October 1 2014 Latest news:
Monday, March 31, 2014
It is time to pull the plug on the county’s proposed incinerator - that is the shock recommendation from officers at Norfolk County Council, who say the compensation they would have to pay would be dwarfed by future costs if the saga drags on.
At an extraordinary meeting of Norfolk County Council next Monday (April 7) councillors are due to vote on whether to axe the controversial incinerator proposed at King’s Lynn once and for all.
With communities secretary Eric Pickles yet to decide whether to ratify planning permission for the plant at Saddlebow, opponents of the scheme have secured a vote on whether to scrap it.
A report by County Hall’s own officers, published today, makes the shock recommendation that the council should terminate the contract, before the cost of pulling out of the plant starts going up by £400,000 every month.
The recommendation - which would mean the council would have to pay contractors Cory Wheelabrator £30.26m if it is agreed - was revealed in a report put together by Tom McCabe, the council’s interim director of environment, transport and development, head of finance Peter Timmins and acting managing director Anne Gibson.
The report, which will go before councillors on the day of the crunch vote, states: “The capped compensation for termination for planning failure increases from £20.3m to around £25m from May 2014.
“In addition, each month after that, the capped figure would go up by another £400,000.
“This would mean that a negative planning decision after May 2014, or a successful challenge to a positive planning decsion, would incur higher overall termination costs, currently estimated at £30.26m.
“That is because the capped element of this overall cost, currently fixed at £20.3m, would increase to around £25m from May 1 2014, rising by £400,000 per month thereafter.
“Meeting those costs would present the risk of greater implications for services than a decision to reject an increase to the breakage cap now.”
The officers also state that the delay in Mr Pickles making a decision is reducing the value for money of the plant.
A public inquiry was held last year and the planning inspector’s report - and recommendation - has been handed to Mr Pickles.
A decision was due to be made on or before January 14, but that date passed without a decision.
Officers state: “In value for money terms, the contract is now estimated to save around £12m, compared to the cost of landfill.
“This is reducing at the approximate rate of £140,000 per day because the delay is forcing the cost up and also reducing the payback period for savings.
“This presents the risk that the guaranteed value for money of the contract compared to landfill will reduce to nil before a planning decision is given and the proposal can go ahead. This point will be reached in June.”
The report said the savings could be increased by other factors, such as increased income from electricity, but that there was no guarantee that would happen.
In its budget, the county council has built up a £19m ‘war chest’ in case it has to pay compensation to Cory Wheelabrator.
The officers state: “The remaining £11m could be achieved within the necessary timescale, albeit with a significant impact for services.”
Click here for story on previous incinerator vote being scrapped
Click here for a story on the plans first going on show to the public
The council would then need to find an alternative solution, both in the short-term and in the long-term. The short-term solution could see waste sent to the incinerator at Great Blakenham, in Suffolk, or to burners in Lincolnshire.
In October, the county council voted, by 40 votes to 38, to agree a revised project plan for the incinerator. Officers had warned scrapping the burner could lead to a pay-out of up to £100m - a claim which opponents had said was incorrect.
But Labour council leader George Nobbs: “When the facts change, our position changes. There was a real fear of bankruptcy if we had terminated in October and there is no fear now due to our prudent action.
“When we knew last year there was a possibility we might be in this position again, we made financial provision and officers have been exploring other options in the short term.
“The energy from waste plant would not have been operational for a number of years and we are already sending 40,000 tonnes of waste a year to Kent.
“We have been in open talks with Suffolk County Council on a wide range of issues and this is foremost among them.
“There are two incinerators in Lincolnshire, one within 10 miles of King’s Lynn. Of course, there are no easy answers, why is why previous administrations have come to the conclusion an energy from waste plant was the solution.”
When asked whether the long-term solution could involve an incinerator, Mr Nobbs said: “We have just got out of the frying pan and I do not intend to get into the fire. The contract was not thought out, the long term implications were not thought through and I do not want to repeat that again.
“Whatever happens, it has to be well founded and based on all available evidence. We need to take a long, hard look at the future of Norfolk’s waste. The people of Norfolk would not want anything else.”
In a poll organised by West Norfolk Council in 2011, 65,000 people said they did not want the incinerator, but the Conservative administration decided to push ahead with awarding the contract to Cory Wheelabrator.
In October last year, the government announced it was cancelling the £91m of waste credits it had awarded to the project, which would have been worth £169m over the life of the contract.
While the campaigners who have long protested against the plant are likely to think otherwise, Mr Nobbs said there would “no winners” if the contract is terminated.
He said: “I understand the temptation for some people to be feeling pretty satisfied, but this is not a time for rejoicing or pealing church bells, because there are no winners in this.
“This process will have been extremely costly to taxpayers and has done untold damage to relations countywide.
“It is my wish now to heal the breach between west Norfolk and the rest of the county. To that end, our work starts now.
“It is Norfolk men and women who will have to pick up the bill.”
If the council agrees to terminate the contract, the controlling Labour/Liberal Democrat cabinet will have to decide whether to agree to do so - with the meeting taking place straight after the full council meeting.
If the council does terminate the contract, Cory Wheelabrator could, in theory, look to sue the authority or the government.
See tomorrow’s EDP for a five-page special report on the latest development in this long-running saga.