Issue - meetings
Waste Disposal Options
Meeting: 08/10/2025 - Executive (Item 34)
34 Waste Disposal Contract: Tees Valley Energy Recovery Facility 
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Report for Decision.
Additional documents:
Decision:
ORDERED that Executive:
1.
Approves an amendment to the report so
that recommendations in the report that reference delegated authority in
consultation with the Mayor should also include
“relevant Executive Member with portfolio responsibility” where
applicable.
2.
Approves the creation of the Local
Authority Special Purpose Vehicle (LA SPV).
3.
Appoints the Director of Environment and
Community Services as the Council’s Director on the Board of the LA SPV and
authorises them and any successors; or any substitute or deputy appointed by
the Director of Environment and Community Services should they be unavailable,
to take all decisions on behalf of the Council as Director on the Board of the
LA SPV for the good governance of the LA SPV and the Energy Recovery Facility.
4.
Authorises the Council to subscribe for
shares in and to be a shareholder of the LA SPV; and to issue a Shareholder
Resolution to approve and adopt the Articles of Association.
5.
Appoints the Section 151 Officer as the
Council’s Shareholder Representative and Authorises that Shareholder
Representative to appoint an alternative representative to act as their
substitute or deputy and authorises the Shareholder Representative and their
alternative to make decisions under the Shareholder Agreement, articles of
association etc including the making of shareholder resolutions, including a
shareholder resolution to approve and adopt the Articles of Association on
behalf of the Council.
6.
Authorises the Council to enter into the
Shareholders’ Agreement and Delegates Authority to Director of Environment and
Community Services (in consultation with the Mayor and
supported by the Monitoring Officer and Section 151 Officer) to finalise and
agree and enter into the Shareholder Agreement.
7.
Delegates Authority to Director of
Environment and Community Services (in
8.
consultation with the Mayor
and supported by the Monitoring Officer and Section 151 Officer) to authorise
the LA SPV to enter into the Shareholder Agreement.
9.
Authorises the LA SPV the enter into the
Service Level Agreement and Delegates Authority to the Director of Environment
and Community Services (in consultation with the Mayor
and supported by the Monitoring Officer and Section 151 Officer) to finalise
and agree the Service Level Agreement.
10. Authorises
the Council to enter into the Waste Supply and Support Agreement (“WSSA”) and
Delegates Authority to the Director of Environment and Community Services (in
consultation with the Mayor and supported by the
Monitoring Officer and Section 151 Officer) to finalise, agree and enter into
the WSSA with the LA SPV.
11. Delegates
Authority to the Director of Environment and Community Services (in
consultation with the Mayor and supported by the
Monitoring Officer and Section 151 Officer) to authorise the LA SPV to enter
into the WSSA.
12. Authorises the LA SPV to award the Contract, enter into the Project Agreement with the successful Contractor and to enter into the 50 year lease with Teesworks for the site and Delegates Authority to the Director of Environment and Community Services (in consultation with the Mayor and supported by the Monitoring Officer and Section 151 Officer) to ... view the full decision text for item 34
Minutes:
The Executive Member for Environment and Sustainability submitted a report for Executive consideration. The purpose of the report was to set out the decisions and delegations the Council needs to take to be able to work with the other authorities in respect of undertaking financial close with the preferred bidder and the subsequent structures for managing the disposal contract.
Seven Local Authorities had joined together to procure a contractor to design, build, operate and finance a new Energy Recovery Facility to be located in the Tees Valley (TV ERF).
The seven Councils which include Darlington Borough Council, Durham County Council, Hartlepool Borough Council, Middlesbrough Council, Newcastle City Council, Redcar and Cleveland Borough Council and Stockton Borough Council (the Authorities) had a statutory obligation to provide waste management services to their collective 1.5m residents. The Tees Valley Councils currently operated residual waste disposal services as a group under a single contract with Suez and which included Redcar and Cleveland Borough Council, Hartlepool Borough Council, Stockton Borough Council and Middlesbrough Borough Council. Darlington Borough Council was part of the group but currently had its own separate waste treatment and disposal contract. Durham County Council and Newcastle City Council currently had their own separate residual waste disposal contracts with SUEZ.
All existing waste treatment / disposal contracts with SUEZ had been extended to cover the period until the new ERF was in operation.
To align with these dates, the procurement programme was originally due to have Final Tenders submitted and evaluated in early 2022, with a Preferred Tenderer to be appointed by July 2022 and Contract Award / Financial Close aimed to be achieved by November 2022.
The project was now at a stage where a preferred bidder had been selected, and seven local authorities were working towards financial close of that procurement process.
Middlesbrough along with six other Local Authorities in the North East had undertaken a procurement for the disposal of residual waste. The Council was now at a stage in that process where a preferred bidder had been nominated and was working towards financial close of that procurement process. The price per tonne achieved through the procurement process was currently £143, which was the average price over the life of the contract at 25/26 prices and indexed at CPI. This was below the ceiling limit that was set.
The negotiations would continue to financial close with a view to reducing the price per tonne further.
The 2025/26 budget for residual waste disposal was £5.6m. The price paid under the current arrangements for residual waste disposal was £128.29 per tonne with an estimated inflationary rise to £144.97 per tonne in 2029/2030. The average annual
tonnage was currently around 39,000 tonnes. This was expected to reduce over the next several years following the introduction of the Government’s Simpler Recycling Initiatives.
In order to allow the council to fulfil its requirements as part of the process there are a
number of decisions and delegations that need to be made and granted. These are ... view the full minutes text for item 34