STRATEGIC DIRECTOR OF ENVIRONMENT SERVICES

REASON FOR SELECT COMMITTEE CONSIDERATION

The Select Committee monitors the operation of the Integrated waste management contract on an annual basis.

ACTION REQUIRED BY THE SELECT COMMITTEE

To make any appropriate comments on the operation of the contract and general issues relating to waste management.

BACKGROUND

The Council’s Integrated Waste Management contract commenced in October 1997, and was groundbreaking in that it was the first truly Integrated Waste Contract of its type in the UK, and was also the first of its type under the provisions of the Governments Private Finance Initiative (PFI). This has allowed major investment to be made in the Islands waste management infrastructure. Under the PFI the Council also receives PFI credits of approximately £1.5m per annum. The contract is currently one of the largest currently operated by the Council. The contract was awarded to Island Waste Services (IWS) who were specifically set up to operate the contract. They are a fully owned subsidiary of Biffa Waste Services Limited. The contract has recently entered its seventh year.

The contract covers many service areas including waste collection; waste treatment; waste disposal, including landfill development, operation, restoration and monitoring; recycling including composting and backdoor and kerbside collection of recyclables; civic amenity site development and operation; and the operation of a Resource Recovery Facility (recovery of recyclables and fuel production).

The main thrust of the contract is the diversion of waste from landfill. High targets were set which were well in excess of the average recovery rates being achieved nationally, and which after year 4 of the contract increases incrementally by 1% on an annual basis. The current annual target is 31%. Diversion of waste from landfill has many advantages to the Council both financially and environmentally.

The original contract length was twelve years. The Council extended the contract by six years in the year 2000. The current contract will end in October 2015. Part of the basis of this extension was to allow IWS to make capital investment in the existing Waste Derived Fuel Plant, to convert it into a Resource Recovery Facility that would produce a partially densified floc fuel from the same feedstock as was processed by the WDF plant but which would also produce additional fuel from wastes that were un-processible through the existing WDF plant pelletisisation system. This increased the throughput and effectiveness of the plant, and hence diverted more waste from landfill. The existing power plant facility adjacent to the RRF facility also had to be converted to be able to accept the floc fuel. This is operated by another company, Combined Heat and Power (CHP) / Ener-G, with whom IWS have a separate contract for the supply of floc fuel. Works to modify the WDF plant commenced in January 2001. Since becoming fully operational recovery rates have increased significantly, and have on a number of occasions exceeded 50%, which was the desired outcome of the revised process. The average recovery rate for year 6 of the contract exceeded 45%

However, on the 31st October 2002, the power plant operation was closed and ceased to accept any of the floc fuel production from the RRF plant, following a prolonged period of discussions and negotiations between IWS and CHP concerning various operational and other issues. It therefore became necessary for IWS to source alternative markets for the floc fuel.

Alternative markets for the fuel do exist on the mainland, although the transport logistics of such an operation do create problems. Island markets have also been investigated, but found not to be viable. An outlet has been established at a Cement Works in Lincolnshire. Loads are now being sent to the Lincolnshire outlet with great success as far as the combustion process is concerned.

Waste will continue to be processed at the RRF plant with floc fuel being transported to the mainland. Extraction of steel and aluminium will continue at the RRF facility and the fine rejects from the plant will continue to be processed through the in-vessel composter at Lynnbottom.

To increase the efficiency in the delivery of floc fuel to the cement works in Lincolnshire, Island Waste Services have made an investment in a baling process. This has made the handling of the floc fuel easier and more economic for export to the mainland. In addition the quantity that can now be delivered on a daily basis has increased to approximately 55 tonnes. The machine will also be capable of baling cardboard for recycling rather than converting it to fuel or disposing of it to landfill. This will also improve the performance and efficiency of the main processing plant without its modification, and therefore not compromise operations in any way should the energy from waste plant be re-commissioned in the future.

Negotiations with the power generation plant owners are ongoing and Island Waste has made an offer for its purchase. If successfully concluded this will give overall control of the process to Island Waste Services. This will enable the RRF plant and adjoining power plant to be operated more efficiently with increasing levels of diversion from landfill.

A recent risk based audit undertaken by the Internal Audit section of the Council concluded that the ongoing partnership between Island waste Services and the Isle of Wight Council is operating successfully and continues to provide an excellent service to the public. Targets set by the best value regime, contractual targets, and the legislative requirements of both the UK and EU for both landfill and recycling are continuously exceeded and that the service has frequently been identified as an example of best practice. The following provides a few statistics about the waste management contract on the Island, and the attached table and graphs provides information on tonnages of various types of waste handled over the first six years of the contract, and the recovery rates achieved:

RELEVANT PLANS, POLICIES, STRATEGIES AND PERFORMANCE INDICATORS

General Information

Ø Number of Domestic Waste Collections per Annum 3.2 million

Ø Number of CA sites 3

Ø Number of Recycling / Bring to Centres 48

Ø Number of Green Buckets Issued to Date 17,931

Ø Number of Black Boxes Issued to date (paper, glass, textiles) 24,795

Ø Number of composters issued to date 2,792

Ø Landfill tax rate per tonne with effect from 1^st April 2004 £15

Ø Number of refrigerators disposed of April ’02 – March ‘03 6,496

New Unitaries Benchmarking Group IWC 2002/03 NUB Median

BVPI 82a – Percentage Waste Recycled 10.92% 10.86%

BVPI 82b – Percentage Composted 19.66% 4.56%

BVPI 82c – Percentage Heat and Power 17.21% 0%

Municipal Waste Targets

Municipal Waste management target for 2003 / 04 24% (achieved 30.58% 02/03)

Municipal Waste management target for 2005 / 06 36%

APPENDICES ATTACHED

Appendix 1 – Sample tracking of Tonnages.

An information pack has also been sent to members of the Select Committee with the agenda.