Community R4C submits £613 million illegal State Aid complaint
Environmental group asks Competitions Directorate to refer Urbaser Balfour Beatty ‘Javelin Park’ waste incinerator contract to UK courts
Community group calls on Gloucestershire County Council to support claim to win back £10’s millions for taxpayers
CR4C complaint timed to beat the Brexit transition deadline
Environmental campaign group Community R4C has submitted a formal complaint of illegal State Aid to the Competitions Directorate at the European Commission. They allege that a £613 million 2016 waste incineration contract between Gloucestershire County Council (GCC) and Urbaser Balfour Beatty (UBB) breached procurement law and that local taxpayers are owed as much as £50million by UBB, and annual cost reduction of at least £6million pa.
CR4C says the case has potentially wide reaching implications for fair public tendering in the UK and the importance of avoiding waste incineration to support urgent climate change action. It is believed to be one of the last major state aid cases before the Brexit transition period ends.
A High Court case (1) has already established that in 2016 a ‘cabal’ at GCC awarded a £613 million contract to UBB, without competitive tender, for a mass waste incinerator to be built at Javelin Park, near Gloucester. The court heard that this new contract was £163 million (36%) more expensive than a previous contract it replaced, awarded in 2013. Any increase in costs of more than 10% would normally require a new competitive tender. The court also heard that details of the contract were kept secret at great cost to the public purse until December 2018.
Community R4C has provided the Competition Directorate of the European Commission, ‘DG Comp’, with detailed evidence showing that the contract was awarded in breach of UK and European law because it was awarded to a single bidder without a competitive tender process which would have ensured value for money and best available technology for the authority. An award of a contract in such a way by a public authority would normally result in a finding of illegal State Aid by the UK Courts but it is currently still a matter for the European Commission to investigate and if appropriate order this action.
Tom Jarman, director of Community R4C said: “Gloucestershire County Council should now put the taxpayers of the County and the welfare of the planet first and support us in this action. This case should result in the recovery of £10’s millions of illegal State Aid from Urbaser Balfour Beatty for County taxpayers. It will also mean that forward costs of waste disposal would be substantially reduced, and present an opportunity to renegotiate the terms so as to ensure the end of harmful incineration of recyclable materials in Gloucestershire.”
The UK Government has confirmed that from January 2021 the Competitions and Markets Authority (CMA) will take over the responsibility for overseeing matters of State Aid and fair competition in public contracts. In March 2017 Community R4C submitted a complaint to the CMA based on the previous 2013 contract, this matter remains open on their books pending new information. The new 2016 contract and the recent offer of commercial waste services by UBB, effectively subsidised by this contract, provide grounds to reopen this matter.
Sue Oppenheimer, Chair of Community R4C, said: “This illegal project, using expensive old technology, should never have gone ahead, but we now have a real chance to stop it and replace it with something better that preserves resources and protects the environment.”
The incinerator at Javelin Park is one of the most expensive and worst performing waste treatment operations in the UK. The base cost per tonne of waste treated is £189, more than double the cost of other incinerators. It produces one tonne of the climate change gas, carbon dioxide, per tonne of waste burned with a capacity of 192,000 tonnes per year – or around 5.7 million tonnes in its operating lifetime. According to recently released figures from GCC and UBB, over 60% of the material burnt is recyclable. Supposedly an ‘energy from waste’ incinerator it is less efficient and produces more CO2 than even the worst coal fired power station in the UK. Over 65% of the energy produced comes from burning recyclable plastics.
R4C say their detailed application was prepared with the support of
Client Earth, an environmental law charity with competition law experts
based in Brussels, details of the application can be found here.