Purpose

Proposed
decision
 
To
award a contract to
N+P via the CSKL Framework for the receipt and processing of dry
mixed recyclables for an initial period of 24 months, with up to a
further 36 months extension period
 
Reason for the
decision
A key function of the Waste
Disposal Authority operating under the Environmental Protection Act
1990, is to provide outlets for the processing of dry recyclables.
The current three year (plus one year extension) is due to expire
on 21 October 2024, with no further extension permitted
 
Background
Dry Mixed Recyclables (DMR) are
a mix of recyclable items which typically arise from local
authorities collecting co-mingled waste from households, such as
paper and card, cans, plastics and glass.
 
These materials are collected
together in the same kerbside container to be sorted at a material
recycling facility (MRF).
 
At the MRF there are various
mechanical and hand sorted processes to ensure the waste is
correctly segregated.
 
Once the waste streams are
separated, they are distributed to reprocessing plants where they
are fed back to manufacturers to be processed into new products as
demonstrated in Appendix 1.
 
The technology to sort the
materials is extremely sophisticated and can sort over 95% of the
materials that are processed at the facility for onwards
recycling.

 
The sorting and processing of
DMR falls under KCC’s statutory remit to make provision for
the receipt and treatment of this material under the Environmental
Protection Act 1990.
 
The current three year (plus
one year extension) is due to expire on 21 October 2024, with no
further extension permitted.
 
Options

 

o  
Option 1:Do nothing and
discontinue accepting the DMR waste from the collection
authorities; this is not an option as when the contract ceases on
the 21st October 2024, KCC will be in breach of its
statutory duty under the Environmental Protection Act
1990.
 

o  
Option 2:Continue to accept the
waste, but utilise alternative disposal
methods by using landfill or incineration; this is not an option as
there is a priority to move this material up the waste hierarchy to
meet landfill diversion targets, improve recycling rates, achieve
better value via a contractual arrangement with a contractor who
specialises in managing DMR waste, and avoid incineration as it is
costly in comparison.

 
Option 3 - To award a contract via the CSKL
Framework to the incumbent contractor N+P for seven
years via CSKL Framework -  for 7
years via the CSKL Framework –The
new legislation poses unquantified outcomes which will
impact the risk profile of the contract post 2026.
These risks will be costed into the pricing mechanism to minimise
risk for the contractor, making this a more expensive
option.
 
Option 4:– To award a contract via the CSKL Framework to
the incumbent contractor N+P for 24 months with a 36-month
extension via the CSKL Framework. via the CSKL Framework
– This shorter-term contract will
allow for the outcomes of the reforms to be assessed without the
risk being costed into the contract - Preferred
Option
. 

 

The commission of this contract will meet
KCC’s Strategy – Framing Kent’s Future 2022
– 2026 one of the four key
priorities:

Priority 3: Environmental step
change: Continue to
work with our commissioning partners to create the infrastructure
and jobs that enable us to reprocess waste materials and produce
energy within the county, in order to maintain a closed loop local
economy

 

The commission of this contract will
meet KCC’s Budget  Strategy
– Securing Kent’s Future by seeking best value via the commissioning and
procurement route consistent with  the
prioritisation of the Council’s best value
duty.

 

Financial Implications
o  
The 2024/25 revenue budget is £1,831,400 p/a
based on 69,882 budgeted tonnes.
 

o  
The annual cost of the commission is
£1,566,300 based on current market prices processing 75,000
tonnes.
 

o  
The total cost of the commission for the 24-month
initial period is projected to be £3,132,600 based on 75,000
tonnes pa,

 

o  
 Growth is based on an
increase of tonnage anticipated through population growth and
increased outputs due to increased performance.
 

o  
The markets for recyclables can fluctuate as they
are market driven, and as such predicting the extension value
accurately is challenging.
 

o  
KCC will be seeking a contractual arrangement which
offers the benefit of a rebate on the sale of the commodities.
These rebates are influenced by factors such as material quality,
volume, and market values.
 

o  
It should be noted that there would be significant
haulage costs should there be a requirement to travel out of the
County, as well as an environmental impact with regard to higher
emission outputs. It is also necessary for the fleet to be
available to service other contracts therefore, it is desirable to
have disposal outlets that are as local to Kent as
possible.
 

o  
 Haulage costs will be
evaluated so that the full cost of the contract is
considered.
 
 

Decision

 
As Cabinet Member for Environment, I agree
to:
 
APPROVE the procurement and
contract award of a N+P via the CSKL Framework for the receipt and
processing of dry mixed recyclables for an initial period of 24
months, with up to a further 36 months extension period.
 
DELEGATE authority to the
Director of Environment and Circular Economy, to take relevant
actions to facilitate the required procurement activity;
 
DELEGATE authority to the
Director of Highways and Transportation, in consultation with the
Cabinet Member for Environment to take relevant actions, including
but not limited to, awarding, finalising the terms of and entering
into the relevant contracts or other legal agreements, as
necessary, to implement the decision; and
 
DELEGATE authority to the
Director of Environment and Circular Economy in consultation with
the Cabinet Member for Environment  to
award extensions of the contract in accordance with the extension
clauses within the contract (up to 36 months).