The Joint Executive Committee were advised of the recent Materials Recovery Facility (MRF) market engagement event that was held at Gateshead International Stadium.
Gateshead and South Tyneside councils’ MRF contract for dry recyclables with Palm Recycling Ltd, commenced service on 1 April 2014. A 36-month contract extension to 31 March 2021 was agreed in 2018.
Sunderland City Council’s separate MRF contract commenced service with J&B Recycling on 1 April 2015. Similarly, a contract extension period to 31 March 2021 has been agreed with the contractor.
As the maximum contract extension periods for both MRF contracts have been agreed, this means that all three partner authorities will require new MRF arrangements from 1 April 2021.
However, in planning for the procurement of the next MRF contract, the ongoing uncertainty within the waste sector must be considered. This includes the impact of the Chinese recycling import restrictions; the outcome of the negotiations for the UK to leave the EU; and the implications arising from the recent publication of the resources and waste strategy, ‘Our Waste, Our Resources: A Strategy for England’.
It was agreed that to further support the development of the next MRF contract specification, it was important for STWWMP to arrange a market engagement event so direct dialogue with potential service providers could be held. This enabled a number of issues to be discussed, such as:
· The viability of the current kerbside recycling collection system and consider potential alternative options.
· The optimum contract length for the STWWMP MRF contract commencing in April 2021.
· The viability of constructing a dedicated STWWMP MRF or waste transfer station within the partnership area.
· The management of risk and reward in relation to market prices and contamination levels within the next MRF contract structure
The Joint Executive Committee were advised that STWWMP approached the national Waste and Resources Action Programme (WRAP) to enquire if any independent support was available to assist with the development of the next MRF contract specification. WRAP subsequently agreed to fund free-of-charge support, and STWWMP participated in a formal procurement process, which appointed renowned environmental consultants Eunomia Research and Consulting to support STWWMP.
The STWWMP market engagement event was held on 27 February 2019 and 10 companies participated with current MRF contractors also involved.
Representatives from WRAP and Eunomia attended the event as observers and facilitated a short plenary session after the event closed to discuss initial feedback from the face-to-face discussion with service providers.
A full analysis and evaluation exercise following the event will now be undertaken and this will be delivered through a dedicated workshop with the STWWMP Officer Project Board to discuss a full options appraisal exerciser to consider a range of issues that STWWMP must address in developing the next MRF contract specification, including:
· Collection models
· The legislative context and potential impacts on local authority waste management,
· Pricing structure, and
· Current factors affecting the MRF market
This will enable a procurement ‘road map’ and action plan to be developed, so that STWWMP can develop an appropriate MRF contract specification that provides the best value to the partner authorities and is commercially attractive to service providers within the market.
That the information be noted
Agree to receive further updates regarding the development of the next STWWMP MRF contract specification, as appropriate