WIDP Final Business Case Template Version 1 REDACTED... · WIDP Final Business Case Template...

WIDP Final Business Case Template Version 1.5

7 .2. Site ident ification

7.2.1. Veolia have proposed to use the reference site for the Project which is in the City Council's ownership and was identified in the OBC. The site is within the Cross Green industrial area of the City, which is in the Burmantofts and Richmond Hill ward.

Figure 7.1: Site Location of the Residual Waste Facility in Leeds

7.2.2. Veolia are not using all of the former Wholesale Market Site and only intend to use the front part of the site adjacent to the East Leeds Link Road, which is further away from neighbouring residential areas.

7.3. Securing the sites

7.3.1. As set out in the OBC, a reference site in the freehold ownership of the City Council was put forward by the City Council for use by any Bidder involved in the procurement. Veolia has elected to use this site. As the site is already owned by the City Council no further work is required to secure this site.

7.3.2. The City Council will grant Veolia a lease for 25 years plus the construction period that will be signed by Veolia at Financial Close.

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7.4. Planning health framework

7.4 .1 . An updated Planning Health Check is attached at Appendix F. This has been amended to reflect the progress made by the City Council and Veolia since the submission of the PPB-FBC, the key issue raised by the planning health check is the timing of the Inspector's report on the NRWDPD.

7.4.2. Following full Council approval, the emerging Natural Resources and Waste Development Plan Document (NRWDPD) was subject to an examination in public in November/December 2011. Following which, the inspector raised a number of matters that did not relate to the waste site allocation but were about safeguarding and extracting sands and gravels in urban areas, the protection of wharves and rail sidings, protection of the Wharfe Valley, hazardous waste and the need for consultation on the proposed changes. The City Council's Executive Board considered the policy and supporting text changes to the NRWDPD to address the inspector's points on Wednesday 11th April 2012 and gave approval for a six week consultation exercise. Following further discussions with the planning inspector, this consultation is anticipated to start on Thursday 26th May 2012 and will comprise of, advertising in the local press, distribution to local libraries, writing to the 29 representatives, statutory consultees and be published on the City Council's web page. It is important to note that the consultation will only be about the proposed changes to the plan and not the entire plan (i.e. the strategic waste site allocations). The timing of the inspector's report will depend on the nature and quantity of the consultation responses.

7.4.3. It is anticipated that the City Council will receive the inspector's report six to twelve weeks after the completion of the public consultation (i.e. July to September 2012). The timing of this report depends upon the nature and quantity of the consultation responses.

7.4.4. Veolia submitted their planning application on 181h June 2012.

7.5. Design issues

7 .5.1. Throughout the whole of the bid process the City Council has utilised the Leeds Design Champion process to assist Bidders in developing their designs and enable the City Council to evaluate the designs in line with its Ten Urban Design Principles, WIDP's "Designing Modern Waste Facilities: a guide to creating modern waste facilities", and the design principles required by CABE. These principles have formed the basis for developing design excellence throughout the process and have established the City Council's criteria for good design to facil itate obtaining the necessary planning consents. The current Veolia design has been through regular workshops and prior to submission of the Final Tender the designs were assessed by a Design Review between the Bidder and the City Council which was chaired by the City Architect.

7.5.2. At the Preferred Bidder stage Veolia have continued to develop their design proposals in advance of their planning submission in June 2012. During the Preferred Bidder stage Veolia have met with the Design Champion team, planning officers and highways in order to finalise their designs in advance of Veolia submitting the planning application. Veolia and the City Council have discussed community consultation and engagement, community benefits and impacts on residential amenity.




7.5.3. The City Council's aspirations for sustainable buildings are reflected in the Residual Waste's Output Specification which sets out the need to achieve BREEAM and CEEQUAL excellent standards. The Facility will contribute positively to climate change and sustainability. Veolia have committed to achieving the excellent standard for BREEAM and CEEQUAL within their Contractor's Proposals.

7.5.4. Veolia will be contributing to sustainability as their design embodies the key principles of sustainability in the development of the living ('green') wall to the southern aspect of the RERF building (see Figure 7.2 below). The building structural frame will be constructed from timber beams and pillars. The use of timber as opposed to steel, plus the use of rain water harvesting within the technical process, particular attention to landscaping and wider landscape planting will also contribute to the City Council's commitment to sustainability.

