Renewi plc, the international waste-to-product business, today announces that it is in discussions with Dumfries and Galloway (“D&G”) Council and other stakeholders to initiate the termination of its loss-making PFI operating contract.
The D&G PFI project is unable to address the needs of Zero Waste Scotland (“ZWS”) legislation that sets demanding new requirements regarding landfill diversion and recycling from 2021.
Renewi has been working with D&G Council and other stakeholders for a number of years to determine how this 15-year-old PFI waste project and the related operating contract could be amended to meet the requirements of ZWS. However, despite these discussions, a workable solution compliant with ZWS has not been found.
“Terminating the operating contract is not a decision we have taken lightly and we will work with D&G Council, our employees and our other stakeholders to ensure a seamless transition.”
Accordingly, Renewi has initiated a termination of the operating contract, which is held between Renewi UK Services Ltd and Shanks Dumfries & Galloway Limited. It will enable D&G Council and other stakeholders to explore new ways to comply with the obligations of ZWS. The proposed termination of the operating contract is expected to become effective in the next financial year.
The remainder of Renewi’s Municipal Division is unaffected by this termination. As previously announced, the Division is performing largely in line with revised expectations for the year, delivering operational progress against its recovery plans.
Commenting on this decision, James Priestley, managing director of Renewi’s Municipal Division said: “Regrettably, the D&G PFI project and Renewi’s operating contract do not currently meet the objectives of the new Zero Waste Scotland legislation.
“Terminating the operating contract is not a decision we have taken lightly and we will work with D&G Council, our employees and our other stakeholders to ensure a seamless transition.
“Whilst our termination discussions are taking place, we will continue to ensure a high-quality and efficient service to the Council and the residents of Dumfries and Galloway. This decisive action is in line with our strategy to actively manage our portfolio of UK assets to reduce future risk.”