Archived decisions

MAIN REPORT

1) Purpose of the Report:

1.1. This report demonstrates the case for funding an engineered solution to overcome the ground conditions found at the Bury Lane site, to allow for delivery of a new transfer station and to authorise consequential amendments to the existing lease to facilitate the future improvements of the adjoining Household Waste Recycling Centre (HWRC).

2) Contextual Information:

2.1. Hampshire County Council owns the freehold to the Bury Lane site, Marchwood and leases it to Veolia Environmental Services Hampshire Limited, which provides a transfer facility to service the long term waste disposal contract.

2.2. Veolia Environmental Services Hampshire Limited has a contractual obligation to provide an annual capacity of 30,000 tonnes of bulking and transfer for residual and recyclable waste collected in the South West Contract area.

2.3. In the planning consent (Application Number 85849) granted to Veolia Environmental Services Hampshire Limited for use of the former incinerator buildings as a transfer station, conditions were placed to stop operations and demolish these buildings by 31 December 2006. In the recent planning application (Application Number 07/89251) permission was given for the continued use of the former incinerator buildings to allow the development to take place. It stated that the use of the former incinerator building should be demolished within six months following the commencement date of the development.

2.4. In April 2007 Veolia Environmental Services Hampshire Limited secured a planning permission (Application Number 07/89251) to construct a new transfer station on the Bury Lane site. The consented scheme is a phased programme to construct a temporary transfer facility, demolish the old incinerator building within six months of commencement of works and construct a new transfer station. The temporary transfer facility will then be removed.

2.5. A ground condition survey carried out in late 2007, prior to the start of construction, identified significant land contamination as a result of landfill operations that took place on the site some 30 years ago.

2.6. As the ground conditions are not a result of any operations undertaken by Veolia Environmental Services Hampshire Limited and the site is owned by Hampshire County Council, the Council is liable for the costs of dealing with them.

2.7. An engineering solution has been developed by the contractor and has been agreed by the Environment Agency as a suitable and pragmatic resolution for the ground conditions at the site.

3) Key Issues:

3.1. Provision of a transfer station at Bury Lane, Marchwood.

3.2. The development potential of the Bury Lane site.

3.3. Ensuring that the proposed solution represents good value for money.

4) Provision of a Transfer Station:

4.1. The County Council is committed to eliminating landfill disposal of household waste and ensuring that waste disposal and collection operations in the county are as efficient and as effective as possible. The development of a modern transfer station at Bury Lane is crucial to allowing these service objectives to be met. This development will help Hampshire County Council to meet its Local Area Agreement target to reduce landfill by a further 3% by March 2011, potentially allowing the target to be met by March 2010, a year early.

4.2. Increasingly, it is residual waste from the HWRC network that is the main source of the County Council's landfill activities. As recycling of household waste becomes more successful, processing capability at the three Energy Recovery Facilities (ERFs) will be freed up for HWRC residual waste but it will only be possible for the ERFs to take this material if it has been pre-treated, ie shredded. This is common practice in the rest of Europe.

4.3. The proposed new transfer station at Marchwood will be able to accommodate a shredder within the building. It will also provide a strategic site that is capable of handling and storing HWRC waste generated in and around the New Forest. The new facility will reduce overall lorry movements and will also be of benefit to New Forest District Council's collection operations.

4.4. The transfer station will be able to handle greater quantities of material than at present and in turn this will help to reduce onward transport. Shredding amenity waste allows the material to be bulked and in vehicle movement terms will reduce the onwards transport by up to two-thirds. In addition, it will provide a centralised collection point for wood waste for recycling and provide a direct delivery point for kerbside collected green waste.

5) Development Potential:

5.1. By delivering the new transfer station on the County Council owned Bury Lane site, Hampshire County Council will own the facility at the end of the contract term. If Veolia Environmental Services Hampshire Limited seeks an alternative site now to develop a transfer station then the facility will remain in its ownership. In this circumstance, Hampshire County Council will have to procure this lost capacity after the end of the current contract term, April 2025, at the market price available, which is likely to be considerably higher than current prices.

5.2. Planning permission was obtained for this development in April 2007. The Bury Lane facility also has a full environmental permit in place for the transfer operation to take place. A new site would require both a new planning application to be submitted and a new permit to be secured.

5.3. To locate and secure an alternative site, and obtain the necessary planning permission and environmental permit, would take up to three years, assuming a site can be found.

5.4. The Bury Lane site is a County Council asset that, if not developed, will become redundant, with the cost of any alternative type of development prohibitive due to the cost of dealing with the ground conditions.