Figure 7.2 Living Green Wall- South Elevation

7.5.5. The City Council and Veolia have pledged their commitment to halving waste to landfill and are named signatories on the Waste and Resources Action Programme (WRAP) wall of fame.

7.5.6. In line with WRAP guidance and best practice Veolia have contractually committed to provide a Site Waste Management Plan (SWMP) as part of their Contractor's Proposals. The SWMP will comply with the requirements of the Site Waste Management Plans Regulations 2008. The plan will identify how waste will be eliminated, reduced, reused and recycled.

7.5.7. The OBC was submitted before WRATE (Waste and Resources Assessment Tool for the Environment) was fully developed and widely used and therefore the reference case for WRATE was not modelled at the time. Since the submission of the OBC, the City Council has developed a baseline scenario with year 2016/17 as the base year. Veolia have completed a WRATE assessment based on version 2 which was issued by the Environment Agency on 14th April2010.

7.5.8. Veolia's WRATE model demonstrates substantial benefits over the baseline landfill scenario against all the sub-categories, with Veolia's proposed frontend recycling and energy generation making the most significant contributions.




7.5.9. The Global Warming Potential (GWP) of the Residual Waste Strategy that Veolia is proposing for the City Council (as determined by the WRATE model) demonstrates a saving of 62,600 C02 equivalents compared to the baseline landfill scenario.


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WIDP Final Bus iness Case Template Vers ion 1.5

8. Cost, Budgets and Finance

8.1. Int roduction

8.1.1. This section provides an overview of the following:

• The City Council procurement costs;

• The affordability update;

• The cost of the Preferred Bidder's solution;

• The funding solution;

• The affordability analysis and sensitivities; and

• Member approval of affordability.

8.2. Procurement Costs

8.2.1. Procurement costs for the Project are currently estimated to be £6.2m compared to the previous estimate of £5.4m provided at the time of submission of the PPB-FBC. A breakdown of the current expenditure compared to the PPB-FBC position is outlined in Table 8.1.

Table 8.1: City Council procurement costs to FBC submission

Estimated PPB-FBC Estimated Procurement Costs Expenditure Expenditure to FBC toFBC

Nominal Percentage Nominal Percentage £m % £m %

Authority in-house 3.747 69% 4.245 69%

costs Financial Advisors 0.512 9% 0.596 9% Legal Advisors 0.505 9% 0.593 9% Technical Advisors 0.669 12% 0.727 12% Insurance Advisors 0.015 0% 0.027 0%

Communications 0.000 0% 0.000 0% Advisors

Other Advisors 0.003 0% 0.003 0%

(NNDR)

Other procurement 0.000 0% 0.053 0%

costs

Total 5.451 100.0 6.244 100.0

8.2.2. Although current estimates are c. £0.8m higher than that previously estimated at the PPB-FBC stage the procurement budget will be reviewed as part of the City Council's continuing budget cycle and the project team will continue to seek to ensure that the resource inputs (both internal and external) are appropriate to the tasks required.




8.3. Affordability Update

8.3.1. As reported previously in the PPB-FBC there have been a number of changes to the affordability price ceiling of the Project since it was originally approved by Executive Board in February 201 0. These changes are summarised as follows:

• overall decrease in waste flows based on more recent information available;

• forecast operational period for the Facility now planned to run from 1st

March 2016 to 281h February 2041;

• Landfill tax increase from £72 per tonne to £80 per tonne in 2014/15 (as per 2010 budget announcement), with an annual inflation rate of 2.5% p.a. assumed for the contract life;

• Landfill gate fee per tonne updated in line with more recent instead actual costs; and

• Removal of LATS income from 2013/14 in line with Government announcement (previously included at £50 per tonne).

8.3.2. The OBC calculation of the Price Ceiling was based around the requirement that the PFI Project should cost no more to the City Council than a 'do nothing' scenario, in which planned service developments are fully rolled out and all remaining residual waste is sent to landfill. The FBC calculation of the Price Ceiling is also on this basis

8.3.3. The net effect of the changes highlighted in 8.3.1. above is that a revised 'do nothing' affordability price ceiling was subsequently approved by Executive Board in November 201 1.

