Derbyshire councils invite bids to revive controversial and costly waste treatment facility - after £93.5m out-of-court settlement
Two Derbyshire councils have announced that bids are being invited from the waste industry to finally fix and operate a jointly-owned waste treatment facility which had originally been at the centre of an expensive dispute that resulted in a £93.5m out-of-court settlement payout by the authorities.
Derbyshire County and Derby City councils originally agreed to pay the settlement to Resource Recovery Solutions’ waste management team’s administrators after the councils terminated a contract for the waste management team to manage their jointly-owned waste facility, at Sinfin, Derby.
And after the county and city councils resolved in January, 2024, to fix and operate the temporarily-closed waste treatment facility following their own disagreement over a county-council issued invoice to the city council for tens of millions of pounds for project costs, both have since reaffirmed their joint commitment.
Cllr Simon Spencer, Derbyshire County Council’s Cabinet Member for Corporate Services and Budget, said: “Having the waste treatment centre process non-recyclable household waste is more sustainable than transporting material around the country and reduces the risk of the councils being exposed to uncontrollable market prices in the future.
“We look forward with confidence to progressing the project to provide both councils with the most viable and cost-effective, long-term solution for the management of household waste, to benefit residents in both the city and county.”
The county and city councils revealed on Monday, January 6, 2025, that bids from the waste industry are now being invited for a contract to fix and operate their facility which both councils hope will reopen by 2028.
Both councils have reaffirmed their commitment to the original decision, made in February 2023, to work in partnership to get their waste treatment centre at Sinfin operational, according to the county council.
The county council stated fixing and operating the facility has been found to be the most viable and cost-effective, long-term solution to manage household waste from the city and county, taking into account both councils’ ongoing commitment to encourage residents to reduce, reuse and recycle more waste.
Market testing undertaken throughout 2023 confirmed there was capability, capacity and appetite in the market to deliver the project, according to the county council, and an exercise to shortlist bidders is expected to take place in February leading to the award of a contract in December, 2025, with the commissioning of the facility in June, 2028.
It is anticipated the waste treatment centre will start to accept waste again from across the city and county in November, 2028.
Cllr Ndukwe Onuoha, Derby City Council’s Cabinet Member for Streetpride, Public Safety and Leisure, said: “We still need a long-term, more sustainable solution to manage household waste which residents in Derby and Derbyshire either cannot or choose not to recycle.
“The councils are confident there is a competitive market for this project and the operators with the skills and experience to successfully deliver the project and its expected benefits.
“The councils have developed a procurement process and commercial proposition that we are confident will be attractive to suitably qualified and experienced companies and lead to a successful contract award.”
Originally, Derbyshire County Council and Derby City Council had awarded a contract in 2009 to Resource Recovery Solutions – which was a partnership between infrastructure firm Interserve and waste management company Renewi – to manage the councils’ residual waste, design, build, commission, and operation of the waste treatment facility in Sinfin, Derby.
However, the county council revealed, in July, 2023, that both councils had agreed to pay a share of a total £93.5m out-of-court settlement to RRS’s waste management team’s administrators to resolve a dispute after the local authorities had terminated a contract with the waste management team to manage the waste facility.
Derbyshire County Council stated RRS had originally paid for the facility which under the county and city councils’ original contract with RRS was to be designed, built and completed in 2017 to divert 190,000 tonnes of waste per year away from landfill.
But the county council added that after RRS failed to pass commissioning tests by an agreed date the authorities lawfully terminated the contract in August, 2019, and the councils and RRS began a process to determine the Adjusted Estimated Fair Value compensation of the contract to be awarded to either RRS or the councils.
Both councils resolved in July, 2023, to accept an out-of-court settlement arrangement and pay RRS £93.5m to protect council tax-payers from the risk of further significant costs after RRS’s administrators had originally claimed they were owed £187m, according to the county council.
The county council had stated this total settlement sum of £93.5m had been shared by the councils in accordance with an agreed split with £36.57m paid by the city council and £56.93m paid by the county council.
Following the settlement, Derby City Council then disputed the validity of a county council invoice forwarded to the city council for £93.9m plus VAT for project costs and this had triggered a further dispute which included the county’s refusal to formally include regular reviews of project progress against the business case to fix and operate the facility.
However, both councils resolved in the summer of 2024 to fix and operate their waste treatment facility after a new Inter Authority Agreement was reached and agreed in full which means both councils have been moving forward in partnership to complete the project.
Derbyshire County Council previously confirmed the £93.9m plus VAT invoice was to recover the county council’s share of the costs of the waste site project and this was separate to both councils’ shared £93.5m settlement figure which was previously agreed to be paid to RRS’s administrators.
The councils have stated they remain committed to the original decision, made in February 2023, to fix and operate the existing plant, after soft market testing with positive engagement from the waste industry confirmed a capability, capacity and appetite to deliver the project.
Campaigners and residents have also previously complained that the Sinfin waste site will pose a threat to air quality.