The Contractor is responsible for securing the required environmental permit. As with the Planning process the Authority has a right to receive quarterly reports from the Contractor setting out what it has done. The Authority has a right to respond and request that more needs to be done but can only do so within the time limit specified. This is five Business Days in the WIDP Contract (Schedule 27) so the Contract Manager must ensure the Authority has systems in place to allow it to evaluate, and respond quickly to, the quarterly notice.
There may also be ways in which the Authority can assist the Contractor. For example the Authority can:
• attend any public meetings or drop-in sessions the EA organises as part of the consultation process;
• notify WIDP if any issues could constructively be clarified with the Environment Agency at the appropriate level; and
• provide historic data that may be relevant to the Contractor.
The risk allocation provisions in the WIDP Contract (set out in Schedule 27) largely follow the approach taken for planning (see Section 2.2 above). The key difference is that the compensation due to the Contractor due to delay or termination is more restricted in the permit risk regime. The Contract Manager should be familiar with the differences.
Under the WIDP Contract, the Authority may choose to share the risk involved with securing a permit with the Contractor. However, a Contractor must have used All Reasonable Endeavours for it to benefit from this risk share (e.g. the Authority may be liable for compensation to the Contractor following termination for failure to obtain a permit in certain circumstances). On some waste projects where the Contractor is not reliant on project finance, the entire risk relating to environmental permits has been taken by the Contractor. Therefore the Contract Manager should ensure (s)he is familiar with the exact provisions in the Authority's Contract and should not assume the approach mirrors that for planning or that set out in the WIDP Contract.
There is the potential for the permit application process to lead to a need to redesign aspects of the plant to comply with the Environment Agency's requirement (see below). In this case the Contractor is obliged to seek the Authority's written consent in advance. Such changes are likely to have cost consequences. The Contract Manger should ensure that these are dealt with in accordance with the Contract.
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Example Under the PFI contract between Cornwall County Council and Sita the Contractor's application for an Environmental Permit resulted in detailed consideration of whether emissions from the proposed EfW facility would impact on the nearby Special Area of Conservation. The issue was eventually resolved when the Contractor, in consultation with the Authority, accepted that a range of mitigation measures including enhanced emissions control and a taller stack would be necessary to ensure emissions at the SAC would not exceed the level acceptable to the Environment Agency. |