8.3.4. A further report will be taken to Executive Board in June 2012 to give a final update of the affordability position prior to Financial Close, although no further changes to the affordability price ceiling are anticipated.

8.3.5. Table 8.2 below sets out the current cost of the 'do nothing' scenario compared to the previous Executive Board approval in February 2010.

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Table 8.2: Previous Executive Board Approval (February 201 0) and current cost of the "do nothing scenario" .

'Do Nothing' Current "do Movement Scenario nothing between

(previously scenario" Previous 'do approved at Feb (approved at Nov nothing' and 2010 Executive 2011 Executive current 'do

Board) Board) nothing' £000s £000s £000s

Price Ceiling (2010 to 2041 (Contract 633,101 755,453 122,352

Expiry Date))

Less: Cost of disposal between 2010 - (59,556) (94,552) (34,996) 2015

Cost of 'Do Nothing' to the City Council during the Contract Period 573,545 660,901 87,356 (2016 to 2041)

8.4. The Cost of Veolia's Solution

8.4.1. The City Council has undertaken an affordability assessment of the Project at each stage of the procurement process and has monitored the position continuously throughout the process. The City Council is therefore able to confirm that the Project remains within the affordability ceiling as currently seeped, in terms of the proposed expenditure for Veolia and the funding currently available to the City Council.

8.4.2. Veolia submitted a solution at Final Tender stage which will cost the City Council £465.3m over the life of the contract, which represents a saving of £195.6m when compared to the 'do nothing' price ceiling of £660.9m indicated in table 8.2 above.

During the Preferred Bidder period the financial model has been amended a number of times as follows:

• In October 2011 the model was revised by the Preferred Bidder to reflect a more equitable indexation calculation, producing a saving of £2m to the City Council.




8.4.3. The total cost of the Project to the City Council is now £457m in terms of overall Unitary Charge, a saving of £203.9m when compared to the 'do nothing' price ceiling of £660.9m.

8.4.4. A summary of the FBC Financial Model compared to the PPB-FBC model (Veolia illustrated in table 8.3 below. A copy of the

8.4.5. The Unitary Charge (UC) shown in table 8.3 above includes the cost of waste disposal from the planned full service commencement date of March 2016. Prior to this there will be a further cost incurred by the City Council during the commissioning period of September 2015 through to March 2016. This cost will be based on the following assumptions:

• Commissioning cost incurred by Veolia is - · the difference between the payme reduCe the UC during the Contract Period;

• A ramp up of Processable Contract Waste which it will accept during this period is shown in table 8.4 below:




8.4.5 A summary of average gate fees and banding information contained in the FBC financial model is shown in table 8.5 below:




Table 8.5: Gate Fees and Banding information

Base Case

(£) Total Unitary

457.111 m Charge Average gate - Year- 2015/16 (see cell X125, Unit fee (nominal) Prices sheet of FBC Financial Model Average gate - Year- 2015/16 (see cell X124, Unit fee (real) Prices sheet of FBC Financial Model Average gate - Year - 2019/20 (see cell AB125, Unit fee (nominal) Prices sheet of FBC Financial Model Tonnage Band (£ per tonne, real) Band 1 (0 to -120,000 to Excludes pass-through costs tonnes) Band 2 (120,000 to 194,000 - Excludes pass-through costs tonnes) Band 3 (n/a) £n/a Base date (for

Apri l 2010 real figures)

Figure taken from cell N135, "Unit

On average. of Prices" sheet of the FBC Financial

Indexation Model. UC subject to lx This is an average - the actual % will fluctuate with the changes in band 2 tonnages

8.4.6. It should be noted that the costs above are based upon a Euro exchange rate of 1.143 Foreign Exchange rates remain a City Council risk up to Financial Close and are discussed further in paragraph 8.6.9.

8.5. Funding Solution

8 .5.1. Veolia's proposal is based on a corporately funded solution which is supported by Veolia Environmental Services UK Pic (VES UK Pic) through a Parent Company Guarantee (PCG) provided to the City Council. VES UK Pic will provide the corporate debt for the Project which includes a PCG for the obligations of Veolia ES (Leeds) Ltd ('VESL').

