Warning over penalty costs in troubled waste scheme

Incinerator campaigners outside Allerton Park Quarry.  (130227M3b)
Incinerator campaigners outside Allerton Park Quarry. (130227M3b)

North Yorkshire County Council could be forced to pay financial penalties if it pulls out of its incinerator scheme, a senior official has warned.

The warning comes in a report produced by City of York council’s Head of Financial Procedures David Walker.

Both North Yorkshire (NYCC) and City of York councils could face a “contractor liability risk” if they pull out of plans for a waste incinerator at Allerton Park near the A1, it says.

“The project has so far cost North Yorkshire and City of York councils in excess of £6.5m to progress and there is a contractor liability risk to the Authorities in exiting from the procurement.”

Abandoning the project could also lead to higher landfill taxes for both councils, before they find and implement an suitable alternative waste scheme, the report adds.

Planning permission was granted in October 2012, but the plans have been in disarray since early March when the Government announced it would be withdrawing PFI funding from the site, along with two similar schemes.

NYCC have since criticised the Government decision.

David Bowe, NYCC’s Corporate Director of Business and Economic Services said: “We had been working closely with DEFRA for over seven years so we are very disappointed and surprised by the situation we find ourselves in.”

Discussions about the future of scheme are now going on with both DEFRA and the commercial contractors AmeyCespa, he added.

“We are now reviewing all aspects of the project with AmeyCespa to ensure it is the most cost effective and sustainable long term solution for the management of our residual household waste, and that it remains affordable and value for money.

“The withdrawal of Infrastructure Credits is a significant challenge in this process.”