Monday, September 26, 2016

News: Shanks experiences challenges at Rotherham waste plant

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Shanks Group plc, one of Europe's leading waste management businesses, has been forced to admit that profitability at the award-winning waste treatment plant in Rotherham has not been reached as quickly as expected.

The 220,000 sq ft development at Brookfield's Park in Manvers creates material suitable for recovery and recycling and includes Mechanical Biological Treatment (MBT) and Anaerobic Digestion (AD) facilities.

Barnsley, Doncaster and Rotherham Councils secured £77m through the Private Finance Initiative (PFI) for the scheme and Shanks Group plc joined in partnership with SSE (Scottish and Southern Energy plc) to progress the plans. Known as 3SE, the operators signed a 25 year contract worth in excess of £750m with the councils for the treatment of black bag waste.

The facility processes around 250,000 tonnes of waste a year from 340,000 homes across Barnsley, Doncaster and Rotherham. Since it opened in July 2015, more than 96% of waste has been successfully diverted from landfill.

In a trading update to the stock exchange, Shanks plc, which has a 75% interest in the project, said: "We are continuing to experience challenges in ramping up the new Barnsley, Doncaster and Rotherham (BDR) and Wakefield facilities to targeted profitability as quickly as we had expected, the latter largely a result of the contractor insolvency last year."

The facilities are expected to contribute to profit and cash performance over the next 25 years but Shanks said its Municipal Division had continued to experience market and operational challenges in the UK, with a resultant impact on profitability.

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Reports to the BDR waste partnership board show that, during the first year of full service, there has been some processing issues in the refinement section of the plant. "As a result some waste was diverted from the facility to allow for improvements to be made to the refinement section of the MBT to improve the quantity and quality of the recyclates collected." Shanks has an improvement program in place to ensure the refinement section of the MBT is achieving its optimum performance. The areas for improvement have been agreed and the work is expected to be completed by the end of 2016.

Problems have also been encountered in the part of the facility that deals with solid recovered fuel (SRF) which has had some downtime due to boiler and crane issues. SRF is taken from Manvers to the new multi-fuel generator at Ferrybridge, operated by SSE.

Also, in August 2016, a fire in the quarantine bay of the reception area was dealt with by staff on site in addition to the fire service assistance. Minimal damage was caused to site.

In addition, the market for recycling plastics from an MBT is poor at the moment. The price of oil is low, this means the virgin plastic material is cheap and consequently lowers the value of the recyclable material. This has led to the contractor paying to get plastics reprocessed.

The report also shows that the total Unitary Charge paid to 3SE from the July 2015 to the end of March 2016 was £15.9m In the same period, the BDR waste partnership received Waste Infrastructure Credits from the Government for the value of £4.5m.

Despite the teething problems, the BDR and 3SE partnership won the Best Energy from Waste Initiative category at the MRW National Recycling Awards in July.

Shanks plc website
BDR Waste website

Images: Shanks


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