8 .5.2. The corporate loan facility of~as been provided by VES UK Pic which includes a buffer of approxima e y as the required funding is - · The loan is provided at a fixed rate of which is based on the followrng:

• a term loan rate at. ; and

• a funding margin charged at • .

8 .5.3. VESL Ltd will issue £1,000 in equity and VES Pic will hold 100% of the equity of VESL. The return that is required by Veolia is based on the nominal project post tax internal rate of return (IRR) of - This return calculation is post



WIDP Final Bus iness Case Template Vers ion 1.5

SPV tax but pre shareholder tax. The City Council notes that tax and accounting assumptions are at the Veolia's risk.

8.5.4. The sources and quantum of funding for Veolia are summarised in table 8.6 below:

Table 8.6: Sources and quantum of funding

Type of funding solution

Corporate

8.6. Affordability Analysis

Loan Type

Equity

8.6.1 Projected Authority Budgets

Source provider

Veolia ES Aurora Ltd

Amount Amount per Committed financial model £000s £0005

The PFI affordability position over the life of the Project is attached in full at appendix J2 and summarised below in table 8.7 compared to the previous PPB-FBC position:

Table 8.7: Affordability posit ion from PPB-FBC to FBC with Veolia

Authority Cash Flows PPB-FBC FBC Nominal Percentage Nominal Percentage £m % £m %

Authority budgets - exist ing 334.931 70.8 326.739 70.9 (LCC Do Nothing) less non

Contract Waste LATS Income - - -Recyclate Income - - -PFI Credit payments 134.111 29.2 134.111 29.1 Sinking fund interest - -Total Authority Income 469.042 100.0 460.850 100.0 Unitary Charge (including 452.854 94.7 457.113 99.2 NNDR)

Landfill Tax 12.451 4.5 - -LATs costs - - - -Contract Monitoring 3.737 0.8 3.737 0.8

Total Authority Costs 469.042 100.0 460.850 100.0

The Executive Board affordability approval and associated report from November 2011 attached at Appendix N demonstrates that Members understood and approved the affordability implications as the Project has progressed. As mentioned in 8.3.5 above a further report is being taken to Executive Board in June 2012 to update members on the affordability position prior to Financial Close.




The overall affordability position is that the Project will cost the City Council £457m in terms of overall Unitary Charge, a saving of £203.9m when compared to the 'do nothing' price ceiling of £660.9m.

8.6.2 Waste Infrastructure Credits

The calculations for Waste Infrastructure Credits for the reference ERF project were derived according to Defra guidance which assumed funding of 50% of the relevant senior debt service of the Project. This is provided on the basis that the City Council achieves a recycling rate of 50% by 2020, the City Council expects this to be achieved prior to Planned Service Commencement Date in 2015/16.

The Waste Infrastructure Credits were confirmed in the City Council's OBC approval letter of 7th April 2008 which assumes a Revenue Support Grant (RSG) rate of 5.9% and scaling factor of 1.0.

The Project's OBC approved £68.6m of Waste Infrastructure credits over 24 years which has since been revised to 25.6 years as the Contract was extended to 25 years and the City Council was informed that it is eligible for Waste Infrastructure credits during the Hot Commissioning period.

A copy of the Department for Communities and Local Government (DCLG) RSG Annuity Model is attached at Appendix J4 and shows an annual PFI RSG payment of £5.276m based on total PFI Credits of £68.6m.

8.6.3 City Council LATS Strategy

There is no change to the City Council assumptions in relation to the trading of Landfill Allowances to the end of 2012/13 as outlined in the PPB-FBC document submission.

Following the announcement by the Government that LA TS was to be abolished from 2013/14 the affordability calculation was subsequently revised to nullify the LATS impact and this is reflected in table 8.7 above.

8.6.4 Recyclate Income

There is no change to the assumption made at PPB-FBC that Veolia will retain the risk in relation to Recyclate Income.

8.6.5 Sinking Fund Interest

There is no change to the assumption made at PPB-FBC that the City Council will earn no interest on the account as the Sinking Fund is in deficit throughout its life as the RSG payments are much lower than the equivalent Unitary Charge in all years of the contract.

