Sita UK Signs 30-Year Deal with Cornwall Council

Sita UK, a subsidiary of Suez Environnement, and the Cornwall (UK) Council, have agreed to a 30-year private finance initiative contract to handle the waste and recycling services for Cornwall, U.K. The contract is expected to total between £1.1 billion (US$1.7 billion/€1.4 billion) and £1.4 billion (US$2.14 billion/€1.64 billion).

The contract calls for Sita UK to manage the treatment and disposal of all the household waste generated in Cornwall Council. As part of the project the company will design, build, finance and operate an energy-from-waste facility in St. Dennis, which will have a capacity of up to 240,000 metric tons per year. The facility is expected to be operational in 2016.

The initial contract between the two parties was originally signed in late 2006. However, Sita says that delays in receiving planning permission for the EfW facility resulted in revisions to the original contract. Initially, Sita’s planning application for the EfW facility was denied by the Cornwall County Council in March 2009. The company appealed the decision and was granted planning permission in May 2011. That decision was challenged by opponents, and the U.K.’s High Court upheld the appeal in October 2011.

In the latest iteration, the U.K. Secretary of State appealed that judgment, and on March 29, 2012, the Court of Appeal allowed the Secretary of State’s appeal and confirmed the validity of the Secretary’s decision to grant planning permission for the Cornwall Energy Recovery Centre.

Despite the delay in the EfW facility, Sita notes that since the contact was signed the company has undertaken a number of investments, including spending around €30 million to upgrade its recycling centers and building new projects in the region.

Jean-Louis Chaussade, CEO of Suez Environnement, says, “This is a significant PFI contract for Suez Environnement and Sita UK. Building on a strong performance in the delivery of the first six years of this contract 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.”