Incinerator Plans Finally Go Up In Smoke

7 April 2014, 17:00 | Updated: 7 April 2014, 17:11

Norfolk County Council has voted to terminate its' waste contract which sees the end of the King's Lynn Incinerator plans.

Norfolk County Council's Cabinet today (Monday 7 April) voted to terminate its waste contract with Cory Wheelabrator on the grounds of failure to secure satisfactory planning permission.

The decision followed an Extraordinary Meeting of the Full Council at County Hall, Norwich where after more than three and a half hours of debate, Members voted 49 to 29 (1 abstention) to recommend the Cabinet should terminate the contract, which centred on the construction of an energy from waste plant close to King's Lynn in West Norfolk.

In August 2012 the planning application for the plant was called in by the Government. Following a planning inquiry last year, the Secretary of State for Communities and Local Government, Eric Pickles, said a decision would be made on or before 14 January 2014. No decision has been announced, and a report to today's (Monday) Cabinet meeting recommended termination of the contract to minimise the potential financial impact of continuing delay, rising costs and increasing risks.

When the contract was signed, savings of over £250m were guaranteed over its 23 years, compared to landfill. The report to Council and Cabinet said the Secretary of State's failure to make a decision was costing around £140,000 a day, and by June the projected savings would have disappeared. The escalating cost of continuing delay follows the Government’s decision last November to withdraw Waste Infrastructure Grant worth £169m over the lifetime of the contract.

The cost of terminating the contract is estimated to be £30.26m, comprising capped compensation to Cory Wheelabrator of £20.3m, contractor public inquiry costs of £1.6m and exchange rate and interest rate related costs of £8.36m.

Cabinet agreed these costs should be met through a £19m contingency reserve built up for the purpose, £3m from the council's 2013/14 under spend, and £8m from general reserves, on the basis that the council takes immediate steps to replenish those reserves. Cabinet will consider the options at its' meeting on 12 May.

Background

• October 2013 Members of Norfolk County Council voted to continue with the project. At that stage the scheme was calculated to save at least £20m over the contract period compared to using landfill.
• The daily cost of the continuing delay is put at around £140,000 because the cost is rising and the end date of the contract remains fixed. Each day’s delay shortens the period over which payback and value for money is calculated.
• Norfolk County Council agreed to award a 25 year contract with Cory Wheelabrator in March 2011, to build and operate a power and recycling centre at the Willows Business Park in Saddlebow, near King’s Lynn. The contract is worth £600m. The contract award was the culmination of a long and rigorous procurement process which had been carried out with the close involvement of the Government. In December 2013, an independent QC reported that the contract award was sound.
• A £169m waste infrastructure grant was originally awarded to help support the project, but in November 2013 the Government decided to remove the grant.
• A public inquiry into the project was held in King’s Lynn in the Spring of 2013 and the inspector’s report was delivered to the Secretary of State in September with a decision promised on or before January 14 of this year.