Greater Manchester Waste Disposal Authority (GMWDA) has terminated its contract with Viridor 17 years early.
The authority signed the contract in 2009 and it was due to run for 25 years.
Viridor’s parent company, Pennon, said that GMWDA has financial challenges due to “prolonged austerity”, and that the company would seek compensation in regards to the termination.
Towards the close of 2016 however, John Laing PLC reported that GMWDA was “not satisfied with the current status” of the project and that it continued to “seek significant cost savings” as a result.
The deal had Viridor handling approximately 1.3 million tonnes of waste a year generated by Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, and Trafford councils.
The company also developed over 40 waste facilities at a cost of more than £600 million.
In a statement GMWDA said that it had terminated the deal and that “the decision allows for delegation for offices to progress termination. At this time we are unable to comment further.”
A statement by Pennon Group said that:
Diversion of waste from landfill remains ahead of contractual commitments and Viridor and its partners are keen to ensure this progress is able to continue.
“Viridor and its joint venture partner John Laing have been actively engaging with GMWDA as they have worked to consider their options. Following a GMWDA meeting held on 26 April 2017, GMWDA has now confirmed it is seeking an exit from the Recycling & Waste Management Private Finance Initiative (PFI) contract. This contract relates to Viridor Laing (Greater Manchester) Limited.
“Discussions and negotiations are now expected to progress over the coming weeks as we work with GMWDA to ascertain the implications. There are provisions in the PFI contract for compensation to be paid to Viridor and John Laing on termination.”
It is expected that jobs will be transferred to any new contractor and that compensation will be paid.
