Bywaters escapes financial penalty after pulling out of north London recycling contract the day it was due to start
- Credit: David Fitzgibbon
A waste management company has pulled out, at the last minute, of a £17.8million contract to process recycling – despite signing up to the deal five months ago.
Bywaters was due to begin servicing a contract for the North London Waste Authority (NLWA) on Monday, sorting a fifth of the recycing from recycling from Hackney, Islington, Camden, Haringey, Barnet, Waltham Forest and Enfield.
The company tried to change the terms of its contract earlier this month, but will not face any financial penalty for dropping out.
Biffa Waste Services, which will sort the other four-fifths of the mixed dry recycling, embarked on the six-year contract on Monday at its plant in Edmonton.
The NLWA rejected Bywaters' amendments, but has promised recycling will not be burnt in its incinerator in the meantime, and that Bywaters will continue to process it at its Bromley-by-Bow materials recovery facility plant.
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Neither the NLWA nor Bywaters' managing director, John Glover, would say exactly what changes he wanted to see, citing commercial confidentiality - although Mr Glover said "flexibility was key".
He told the Gazette: "The best way of saying it is that we found the terms the NLWA required were unfortunately inflexible and don't allow us to go forward together.
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"We live in a world today where people look down on the zero hours contracts, and I don't want to say too much on this because we are trying to come to terms with the NLWA, but they were offering us the equivalent. We employ more than 400 staff. We need guaranteed work and we can't reserve space for material that's not coming in.
"If I was to say 'I want you to come out with me. I wont tell you when, but I'll tell you when I decide to come around', you wouldn't hold me in high esteem. It's that sort of problem. They aren't guaranteeing anything, and bearing in mind we have been doing business with Hackney for 10 years, that's rather a disappointing approach."
He added: "The contract was 48 pages long - 48 pages. And really such a contract like that is full of stuff that's irrelevant and a good contract would have four pages of the nitty-gritty and not demolish so many trees."
The new contract was supposed to introduce improved reporting and traceability of end destinations for recycling, to provide reassurance about what happens to recyclable material.
It allowed a provision for the NLWA to take a greater share of income from the profits of processed material, after tender bidders took a "cautious view" over what income could be generated.
Other new rules state that loads with up to 25 per cent contamination should be sorted and then processed at the materials recovery facilities, whereas previously if more than 15pc of the loads were contaminated the whole lot could be burnt.
Another change was that all staff would be required to be paid the London Living Wage (LLW). Last month Mr Glover told the Gazette: "We all operate under a financial cosh and much additional funding is required within London facilities, public and private, if everyone was to be paid the LLW."
A spokesperson for the NLWA said: "NLWA followed the proper process in tendering for these contracts to ensure we could meet the recycling capacity needed in north London. This included provision for negotiation before the contract was awarded and the opportunity for bidders to clarify any issues on which they were uncertain before submitting final bids. We are therefore extremely disappointed that Bywaters have indicated at this late stage that they are unable to honour the contract.
"However, we have made and will continue to make all necessary arrangements to ensure there will be no interruption to recycling services in north London. In the New Year the authority will consider whether it needs to explore other options to meets its recycling capacity requirements for the longer term."