6) Value for Money Proposal:

6.1. In November 2007 a ground conditions survey, undertaken prior to construction, identified that the Bury Lane site is contaminated from landfill operations that took place some 30 years ago. A report was produced outlining the issues.

6.2. Based on the above survey, a solution was proposed that minimises the amount of material needed to be excavated by using piling for the foundations, rather than a concrete pad. The alternatives of full scale excavation, in-situ treatment and ex-situ treatment would be a great deal more expensive and, in most cases, would result in the transportation of large quantities of contaminated material to landfill sites.

6.3. The £1,600,000 represents an economical and sustainable solution to the contaminated land issue as the alternatives would cost significantly more.

6.4. The costs for dealing with the ground conditions found at the site are detailed in the table below:

Item	Cost
Increased costs attributable to disposal of contaminated soil and introducing sheet and CFA piling to minimise excavation of contaminated soil	£1,279,720
Gas venting system under the transfer station as a result of high CH4 and CO2	£250,000
Ground risk allowance	£75,600
Total Cost	£1,605,320

6.5. This proposal has been independently assessed in engineering and value for money terms by qualified experts:

(i) Denley King, an independent firm of quantity surveyors; and

(ii) Hampshire County Council Engineering Consultancy.

Both Denley King and Hampshire County Council's Engineering Consultancy regard the proposal as being the most pragmatic and cost-effective resolution.

7) Outline of Options:

7.1. Option 1: Contribute £1,600,000 to ensure delivery at Bury Lane site

a) Hampshire County Council contributes the £1,600,000 required for the engineered solution to overcome the ground conditions found at the Bury Lane site.

7.2. Option 2: Deliver contracted transfer capacity at an alternative site

a) Hampshire County Council does not contribute the £1,600,000 required and an alternative site is sought for the contracted transfer capacity.

7.3. Option 3: Develop a small transfer station at the Bury Lane site

a) A smaller transfer station is developed in the corner of the Bury Lane site to meet the contractual obligations which is likely to require a County Council contribution in the region of £600,000 towards ground remediation works.

7.4. Option 4: Develop an integrated facility on the Bury Lane site

a) Design and build an integrated transfer station and HWRC in one building complex and provide for the potential capture of commercial and industrial waste.

8) Option Analysis / Comparison:

8.1. Option 1 requires Hampshire County Council to contribute £1,600,000 that will cover the additional development costs attributed to the ground conditions on site. Given the ultimate aim to improve and upgrade the existing HWRC, and the fact that the new facility will allow HWRC waste to be diverted from landfill, funding for the project is earmarked from the HWRC capital provision.

8.2. Whilst Option 1 does represent a considerable capital contribution, it ensures that a new transfer station is developed providing the contractual requirement of waste transfer capacity in the Marchwood area. If approval is given, work would begin on site within one month, allowing the demolition of the former incinerator buildings to take place early in 2009.

8.3. Option 1 offers considerable benefits beyond the contractual requirements, both to Hampshire County Council as the waste disposal authority and to New Forest District Council as the waste collection authority. Benefits include providing a direct delivery point for both glass and kerbside collected green waste, reducing the distance Refuse Collection Vehicles have to travel through the National Park. It also allows for the collection of wood for recycling and provides space for a shredder to process the residual waste.

8.4. Option 1 also ensures that the Bury Lane site is used effectively in providing a key County Council service need. Not delivering the transfer station would result in the site remaining redundant. Any alternative scheme for this site would require remediation at a cost significantly greater than the £1,600,000 proposed for the transfer station.

8.5. In Option 2 Hampshire County Council does not contribute the £1,600,000 and Veolia Environmental Services Hampshire Limited seeks an alternative site to deliver a transfer station to provide the contract capacity.

8.6. Delivery of a transfer station on an alternative site would result in considerable time delay. To complete a site search, procure the land, submit and obtain both planning permission and an environmental permit will take at least three years.

8.7. At the end of the current contract term the facility, if developed on an alternate site, will be owned by Veolia Environmental Services Hampshire Limited. The 30,000 tonne per annum capacity will still be required by Hampshire County Council and will therefore have to be purchased at the market prices available, which will be far greater than current prices.

8.8. To enable an alternative site to be developed, the temporary transfer station would have to be built and retained at the Bury Lane site for a great deal longer than the current proposal requires. This would enable the former incinerator building to be demolished but would maintain the service whilst an alternative site was located and procured and the planning, permitting and construction took place. Due to the increase in time that the temporary facility would be required, it is likely that a more substantial structure would need to be constructed, resulting in unnecessary additional cost and time delays to the demolition project.

