Issue - meetings

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Deputy Chief Executive (Place), that would also be considered at the meeting of the City Council on 3^rd September 2019, on the proposed development of a regional materials recycling facility with partnering authorities. A Site Location Plan was attached as an Appendix to the report.

A corresponding private report was also submitted to the meeting setting out the commercially confidential matters of the proposals. (Minute 28 below refers.)

Coventry City Council currently paid c.£1.6million per year to the private sector for the treatment of recyclable material collected in Coventry (including haulage to the treatment facility in London and any recyclate value benefit). This cost had increased substantially over the last five years. Evidence from recent procurement exercises in both Coventry and neighbouring authorities showed that this upward trend of cost was likely to continue with substantial rises as the private sector continued to move the risk of end market prices and legislation more and more to local authorities.

In 2017/2018 a feasibility study was undertaken to consider the technical and economic viability of developing a Material Recycling Facility to serve Coventry City Council (CCC), neighbouring authorities, and commercial businesses across the region. This study indicated a positive business case, subject to more detailed information. During the last 12 months a detailed Business Case was developed to determine the viability of a Materials Recycling Facility, which concluded that a facility with a capacity of 120,000 – 175,000 tonnes would be commercially viable. CCC currently collected c.24,000 tonnes of recyclable waste per annum.

To make the construction of a Materials Recycling Facility financially viable and, in order to share the risks and benefits of this project, a formal agreement has been formed with five other local authorities: Nuneaton and Bedworth Borough Council; North Warwickshire Borough Council; Rugby Borough Council; Solihull Metropolitan Borough Council; and Walsall Council.

The Business Case considered in this report had therefore been developed assuming the recyclable materials from each of these authorities would be committed to the Project, thereby making the facility cost effective, whilst leaving some tonnage head room for commercial growth and the future needs of the Partner Councils, or the addition of more Partner Councils.

To date the costs of producing the business case had been shared by the partners based on the ratio of their likely tonnage inputs. Along with an investment proposal, this report sought authority to further strengthen these arrangements through a second Joint Working Agreement which would cover the work up to financial close, including but not limited to the costs of procurement, advisors, and the submission of a planning application for the construction of a new Material Recycling Facility.

At financial close, the Partner Councils would be required to establish jointly an arms-length company (AssetCo) to enter into contracts and to deliver the recycling solution, funded through loans from the partners councils.

The existing Local Plan had made provision for future waste management facilities in Coventry by allocating the  ...  view the full minutes text for item 23