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Viridor agrees exit terms from PFI contract

24 August 2017 07:48

As previously reported, the Greater Manchester Waste Disposal Authority (GMWDA) took the decision in April 2017 to seek an exit from their 25-year Recycling & Waste Management Private Finance Initiative (PFI) contract with Viridor Laing (Greater Manchester).

Viridor and its partners have been working with GMWDA to agree principles of an exit. These principles were agreed and a heads of terms between GMWDA and Viridor Laing has been signed.

Residual waste will continue to be treated at the Runcorn I Energy Recovery Facility which Viridor will continue to operate for the remainder of the original 25-year contract with no significant operational changes.

GMWDA indicated that the recycling and reprocessing operations will be subject to a re-procurement process, commencing later in 2017.

In the meantime, expectations are that Viridor will continue to provide these services for a period of not less than 18 months. Viridor will also be eligible to bid for the new contract.

It is envisaged (subject to a number of conditions and approvals) that a final agreement will be signed by the end of September 2017, dealing with the termination of the PFI Contract. Ownership of Viridor Laing will at that time pass to GMWDA.

For the joint venture entities, Viridor Laing and INEOS Runcorn (TPS), Pennon anticipates at this stage a net one-off non-material impact to the income statement in 2017/18.

This takes into account a reduction in the book value investment in joint ventures and an expected one-off gain on joint venture profit after tax.

A fuller update will be provided in due course when all agreements are finalised.

Story provided by StockMarketWire.com

Related Company: PNN

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