2.40 Oversight of operational experience of local authorities/projects will become increasingly important. To date only four PFI residual waste treatment facilities are fully operational. Although some experienced delays, these have not resulted in additional costs to the local authorities involved. In general these projects are now delivering the expected performance in terms of diversion from landfill (Figure 19).
2.41 To date the Department has focused its scrutiny efforts on procurement, and less on contract management. There will, however, be increasing numbers of projects coming into operation in the next few years. No matter how good the contract is, effective contract management is essential for successful projects. WIDP has arranged to meet with projects in the planning or construction phase to determine the nature and level of support they would like.
2.42 Some local authorities are concerned about the availability of the skills and resources required to undertake aspects of contract management. Project teams will need more support and guidance on contract management issues.
2.43 There is also scope for the Department to improve the information by which it monitors projects after contract letting. In contrast to the procurement phase, when monthly reports are received, management information is collected six-monthly after contract award. More frequent information on construction performance would be appropriate as this stage is critical to delivering projects on time. Performance information from the projects when they are in operation will also be important to the Department's assessments of whether the EU landfill targets will be achieved.
19 | Summary of performance on the four projects where residual waste facilities are complete | ||||
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Project | Isle of Wight | Kirklees Council | East London Waste Authority | Leicester City Council | |
Type of facility built | No new build - existing energy from waste facility refurbished | Energy from waste | MBT (2 plants) | MBT | |
Expected date of full operation |
| April 2002 | October 2006 (first plant) and March 2007 (second plant) | June 2005 | |
Actual date of full operation |
| April 2002 | April 2007 (first plant) and September 2007 (second plant) | November 2007 | |
Reason for difference |
| n/a | Although the granting of planning permission was promptly achieved there were delays in getting the related legal agreements between local authorities and developers | Towards the end of the commissioning period, a contractor undertaking welding work on the Cascade Mill ignited the rubber cushioning membrane causing extensive damage to the Mill. When the necessary repairs were completed, an Independent Certifier identified a number of issues over the specification which required the contractor to make modifications to the plant. | |
Impact |
| n/a | Equivalent impact on contractual performance | The fire was treated as a relief event which protected the contractor from contract penalties, although the contractor did have to meet the cost of additional landfill tax. Throughput of waste at the facility was reduced by 50 per cent for 18 months while repairs were conducted. | |
Performance | The project is performing as expected | The project is performing as expected | The project is performing as expected | The facility is now almost fully operational to the expected contract output standards except for some post contract modification work to the anaerobic digester facility. However issues around products from the waste treatment process which is currently being sent to landfill could impact on the overall landfill diversion performance of the project in future years if a solution is not found (see case example 2). | |
Source: National Audit Office review of projects | |||||