8.6.6 Landfill Tax

As detailed in paragraph 8.4.2 above the FBC Financial Model has been updated to reflect the removal of landfill tax price risk from the City Council as this is now being taken by Veolia.




8.6.7 Contract Monitoring Costs

The City Council has included the contract monitoring costs of the scheme within its affordability position. The estimate provided at OBC was £3.2m, this was increased to £3.7m as a result of changes to the Planned Services Commencement Date. The following assumptions have been made in relation to income to the budget for these costs:

• Based on just over 26.2 years of contract monitoring from 1st April 2015 - 30th April 2041 to ensure adequate monitoring is in place prior to Hot Commissioning and at the end of the contract for the hand back of the asset;

• Staff costs are indexed at 2.5% per annum; and

• The estimate is over and above the existing client contract monitoring budget in place to monitor the current waste contracts.

A sensitivity analysis of these costs has been completed which considers the impact of a 5% increase above those provided for in the City Council affordability. The results of the analysis demonstrate that the Project will still remain within the affordability position in this FBC if these costs were to increase.

8.6.8 Sensitivity analysis

Although the current price of Veolia's proposal is lower than the "do nothing scenario" cost approved by Executive Board in November 2011 , there are a number of assumptions that could change the price of the Project both prior to close and post Financial Close and these are set out below:

Risks prior to Financial Close;

• Changes to the foreign exchange rate issued to Bidders at Final Tender stage. Approximately 60% of the capital costs of the Project will need to be paid in Euros as this equipment will be purchased in Europe. Fluctuations in the Euro exchange rate could therefore have a significant impact on this cost of capital. A strategy to mitigate this risk was approved by Project Board in March 2012 and work is on-going to develop the required documentation; and

• A delay to the Financial Close date beyond the Fixed Price Bid Validity period (30th September 2012), however the Preferred Bidder has stated that a delay to close should not have a detrimental impact on price provided that the construction start date is not adversely affected.

Risks post Financial Close;

• The City Council's wasteflow projections were established in 2011 based upon the best data available and the Project has been designed around these wasteflow assumptions but does




have significant flexibility to accommodate changes. In particular it should be noted that the unitary charge costs are based upon the City Council's wasteflow forecast. The unitary charge payable could increase in the event that the City Council's residual wasteflow increases, or could decrease (subject to the minimum payment) in the event that the City Council's residual wasteflow decreases;

• Changes to the NNDR (business rates) estimate provided to Veolia and incorporated in their financial assumptions. The City Council will pay the actual costs which may be different to the estimates;

• Actual inflation rates higher than the average annual rate of 2.5% assumed in the financial model. Latest figures published by the Office of National Statistics (ONS) in December 2011 suggest RPIX rates are currently 4.95%. If the higher RPIX rate of 4.95% was the average over the life of the contract, it would increase the unitary charge over the life of the Project by c.£8m;

• A delay to the planning approval date (beyond the 12 months included within the current programme) will increase the cost of the Project. It is estimated that a 6 month delay will result in an additional cost to the City Council of approximately -- per annum for the operational life of the contract; ancr--

• Foreign Exchange risks - some risks will remain in reference to Foreign Exchange post close, although there are not considered to be material (arising from timing uncertainties).

The most significant of these risks to the Project are considered to be changes to the foreign exchange rate, delays to the planning approval date or a combination of the above scenarios. The potential costs of these risks have been modelled by Veolia (see sheet-- in the - attached at - ) and are summarised in tab~w:

Table 8.8: Sensitivity Analysis on the Cost of the Project.

As a result of the Veolia solution rema1mng significantly lower than the City Council Affordability Ceiling, the City Council is confident that should any of the risks above materialise, then the Affordability Ceiling approved by Executive Board will not be exceeded and there is sufficient headroom to absorb these costs.




8.6.9 Foreign Exchange Strategy

In order to mitigate the potential exposure of the Project to price changes from Foreign Exchange rates the City Council has developed a Foreign Exchange Strategy in conjunction with JC Rathbones and PwC, its financial advisors on the Project.

A number of potential strategies were considered before it was decided to recommend that the Project progresses on the basis of a forward contract to be executed by Veolia at Financial Close (with the use of a time option forward if it is available and appropriate).

