Two Hampshire councils have opted not to take up an optional seven-year extension on a waste collections contract with Veolia beyond its 2018 expiry date – having not been able to agree a price for the service.
Now, Basingstoke & Deane borough council and Hart district council are seeking to appoint a ‘suitably experienced’ operator to provide the service under a new joint contract valued between £36-41 million.
Collections in Basingstoke have been operated by Veolia since 2011
The contract, which will commence when the current arrangement with Veolia expires in October 2018, will run for a period of eight years, and according to Basingstoke & Deane borough council will bring ‘greater opportunities’ for cross-boundary working.
The decision to retender the service was taken by Basingstoke & Deane borough council last month (19 January). This comes months after Veolia requested a ‘top-up payment’ for the remaining years of the contract plus a revised sum to continue into the seven-year extension period originally agreed.
According to a report on the management of the joint waste contract, put to Basingstoke’s Overview & Scrutiny committee last month, the deal has delivered ‘significant savings’ for both councils since it began in 2011 (see letsrecycle.com story).
Finance
However, the report adds that Veolia has previously stated in 2015 it was ‘losing money’ on the contract – and would only agree to an extension if a revised figure could be agreed. It continues that despite ‘numerous requests’ for additional information and a ‘high level meeting’ between the authorities and Veolia executives, it has not been possibly to verify the expected cost of the contract.
The councils hope the next contract will create opportunities for cross-boundary working
In May last year the councils commissioned consultancy White Young Green to prepare a shadow bid which verified that the market value of an extension was ‘broadly in line’ with the sum currently paid by the authorities (see letsrecycle.com story).
Retender
Retendering the joint contract is expected to cost the councils between £60,000 and £120,000 with the cost split equally between the two councils.
In addition, the report adds that retendering will bring greater opportunities for ‘cross-boundary working’ with a saving in the number of spare vehicles which the contractor holds.
The contract also includes an option for Basingstoke & Deane council to switch from weekly to fortnightly collections of refuse, in a bid to save up to £1 million per year.
The report notes: “Having consulted with potential suppliers they are clear that a joint contract is far more attractive for bidders, resulting in increased competition and hence lower prices than would otherwise be the case. It is therefore proposed that the joint management arrangements continue.”
Commenting on the renewal, a spokesperson for Veolia, said: “Our contract with Basingstoke & Deane and Hart councils comes to an end in September 2018 and the council has commenced its procurement process.”
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Source: letsrecycle.com Waste Managment
