Decision details

Delegation of authority to the relevant directors to progress the Council’s district heating network strategy and to exercise contractual cost saving options relating to the Residual Waste Treatment PFI contract.

The Director of Environment and Housing submitted a report providing an update on the progress made towards the delivery of a district heating network linked to the Recycling & Energy Recovery Facility (RERF) as part of the Residual Waste Treatment Project, and also on a range of potential benefits and options for achieving substantial cost reductions through this project. In addition, the report sought approval of the delegation of appropriate authority to the relevant Directors in order to exercise specific contractual cost saving options, to instruct Veolia to install elements of infrastructure at the RERF necessary for the export of heat from the site, subject to further technical and financial assessment, and also to explore other potential value for money opportunities.

Officers responded to Members’ enquiries around the Non-Reverting Asset option as detailed within the submitted report and also regarding how the energy used as part of the District Heating Scheme could be maximised.

In conclusion, Members welcomed the report and noted the wider opportunities, particularly in respect of infrastructure provision, that the initiative could potentially help to offer in the future.

RESOLVED –

(a)   That the contents of the submitted report, including the progress made on feasibility work for a district heating scheme linked to the Recycling and Energy Recovery Facility (RERF) as part of the Project, together with the community benefits associated with the Project, be noted;

(b)   That the Director of Environment and Housing be authorised to approve the installation of initial infrastructure at the RERF which will be necessary for the delivery of a district heating scheme (as described at sections 3.1.9-3.1.12 of the submitted report), subject to his receipt of a further satisfactory technical and financial assessment and subject to the timescales detailed within section 3.1.12 of the submitted report;

(c)   That approval be given for the implementation of the Non Reverting Asset option in relation to the Project (as described at sections 3.2.2-3.2.11of the submitted report), in order that the Director of Environment & Housing can take the decision subject to DEFRA approval and subject to the Deputy Chief Executive determining that there are no accounting treatment issues following consultation with the Council’s external auditors by the Extended Commissioning Date currently anticipated to be 25th March 2016, although subject to programme;

(d)   That following the agreement of resolution (c) above, it be noted that the Director of City Development will arrange for disposal of the RERF site for an additional 15 years at the appropriate time and in accordance with the Asset Management functions in the officer delegation scheme;

(e)   That approval be given to an injection into the City Council’s Capital Programme together with the associated  authority to spend £30,000,000 as a Capital Contribution to the Project (as described at sections 3.2.12-3.2.18 of the submitted report) by the Actual Full Payment Date (currently expected to be 8th July 2016, although subject to programme change and subject to DEFRA approval);

(f)   That the necessary authority be delegated to the Deputy Chief Executive in order to negotiate and agree to further proposals with Veolia for an increased Capital Contribution of up to an additional £12,000,000, should this (in the Deputy Chief Executive’s opinion) represent value for money, this will be subject to DEFRA approval and also subject to the Deputy Chief Executive determining that there are no accounting treatment issues following consultation with the Council’s external auditors by the Extended Commissioning Date, currently anticipated to be 25th March 2016, subject to programme;

(g)   That subject to resolution (f) above being actioned, approval be given to an injection into the capital programme and the associated authority to spend of up to £12,000,000;

(h)   That apart from those matters expressly set out in the resolutions above, it be noted that the Director of Environment and Housing will take any necessary action associated with the implementation of the above options in accordance with the timescales and Waste Management Function.

Executive Member consultation

Cllr Mark Dobson