DWF advises waste authority on termination of £3.8bn PFI contract

Law firm DWF has advised Greater Manchester Waste Disposal Authority (GMWDA) on the termination, by mutual consent, of its waste disposal and recycling contract with Viridor Laing (Greater Manchester) Limited.

The original 25-year contract was signed in 2009, with a value of approximately £3.8bn, and promised to deliver significant diversion from landfill and environmental benefits.

However, the project has recently experienced technical and operational challenges with a number of the facilities.

When it announced the termination of the contract in August, the GMWDA also said “constraints within the new EU Procurement Regulations (2014)…. meant that the savings identified cannot be taken forward through the existing contractual arrangements”.

DWF said in terminating the contract, the authority had achieved significant efficiency savings and operational improvements. It would also release significant private financing as well as preserving important elements of the scheme, such as the Thermal Power Station located at Ineos Chlor in Runcorn.

Michael Mousdale, commercial partner at DWF, led the team that advised on the matter, along with support from commercial partner James Lupton, litigation partners Chris Henshaw and Jon Hainey, banking partner Paul Brown and senior associate in the corporate team Vicky Ross. 

Mousdale said: "The Authority has taken a very brave decision to terminate a hugely complex PFI contract and manage to both avoid dispute and achieve substantial savings, and we are proud to have assisted the Authority in achieving this outcome.

“To walk away from such a complex PFI transaction, without loss and deliver such future benefits for people in Greater Manchester, is no mean feat, and we are really pleased to see the Authority move forward in its ambition to reduce waste, deliver sustainable energy facilities and influence change in the sector."