 9 Collection Authorities 2.2m population 973k households 1.2m tonnes p.a. of municipal waste

  5. Key Project Outcomes • At least 50% recycling and composting of all waste by 2015 • Diversion of more than 75% of Greater Manchester’s waste from landfill • Help to ensure that the UK complies with its requirements under the European Union Landfill Directive • Carbon benefits

  6. Project Facilities • Total capital cost: £631 million, 44 different facilities • Combined Heat and Power Plant for 375ktpa 25 Household Waste Recycling Centres 5 Mechanical Biological Treatment Plants (4 with AD) 4 In-Vessel Composting Plants 1 + 2 Material Recovery Facility / Green Waste Facilities 7 Transfer Loading Facilities

  7. Key Commercial Features • Payment by Authority on a per tonne basis • Exclusivity • Third party income from power sales shared • Key risks transferred to private partner: • technology • construction – time and budget • operation • waste composition risk • residue market sales

  8. Contract Structure

  9. Project Milestones October 2004 – Outline Business Case submission. February 2005 tender issued; 10 proposals submitted June 2005 5 consortia shortlisted May 2006 2 names - SITA and Viridor/John Laing January 2007 – Viridor Laing consortium appointed preferred bidder. From July 2007 – redevelopment/acquisition of 23 sites. April 2008 – contract ready to close 8 April 2009 – contract signed.

  10. How the Funding Unfolded • BAFO: two banks underwrote finance / joint MLAs • EIB €150 million available • Credit Crunch intervened • Elected Members fully advised to maintain confidence. • Unchanged technical solution and long term funding with balanced risk profile. • Close liaison with Government and PUK. • Joint work yielded new banks • All new Banks wanted variations on a theme for due diligence. • Authority and TIFU funding introduced.

  11. Source of Funding £m % Commercial Banks (BoI, BBVA, SMBC, Lloyds TSB) 245 31 European Investment Bank 182 23 Equity Investment - Sponsors 148 19 TIFU 120 15 Capital Contribution 68 8 WDA Senior Debt 35 4 Total 798 100 Final Sources of Funding

  12. Key Finance Details • Debt: 23.5 years, 79/21 gearing, 325bps during construction, 5 year margin ratchets during operation, starting at 335bps and rising to 450bps after year 16 to maturity. • Primary SPV: • Viridor Waste Management Limited (50%) • John Laing Investments Limited (50%) • Secondary SPV: • Viridor Waste Management Limited (40%) • John Laing Investments Limited (40%) • Ineos Chlor Limited (20%)

  13. Success Drivers • Strong stakeholder management led to clarity of purpose and commitment • Dedicated central support • Dedicated team supported by stable team of advisors • Sponsor engagement • Continual checking back to objectives and the contract rules • Well planned site acquisition – schemes hit the ground running • TIFU and EIB funding support Longley Lane, Manchester: MRF, MBT, HWRC and Green Waste May 2009 September 2009 October 2009 December 2009

  14. Information and Resources • WIDP Guidance, incl: • Residual Waste Treatment Contract (consultation) • Options appraisal • Project governance • Payment mechanisms • Output specifications www.defra.gov.uk/environment/waste/localauth/funding/pfi/consultation.htm • Waste Strategy for England www.defra.gov.uk/environment/waste/strategy/strategy07/documents/waste07-strategy.pdf

More Related