Progress on south east advanced waste processing procurement
In March 2020, MWRRG released an expression of interest for an alternative to landfill for councils in Melbourne’s south east.
After receiving over 30 expressions of interest a comprehensive evaluation process was undertaken. Three tenderers were shortlisted to continue with the procurement—Orbis Energy, Sacyr Environment Australia and Veolia Environmental Services Australia.
The shortlisted tenderers have taken part in the solution development stage. During this stage they submitted outline solutions and participated in competitive dialogue to ensure council objectives were met and reliable solutions put forward.
The final procurement stage—call for final tender—is about to commence. At the end of this stage, councils will have selected a preferred tenderer to take forward to contract award. The final tender is expected to be released in November this year with the preferred tenderer announced in the second half of 2022.
Sixteen councils in Melbourne’s south east have been taking part in the procurement. The south east has some of Melbourne’s fastest growing suburbs. The population is expected to grow substantially in coming years with household rubbish projected to increase by 40 per cent by 2046. The project will deliver a vital alternative to landfill and improve financial, environmental and social outcomes for residents.
A milestone for the procurement is the participating councils moving to set up a company to effectively manage decision making and contract management for the project.
This type of arrangement is called a special purpose vehicle (SPV) and is common in projects where there are many entities entering into the same contract.
The company will have its own assets and liabilities, as well as its own separate legal identity.
The benefits of setting up an SPV are:
- Structured decision making and administration between the councils.
- The contractor can work with one entity rather than managing contracts with all 16 councils.
- Simplified legal and financial management for the councils and contractor.
- Each council’s liability is limited to its share in the SPV, protecting their financial position and assets.
- The SPV can seek investment from other levels of government.
By forming a single entity, the councils also strengthen their influence on the economic, environmental and social outcomes of an advanced waste processing facility.
Last updated: 26/11/2021