The strategy was presented to the City Council Residual Waste Project Board at its meeting on the 8 th March 2012 and subsequently approved. A copy of the Board report, which explains in more detail the options considered and chosen, is attached at Appendi • .

The project team will continue to develop and refine the Foreign Exchange Strategy in the period before Financial Close.

8. 6.1 0 Cost and Impact of Carbon

There is no change to the City Council assumptions in relation to the cost and impact of carbon as outlined in the PPB-FBC document submission.

8. 7. Member Approval of Affordability

8.7.1. The City Council confirms that it is committed to and understands the requirements to meet the costs of the Project over its lifetime.

8.7.2. This is evidenced by the Project Board Report in the Executive Board report in Append ix N approved on 2nd November 201 1. The reports set out the total cost of the reference project in comparison to the do nothing option and highlights a range of risks (covered in more detail as part of 8.6.8 above) that could lead to an increase in the cost of the Project

8.7.3. A further report was taken to Executive Board in June 2012 to update Members on the affordability position of the Project prior to close. This report and associated minutes are attached at appendix N.

8.7.4. As part of the PPB-FBC approval process the Section 151 Officer considered the budgetary and affordability implications of Veolia's solution and provided a letter of support. These impl ications have been considered further as part of the FBC (see 8.6.1 above) and as a result it is considered that the original letter of support is still valid. The original letter of support is attached at appendi.

8.8. Key components of Members' Report

8.8.1. The Executive Board Paper (which was approved at the Executive Board Meeting in November 2011 ) demonstrates confirmation that the total cost of the Project (incorporating Veolia's solution) in comparison to 'do nothing' has been considered and approved by the City Council.




8.8.2. The Executive Board Paper sets out the total cost of the reference project in comparison to the do nothing option and notes that although the price has been fixed by Veolia, that the risks outlined in section 8.6.8 of this FBC still remain with the City Council and that therefore the price put forward in the Tender submission could be exceeded.

8.8.3. The Executive Board Paper (which is due to be approved at the Executive Board Meeting in June 2012) demonstrates confirmation that the financial implications for the City Council have been considered and approved, and that authority has been granted for the execution of the relevant contract documents for the Project.




9. Stakeholder Communications

9.1. Introduction

9.1.1. Throughout the City Council's procurement for the Facility, community and stakeholder engagement has been an integral element of the Project. An extensive programme of public and stakeholder communication and engagement activities has been delivered since the submission of the OBC, through various means, including press releases, briefing sessions, drop-in sessions, distribution of information packs and the web. The engagement activities have particularly focused on the communities living closest to the proposed sites, but measures have been taken to ensure engagement with residents city wide.

9.2. Strategy

9.2.1. The City Council is committed to delivering a programme of communication and engagement activities for the Project, to ensure effective, timely and consistent engagement with the public and other key stakeholders. Prior to the announcement of Preferred Bidder, the communications were delivered by the City Council's Waste Strategy team, supported by members of the project team. A summary of the communication and engagement activities undertaken by the City Council is provided in the following sections.

9.2.2. Since the announcement of Preferred Bidder, Veolia has led the communications strategy, with support from the City Council's project team. To ensure a seamless transition between the phases, a Communications Working Group was set up comprising members of the City Council's project team and Veolia. This group discussed and agreed Veolia's consultation strategy to support their planning application, and items covered included knowledge sharing, exhibition venues, protocols to agree future consultation materials and the roles of City Council officers at consultation events. A summary of the consultation activities undertaken by Veolia is provided in the following sections.

9.2.3. In recognition of Elected Members' role as key stakeholders, the project team have regularly attended Leader Management Team, Cabinet, Area Committees and local community forum meetings to provide updates and information about the Project, including planned communication activities. During the Preferred Bidder phase, Veolia have been included within this Member engagement, and have presented at the City Council's Scrutiny Board, local community forums, Plans Panel and one of the strategic partnership boards (Climate Change Partnership) in order to introduce themselves and their proposals. Veolia have also undertaken briefings with local ward members and three local Leeds MPs. The City Council's Executive Board has been consulted at key stages of the Project including the decision to place the OJEU notice, approval of evaluation methodology, communication and community engagement strategy, the outcome of each bid phase and the appointment of Preferred Bidder.

