In 2010 a formal notice of dispute was issued by the Procuring Authority, five years after financial close, regarding the calculation of excess revenue. The parties went through multiple adjudication proceedings, and the dispute was almost escalated to the High Court before a resolution was reached for the benefit of each party.

One of the factors leading to the dispute appears to be a reduction in amount of waste collected from 2009 onwards. The reasons behind this reduction are hard to pinpoint to one single cause, as an interplay of various factors probably contributed to this, such as demographics (e.g. changes in local population, the nature of residential developments), a reduction in consumption (and hence waste generated) due to the Global Financial Crisis, or changes in local authorities' operational policies (e.g. collection versus disposal). The reduction in tonnage changed the financial outcomes for the Project Company, and in this context financial flows and payments came under close scrutiny. This led to the Project Company interpreting the PPP contract in a different way to the Procuring Authority, which took the view that the Project Company was withholding payments related to excess revenue.

While there were provisions in the PPP contract for dealing with disagreements of this kind, eventually the parties reached a stalemate. From the point of view of the Project Company, this was broken by bringing in people who had strong relationship building skills who then focussed on improving the relationship with the Procuring Authority. As the staff were new, they had a more independent view as to what had occurred previously and were able to take a more pragmatic approach.

It is important to note that the lack of agreement on the precise workings of the PPP contract, as well as ambiguity in the PPP contract itself, led to this dispute reaching a stalemate. A difference in views between two parties to a contract is common, especially given the length and complexity of this kind of project, and the challenge is therefore to find a way to overcome these disagreements without risking ending up in dispute. In this case a better understanding of what the PPP contract required would have helped improve outcomes for all parties.

As part of the solution adopted, the parties have negotiated some changes to the PPP contract conditions and payment mechanism to provide additional clarity and remove any residual ambiguity.