8.9. Option 2 results in the Bury Lane site being left redundant with only the HWRC located there and a loss of the synergies between the transfer station and HWRC operations. Due to the ground conditions found at the site, it is not suitable for alternative development and it would cost well in excess of the £1,600,000 required to allow the current proposal to go ahead to make development possible. This would result in the loss of a corporate asset, with the site remaining undeveloped and the ground conditions ultimately requiring remediation, if the asset is to be developed or used beneficially in the future.

8.10. Option 3 proposes delivery of a smaller transfer station in one corner of the Bury Lane site and would present considerable challenges in terms of construction due to the overhead power cables across the site. In addition, this option would require the continued use of the former incinerator buildings whilst the new transfer station was built.

8.11. Option 3 is a smaller footprint than Option 1 but as the poor ground conditions extend over the full extent of the site remediation work would be required for the small transfer station. The sum involved will be less than that required for Option 1 and has not been fully investigated but is likely to be in the region of £600,000.

8.12. A small transfer station would provide only the contractual requirements and not the additional operational benefits of Option 1. This means that there would not be space for the additional material capture or the shredder to process the residual HWRC waste.

8.13. It would also mean that the majority of the site remained undeveloped therefore not maximising the use of a corporate asset. For these reasons Option 3 has been discounted.

8.14. Option 4 considered the delivery of an integrated transfer station and HWRC in one building complex which, whilst arguably the ideal option, has been discounted due to the constraints of the site. Even the most practical design has consequential operational issues both for the HWRC and the transfer station. In addition, there would be increased cost due to the greater footprint of the facility and the need to remediate the ground conditions on the site.

8.15. Option 4 would also require the planning process to be restarted once a suitable design had been agreed. It is expected that the delay would be at least three years. There would also be increased cost due to the greater footprint of the facility and the need to remediate the ground conditions on the site. The issues, both operational and financial, offset the benefits of providing a combined facility.

9) Proposed amendments to the existing lease:

9.1. The terms of the existing lease between Hampshire County Council and Veolia Environmental Services Hampshire Limited, which was granted in 1997 for the better performance of the waste disposal contract, need to be varied in order to obtain the best configuration of the site in respect of the new transfer station and both the existing and proposed HWRC.

9.2. These changes will not have any financial implications for the County Council.

9.3. As part of the works it is proposed that the two former workers' houses at the front of the site are demolished and incorporated into the lease. These houses have remained vacant since 2004, when the Twynham Housing Association refused to renew its lease to use the properties for social housing due to lack of demand for these particular properties, given their location adjoining operational waste facilities and sewage treatment works and requirement for significant improvements. Their demolition will remove an ongoing liability and expense, give greater flexibility to the site and can be carried out as part of the overall redevelopment of the scheme.

10) Conclusions:

10.1. The Bury Lane site is owned by Hampshire County Council and has both planning permission and an environmental permit.

10.2. Veolia Environmental Services Hampshire Limited has a contractual requirement to provide transfer capacity in the Marchwood area.

10.3. The ground conditions found at the site are a result of landfill operations some 30 years ago and therefore Hampshire County Council is liable for any associated costs.

10.4. A scheme has been developed that can be delivered on the Bury Lane site with the construction programme commencing in September 2008.

10.5. Delivery of the transfer station will provide operational and transport benefits to both the main waste disposal contract and the HWRC contract as well as ensuring increased diversion from landfill. It will also help Hampshire County Council to meet its Local Area Agreement landfill target of 3% reduction, to 12%, by March 2011.

10.6. Provision of the facility will ensure the service is protected in the long term and avoids there being a service gap in the future.

10.7. Developing the Bury Lane site for a new state of the art transfer station will ensure best use of a corporate asset, rather than allowing it to remain undeveloped and providing no value to the County Council.

11) Summary Recommendation:

11.1. That Hampshire County Council funds, from the Environment capital programme, the £1,600,000 required to provide an engineered solution to the ground conditions found at the Bury Lane site, Marchwood to allow for the delivery of a new, state of the art transfer station.

11.2. That the Acting Director of Property, Business and Regulatory Services (Interim Head of Estates) be authorised to agree suitable revised terms and conditions to the existing lease between Hampshire County Council and Veolia Environmental Services Hampshire Limited, to include provision for the demolition of the redundant residential properties.

1757Rpt/SH

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