Waste has a key role to play in reducing greenhouse gas emissions. Public-private partnerships can help speed up the adoption and implementation of the most transformative waste programs.
Waste not, want not
One shining example is England’s PPP program for waste, which during the last few years has had a dramatic effect on the development of the waste infrastructure. This accelerated development has been achieved by the Department for the Environment, Farming and Rural Affairs (DEFRA), through its Waste Infrastructure Delivery Program (WIDP), a partnership among DEFRA, Infrastructure UK, and Local Partnerships. DEFRA, through WIDP, is providing funding support to a program of residual waste treatment projects across the country. It also acts as an expert resource to the projects in the pipeline, aiming to make the public sector a stronger, more effective client.
The application of PPPs to waste infrastructure has not been without controversy. A common concern relates to technology obsolescence, given the pace of technology development in this area. There is a presumption that technology will continually progress, making it difficult to commit to an investment decision based on technology. Furthermore, perceived concerns relating to health and concerns around the management of odor, noise, and traffic means that the development of waste infrastructure stirs strong opposition from the public and special interest groups. This makes planning or land use permission potentially challenging.
The waste PPP program in England was launched in a context of a PPP program that embraced a broad spectrum of infrastructure covering schools, hospitals, transport, and streetlighting. It has therefore taken time for all parties, both public and private, to become accustomed to the different issues and risks that waste projects present, including volatility of income streams from electricity and capacity at the facility provided to other parties.
Despite the continuing debate relating to the application of PPPs to waste, the issue of risk is key to the argument that the use of PPPs is appropriate and conducive to positive public sector outcomes in the waste sector. PPPs are fundamentally about risk transfer. The nature of residual waste treatment projects, given their use of process technology, means that they are inherently more risky than other PPP projects.
The South Tyne and Wear Waste Partnership
One particularly successful project within the WIDP program is the South Tyne and Wear waste PFI project, which closed in April 2011. The South Tyne and Wear project comprises a partnership of three U.K. Local Authorities (Gateshead, South Tyneside and Sunderland), covering 284,000 households across the South Tyne and Wear area. The objective of the three Councils and the project is to reduce the partnerships’ reliance on landfill via the procurement of a residual waste facility, and to provide the public with a greener waste management service. The project will reduce the amount of biodegradable municipal waste sent to landfill from 169,000 tons in 2009-10 to around 12,000 tons by 2020.
The waste solution comprises the development of an Energy-From-Waste (EFW) plant located in Teeside on a site adjacent to an existing EFW plant. The proposed facility will be enabled to produce Combined Heat and Power (CHP). The facility will offer a total capacity of 256,000 tons. The partnership will require initially around 190,000 tons, with the excess capacity available to treat additional third-party waste. The facility will open its doors in April 2014.