Sunday, 15 May 2011

Waste Strategy Costs Mount

Will the new Waste Strategy mean no more Brent scenes like this?
The cost of the implementation of the Council's Waste Strategy which involves fortnightly collections of residual waste and expanded dry recycling, has increased following urgent decisions taken by the Chief Executive of the Council under his delegated powers. The costs relate to the deployment of new vehicles and the purchase of more than 100,000 new collection containers.

The original plan to purchase 12 new waste vehicles at a cost of £1.7m, including interest charges, spread over 7 years (approximately £243,000 annually), has been ditched. Instead Veolia will hire vehicles for the remaining two and a half  years of their contract, at a cost of £1.1m, to be paid for by an increase in their contract price. The annual cost will be £440,000, £197,000 more than buying and £493,000 more over the remaining two and a half years. The original plan left the Council with the vehicles when the contract expired but the new plan leaves them owning none.

Officers argue that they  will save £600,000 in total costs in the long term (£1.7m versus £1.1m) and that hiring will 'relieve the Council of the burden of ownership (my emphasis) at the end of the current contract in 2014, which will improve our ability to go to the market for the replacement contract and seek competitive prices.'  My reading of this is that this leaves Veolia holding all the cards at the end of the contract and puts them in a winning position for the new contract - after all Brent will have a waste strategy with no vehicles!

The other additional cost is in waste containers with wheeled bins replacing the current green boxes (I am still waiting to hear if they are going to be recycled). This is a table of the new purchases:

The caddies and kerbside containers will cost £96,300 and Officers deemed this a low value contract not requiring Executive approval.  In the case of the bins Officers considered that it was prudent to conclude arrangements on bins and vehicles at the same time as the two were interdependent.They needed to make a purchase quickly because of  the rise in prices for the oil-based polymer from which thy are made. The total cost of the bins will be £1,693,250 which is £58,000 over budget. The urgency again meant that the Chief Executive made the decision. Officers argue that the deal is still affordable and within budget as they will use the existing container revenue budget of £97,000.

Read the document for yourself HERE

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