A waste company’s factory plans were based on “little more than calculations on the back of the proverbial fag pack”, a high court judge has ruled.
Mr Justice Pepperall has awarded around £10million in compensation to Essex County Council (ECC) and the right to walk away from the £800million waste deal with Urbaser Balfour Beatty (UBB) over the Tovi Eco Park Facility in Basildon.
He concluded that the ongoing issues with the plant are due to flaws in the owner’s original design, as alleged by ECC, rather than the type of waste it processes, as the owner UBB alleged.
ECC said it is continuing to consider all options which, given the issues at the facility, include termination.
It adds that it has appropriate contingency arrangements in place and if waste cannot be processed at the plant, then in the short term it would be sent to landfill.
Residents will see no change to how their waste is collected.
The dispute centred on the biohalls at the centre of the facility which was meant to help with the reduction, re-use and recycling of waste and which minimised the amount of waste disposed through landfill.
But they were calculated to be about 50 per cent undersized, which the council said meant the facility could not meet the level of performance first planned for it.
But UBB claimed the wrong type of waste was being sent to the plant.
It was supposed to treat up to 417,000 tonnes of waste from Essex and Southend to ensure the amount sent to landfill was kept to a minimum.
The plant was meant to be able to divert 6.3 million tonnes of biodegradable municipal waste (BMW) from landfill over the life of the 25 year project and avoid the emission of some 2.4 million tonnes of carbon dioxide.
But the court heard because of the difficulties, a considerable amount that otherwise would have been diverted was being sent to landfill each year.
It was not, however, a cost-saving initiative.
Indeed, the authority estimated that it would require capital investment of £300million. A significant capital cost would be the development of a network of waste transfer stations across the county.
The base case predicted an affordability gap of £133.4million over 25 years.
In his ruling Justice Pepperall said: “The fundamental problem with this project was that UBB made a number of serious design errors.
“Its density assumptions were based on little more than calculations on the back of the proverbial fag pack such that the biohalls were seriously undersized and incapable of processing the guaranteed tonnage of waste.
“Its bid in respect of biodegradable municipal waste reduction was inadequately researched, ambitious and set with a view to scoring well in the procurement exercise. It has not been achievable.
“Its confidence that it could accept the composition risk and meet the performance guarantees notwithstanding significant variations in the waste proved to be misplaced.
“UBB therefore designed and built a facility that simply could not pass the acceptance tests.”
Due to the failure of the plant he awarded the authority damages in the agreed sums of £9,038,428 to the end of February 2019 and continuing losses thereafter at £99,563 per month.
Cllr Simon Walsh, Essex County Council Cabinet Member for Environment and Climate Change Action, said: “We are pleased that the judge supported our position that the issues at Tovi Eco Park are due to the original design and build of the plant.
“During the commissioning period we were aware that UBB was experiencing plant performance and process issues and worked closely with the owner to attempt to resolve these. Unfortunately, the contractor was unable to resolve these to our satisfaction and we referred the matter to the High Court for resolution, as part of the process laid out in the contract.
“We are delighted that the judge’s decision was in our favour and will now take stock and consider our options going forward.
“This result does not affect the collection of household waste across the county which will continue as normal.
“Since it began operating in 2014, the facility has been receiving and processing a considerable amount of the county’s residual (black bag) waste.
“While next steps are being considered, household waste will continue to be collected across the county and disposed of appropriately.”