What are the implications for Strategy and Procurement?
Launched on Friday the second round of consultations on Consistent Collections provides a greater steer on direction for municipal waste services from 2023 onwards. Throughout the consultation there is proposed to be consideration of existing arrangements and contracts and for meeting net cost burdens for Councils in terms of capital costs (bins / boxes / vehicles), transition costs (communications, re-routing) and operating costs (for example from greater collection costs or gate fees).
Our first blog pulled out some key issues of interest, this part looks at some strategy and procurement implications.
Strategy
A key part of the development of a Municipal Resource and Waste Management Strategy is the assessment of options. We are currently delivering this exercise for ‘two tier’ authority areas, and an initial starting point is modelling the baseline services on collection, recycling, treatment and disposal to use as a basis to compare alternatives against. Following this, a comparison against policy influences is undertaken in order to derive a long list of alternative waste management systems.
The Deposit Return Scheme and Extended Producer Responsibility consultations guide the amount and nature of wastes that the Councils will deal with and provide some revenue (for relevant waste streams), for its management post 2023.
The Consistent Collections consultation guides the manner of collection and therefore connotations for recycling, composting, digestion, treatment and disposal. Therefore, in terms of options to evaluate through a Strategy process, these will now all consider the key consultation themes: free garden waste collection; weekly food waste collections; the full suite of collection materials (including cartons, film, foil, PTTs, aerosols), and less emphasis on three or four weekly residual collections.
The operational performance, cost and carbon implications of these alternative systems can be measured using tools by WRAP, the EA, the waste industry or bespoke models.
The existing infrastructure in terms of depots (e.g. are they large enough?), transfer stations and waste management facilities can then be assessed, in the light of existing contracts (see below) for any shortfalls or new requirements. Actions around site searches or critical pathways for procurement can be identified to enable considered implementation of new requirements.
Procurement
The current contracts, their duration, thresholds, Performance Mechanisms, Paymechs and operational parameters may be substantially impacted by the measures within the Resources and Waste Strategy for England and its implementation.
Relevant contracts range from collection, to recycling / MRFs, to treatment (AD/MBT/EfW/composting). These may entail renegotiation, variation, termination or may be able to run their course in their current form until the point of re-procurement. On the latter point Government is offering support through WIDP or WRAP for some contractual aspects, notably around residual treatment where contracts tend to be longer in duration. There will be a complex balance for residual waste contracts as the character of the waste is more important for treatment facilities like Energy from Waste (EfW) and Mechanical Biological Treatment (MBT). These may depend on a level of biological activity (MBT) for example to derive biogas, or calorific value (EfW) in order to derive electricity revenue. This could have a double impact of less waste arising to the contractor and a less valuable composition. These aspects require careful consideration in the context of the contract requirements and pragmatism.
Contracts for Materials Recycling Facilities (MRFs) tend to be of shorter duration unless wrapped within a more integrated contract with treatment and disposal. If the latter is the case then there will be major impacts on the MRF process by the combination of DRS, EPR and consistent collections. A lot of the valuable materials (aluminium, steel, PET bottles) will be removed from the recyclate stream, to be partly replaced by materials that are more difficult to process and have less value (film, cartons, pots, tubs and trays).
There may well be new procurement requirements in the form of; boxes / bins; food waste liners; vehicles; Anaerobic Digestion (AD) capacity; green waste composting capacity. These can impact on both trade waste management services and household waste management services. A key element in terms of vehicle procurement is the production lead time, we have already seen, for example for Romaquip type vehicles, periods of >1 year. And these lead times will be exacerbated by substantial demand, for example for specialist food waste vehicles.
There will be an enhanced demand for anaerobic digestion capacity and the low cost gate fees experienced in recent years may not be maintained in the longer term. Green waste composting capacity is likely to have a renaissance as Councils convert to free garden waste collections.
A key element of the delivery of the Resources and Waste Strategy will be the available capacity and location of waste treatment infrastructure for material recycling and processing, digestion and composting. At present England has insufficient infrastructure to process and treat wastes, and funding, planning and construction is required in a relatively short period of time. Will the government, local authorities or the private sector have the appetite to invest in this?
This blog touches on a range of issues associated with strategy and procurement in the light of the major changes in our sector, there will be more updates via our newsletters and blogs on this site. To be registered for newsletters please email below.
Frith Resource Management Limited provide procurement support to Councils in the UK and internationally, and can provide bespoke support to meet individual requirements. See Procurement Technical Advice (frithrm.com) email paul@frithrm.com or call on 01746 552423