Veolia boss 'confident' of striking a deal with Sheffield Council over waste contract

Bin collections.
Bin collections.

A private company which handles Sheffield's waste services is still hopeful of striking a deal with the council - despite concerns that the firm is no longer delivering value for money.

Council officers asked cabinet members to consider ending the current waste management deal with Veolia 19 years early due to a lack of savings being made.

But councillors decided in January to keep the contract in place for the time being.

They did however vote to change the way in which the service is delivered and agreed that they should put the contract back on the market at a later date.

Council leaders and Veolia management are currently locked in talks to see what the future holds for the partnership.

Veolia chief executive Antoine Frerot said this week he was 'confident' of reaching a compromise deal with the council.

He said: "Negotiations are continuing with Sheffield, I am rather confident we can find an agreement in the next few months."

Mr Frerot added that a compromise could potentially be found over a lower price, possibly extending the contract so that payments could be spread out over a longer time.

Handling waste from other areas to increase revenues was also cited as another option.

He went on to warn that any cancellation of the contract would force the company to seek compensation over depreciation costs of its investment and lost earnings.

The current contract was signed in 2001, is worth £1.5 billion and was not set to expire until 2036.

But council officers became so frustrated with the lack of savings being made in the service that they asked councillors to take a multi-million pound hit and start afresh

Cabinet members decided to split the various elements of the waste service into smaller parts and then put each area out to tender.

A council spokesperson said today that no decision was taken to end the Veolia contract and it remains in place for the time being until a decision is taken to end it.

This means during the procurement process to find a company to deliver waste services, Veolia could legally reapply to deliver services.

The council has not revealed a timetable yet as to when the procurement process will begin.

Councillor Bryan Lodge, cabinet member for the environment at Sheffield Council, said recently: “The cabinet decision approved the reprocurement of waste and recycling collection services, operation and maintenance of the Energy Recovery Facility at Bernard Road, operation and maintenance of the District Energy Network and the procurement of a number of disposal contracts for specific material streams.

“It is anticipated that the reprocurement of the collections service will commence shortly, although the exact date has still to be determined. Procurement exercises for other services are expected to begin later this year.

“Discussions have taken place with Veolia following the cabinet decision, but the content of these is commercially confidential. Any discussions with other potential service providers will only be undertaken as part of the procurement process.”

In a phone call, he said it was "not be appropriate" to comment further while talks are ongoing.

In a joint statement Veolia and the council said discussions were "ongoing" but "nothing has been finalised and a further update will be provided in due course.”