Essex Waste Management Partnership Residual Waste Treatment Contract

VII.1.4) Description of the procurement:

As described above, the Contract was awarded on 31 May 2012 to UBB Waste (Essex) Limited, following the completion of a full tender process.

The contracted works and services were for the design, construction, commissioning, handback and operation of a mechanical biological treatment (MBT) facility in the Tovi Eco-Park (Basildon, Essex). Following the initial construction of the facility, the contract provided for a commissioning period followed by Acceptance Tests to confirm that the facility could meet the performance requirements in the contract. If not ultimately passed by an Acceptance Longstop Date of 12 January 2017, the Authority was entitled to terminate the Contract.

The facility did not pass the Acceptance Test by the Acceptance Longstop Date, which resulted in the Authority commencing litigation against the contractor. The Authority has given notice that it is proposing to take a decision to enter into an Amendment and Settlement Agreement to settle that litigation and to amend the handback requirements of the contract on the basis that the site will be cleared and returned to ECC in a condition that will allow for its future redevelopment. It is expected that the modified contract will have a term expiring in 2040.

More specifically, the contractor shall:

• Demolish the MBT facility to ground slab level.
• Surrender the Environmental Permit which relates to the operation of the MBT facility and is held by Urbaser Environmental Limited.
• Remove certain hazardous substances from the site and hand back the site in accordance with the conditions in the Amendment and Settlement Agreement, to the satisfaction of an independent environmental consultant.
• Remove certain plant and equipment from the MBT facility prior to its demolition.
• Design and build a new surface water management system for the site. This includes re-grading part of the site and installing new surface water retention structures.
• Install new sections of security fencing for the site.
• Arrange for the de-energisation of the UKPN electrical sub-station and install a new power supply to the site to serve the surface water management system.
• Fill below-ground voids following the demolition process with granular materials.
• Obtain all necessary consents to enable the works.
• Surrender to the Authority its sub-lease interest in the site.
• Procure that its ultimate parent companies indemnifies the Authority (until the expiry of a period of three years following handback) against any failure by the contractor to perform its obligations as set out above and further detailed in the Amendment and Settlement Agreement.

A VEAT notice is also published linked to this modification.

The current modifications have arisen in connection with the proposed settlement of the litigation and the subsequent proposed amendment of the handback requirements of the Contract. The services / works which form part of the agreement with the contractor (which include the demolition services / works) are estimated to be in the region of c. 1% of the original value of the Contract (which was c. £800m).