9.2.4. Independently of the Project, the emerging Natural Resources and Waste Development Plan Document (NRWDPD) proposes the allocation of three strategic waste management sites, including the site to be used by Veolia. This plan has been subject to public and stakeholder consultation on several




occasions (including with the Environment Agency, Natural England, English Heritage, Highways Authority) and was approved by the City Council's Executive Board prior to submission to the Planning Inspector. The project team has also met with the Environment Agency on several occasions to provide updates on the Veolia's proposals.

9.2.5. The management of all requests for disclosure of information under the Freedom of Information Act (FoiA) or Environmental Information Regulations (EIR) are being dealt with in accordance with the City Council's standard procedure. The requests, of which so far during the Preferred Bidder stage there have been two, are logged centrally, then responses are prepared by the department and sent to the Department's Fol practitioner who ensure the relevant chief officer has reviewed the responses prior to their release. The project team has liaised with the City Council's Legal Services team to ensure a robust and consistent approach to responses to information requests.

9.3. Transfer of Undertaking - Protection of Employment (TUPE) and Code of practice on workforce matters

9.3.1. No TUPE transfer of staff from the City Council to the Contractor is anticipated. Any potential TUPE transfer of staff to the City Council at Handback is covered by standard TUPE provisions in Veolia's Handback plan.

9.4. Other relevant authorities

9.4.1. There are no other relevant authorities and therefore this section is not applicable to the City Council PFI procurement.

9.5. Public engagement

9.5.1. City Council led activities:

• The following provides a summary of the key public engagement activities undertaken by the City Council since the submission of the OBC;

• In May 2008, the City Council undertook a survey to inform the evaluation criteria for the Project. This survey comprised seeking views from both residents city wide and local to the sites, and from over 300 internal and external interest groups (e.g. Elected Members, Town and Parish Councils, and the Environment Agency);

• In December 2009, an information pack about the Project was produced and distributed to approximately 12,000 households within a one mile radius of the two remaining sites. Following this, in January to March 2010, ten dedicated briefing sessions took place in venues convenient for the local communities and one within the city centre. Project officers also attended scheduled community forum meetings at this time, and have continued to attend these forums regularly throughout the process to provide updates on the Project;

• In September 2010, a further leaflet providing an update on the Project and additional information to address concerns raised at earlier events was developed and sent to all Elected Members, local




MPs, local businesses and all households within a one mile radius of the sites (approximately 12,000); and

• Following this distribution, three drop-in workshop events were held in the East Leeds area in October 2010. An additional workshop was subsequently held in Rothwell in January 2010. These drop-in sessions provided the opportunity for Members and residents to view display boards about key aspects of the Project and information on concerns previously raised (design, traffic management, health impacts, site selection, etc). City Council officers were available should a resident have any specific concerns or questions. These workshops were attended by approximately 110 people.

9.5.2. Veolia led activities:

9.5.3. Veolia has carried out pre-planning consultation and engagement with residents, for three months between January and March 2012. This engagement included:

• The mailing of two publications to approximately 11 ,500 addresses in the Richmond Hill , Osmondthorpe and Halton Moor areas in January and March including invitations to the drop-in exhibitions;

• The placement of 16 newspaper advertisements to publicise the drop-in exhibitions, in Yorkshire Evening Post, Leeds Weekly News, Leeds Metro, Rothwell Advertiser, and Rothwell & District Record;

• Sending of advertisements on two separate occasions, for the January and March exhibitions, to libraries, One Stop Shops and community centres city wide (99 establishments);

• The delivery of seven day long drop-in exhibitions, delivered in sessions which ran into the evenings and weekend, at a number of locations around the area. A total of 175 visitors attended these exhibitions;

• The receipt and analysis of 65 feedback forms from visitors to the exhibitions;

• Engagement with all 99 Leeds Councillors and 8 Leeds MPs, including briefing sessions to 5 Councillors and 3 MPs, Councillor preview sessions as part of the March drop-in exhibitions and a Councillor visit to the Sheffield ERF (2 attended although offered more widely);

• Engagement with 85 local community groups and stakeholders, 175 local businesses and 40 Technical Consultees via a minimum of 2 mailings and email;

• A total of responses to 44 helpline telephone calls and 38 emails;

• A total of 8 presentations to local community forums and other stakeholder groups; and




• A total of 5 community liaison group meetings and a visit to the Sheffield ERF for the community liaison group, which has attracted 25 members.

