Headlines: February 12th, 2007

SYSTEM OF WASTE PFI CREDITS TO CHANGE

 

Changes are being made to the system through which local authorities apply to Defra for waste PFI credits to help them pay for the infrastructure that will be needed if Britain is to meet targets for dealing with rubbish without sending it to landfill sites. Under the changes there will now be award rounds similar to those used by other Government departments rather than money being allocated on a first come first served basis.

It is estimated that it will cost 11 billion pounds for all the infrastructure needed for the UK to meet its targets for reducing dependence on landfill and the Government believes PFI has a key role to play. Under the old system local authorities could apply for credits at any time of the year but Defra believes this made it to difficult to assess the contribution each case could make to the overall PFI programme. The system was also thought to hinder the development of a proper pipeline management strategy.

The new arrangement will encourage a partnership approach to increase value for money. Priority will be given in line with a number of criteria including scale, feasibility of delivery, readiness and environmental objectives. A letter has been sent to all local authority chief executives by John Burns, the director of Defra’s Waste Implementation Programme, to explain how the system will operate.

As well as the move to award rounds, the changes include a requirement for Local Authorities to complete a new Planning Health checklist and the basing of eligibility in part on compliance with published PFI criteria and in part on additional criteria. Defra believes the strategy will help identify learning points from early projects and enable them to be applied to subsequent waves. It will also allow the Department to match the flow of procurements to the capacity of the market and Defra also expects the changes to encourage new entrants to the waste market and alleviate potential constraints on bid-side capacity which will improve the competitiveness of procurement processes and build momentum for the programme.