Costain agrees deal to exit Manchester waste PFI

Aaron Morby 4 years ago
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Costain has finally struck a deal to exit its Greater Manchester waste PFI contract with operator Viridor Laing (Greater Manchester).

One of several major waste facilities built by Costain
One of several major waste facilities built by Costain

The firm said the settlement covered all of the contractors obligations on the project and was in line with previous provisions.

It will now demobilise all of its activities on the project to hand-over facilities by the end of September.

Over the last three years Costain has revealed ever mounting losses on the £400m legacy waste facility contract awarded a decade ago, which covered providing 46 facilities across 23 locations.

The project had been hit by design problems and the failure of a key subcontractor TEG which was providing compositing facilities,

As a result it vowed in 2014 to pull out of bidding waste sector projects altogether.

Last year alone Costain revealed a £15m loss in relation to completing the legacy PFI contract.

Earlier this year the Greater Manchester Waste Disposal Authority confirmed it planned to exit its £3.8bn, 25-year PFI contract with operator Viridor Laing joint venture amid mounting frustrations about repair works and value for money.

The authority said it had become frustrated with the progress being made on these works, including “significant rusting issues” in the mechanical and biological treatment plant tanks and the in-vessel composting facilities.

A consultants report for GMWDA also revealed volumes of waste were now lower than expected when facilities were proposed in 2006-07 and that the Greater Manchester contract was expensive compared with current market rates.

The authority now plans to retender waste handling to get a better deal for the greater Manchester region. Until April 2019 Viridor Laing will continue as the main operator.

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