9.6. Community sector/Non-Government Organisations (NGOs)

9.6.1. Throughout the Project, the City Council has maintained regular meetings with Friends of the Earth, keeping them updated on the progress of not only the PFI Contract but the whole Waste Strategy. Veolia have written to NGOs as part of their consultations, and members of Friends of the Earth and No 21ncineration groups have attended the community liaison group meetings.

9.6.2. Following requests, City Council officers, and subsequently Veolia representatives, have attended meetings held by additional local residents associations and interest groups (e.g. Cross Green Residents Association and Hunslet Tenants and Residents Association) to provide information and updates on the Project.

9.6.3. Alongside the community consultation, the City Council distributed the information leaflet to 500 local businesses in autumn 2010. A drop-in event for businesses was also held in October 2010. Any queries raised by local businesses have also been responded to by the project team. Veolia have continued to engage with local businesses through their mail-outs, exhibitions and community liaison group.

9.6.4. There is no involvement of any community sector/NGOs in the Project as the Project is for the treatment of residual waste. The City Council has existing partnerships with not-for-profit organisations in relation to reuse and recycling, which will continue to be in place and will not be affected by the Project. Veolia have plans to work with local not-for-profit organisations, proposing to select two local charities and/or community organisations annually to support through their Environment Fund, through staff charitable donations, and staff volunteering.



1 0. Timetable


1 0.1.1 . The revised project timetable comparing the OBC position with the FBC position is contained within the table below.

Index 1

2

3

4

5 6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

AsPerOBC

Stage Date Months Submission of Eol Mar -15

2007 Approval of Eol May -13

2007 OBC Approved by City Council Oct -8

2007

Submission of OBC Oct -8 2007

Mayoral Approval (if relevant) n/a n/a Defra Approval of OBC Jan -5

2008 PRG Approval of OBC Jan -5

2008 OJEU Published Jun 0

2008 Descriptive Document Issued Jun +[ ]

2008 ISOS Issued Aug +2

2008

ISOS Returned Oct +4 2008

ISDS Issued Dec +6 2008

ISDS Returned Mar +9 2009

ISRS Issued (Optional) May + 11 2009

ISRS Returned (Optional) July +13 2009

Call For Final Tenders Sep +15 2009

Preferred Bidder Identified Oct +16 2009

Submission of PPB-FBC Dec +18 2009

Approval of PPB-FBC Feb +20 2010

Preferred Bidder Confirmed n/a +[ ]

Submission of final FBC n/a +[ ]



As PerFBC

Date Months Mar -15 2007

May -13 2007

14 -7 Nov 2007

19 -7 Nov 2007 n/a n/a Feb -4 2008

25 Mar -3 2008 30 Jul + 1 2008

+[ ]

14 +5 Nov 2008

21 Jan +7 2009

17 + 12 June 2009

21 Oct + 16 2009

4 June + 24 2010

30 + 27 Sept 2010

13 + 37 July 2011 Sep +39 2011 Sep +39 2011 Oct +40

2011 Nov + 41 2011 June +[ ]


*Dates shaded in yellow are anticipated key milestone dates.

10.1.2.A delay occurred in issuing the ISRS documentation (rows 14 & 15 above) as it became clear following evaluation of the ISDS Bids that the City Council's documentation was insufficiently precise to ensure that all commercial issues could be adequately controlled and that the Contract adequately described all of the requirements. The City Council therefore undertook further development of its Contract documentation during this period.

1 0.1.3. At OBC stage the City Council did not anticipate that there would be a requirement for an additional evaluation at ISRS stage, which has contributed to the extension to the programme (row 14 & 15 above).

1 0.1.4. The ISRS stage was extended to enable both remaining Bidders to develop competitive tenders, ensuring that a competitive process was maintained throughout, which was felt to be necessary to ensure that both Bidders were at an equal stage when Call for Final Tenders occurred (row 16 above).

10.1.5. The planning application was submitted on 181h June2012 and Veolia

anticipate the planning application being approved in March 2013.



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