Essex opens £13m warchest for legal fight against failed waste contractors
The county council is remaining tight-lipped over the current legal position
Essex County Council has opened a £13million warchest of taxpayers money to fund its continuing legal battle over a failed waste scheme which left it being owed around £36m.
The county council is remaining tight-lipped over the current legal position which still has not been fully resolved months after the authority won its right to terminate the contract with UBB Waste Essex – formed by Urbaser and Balfour Beatty – for its waste processing scheme at the MBT facility in Basildon.
Administrators appointed at UBB Waste Essex revealed last October a list of four creditors – Urbaser owed £25.2 million, Balfour Beatty Group owed £10.8m, UBB Essex construction owed £2.2m and Essex County Council owed £26.3m.
It adds that Essex is owed £36m, which includes £10m compensation awarded when the High Court ruled that UBB was at fault for failing to design and construct a facility sufficiently good enough to operate properly.
However, it states that “the statement of affairs does not take into account the significant ongoing safety, security and compliance costs at the facility, for which UBB remains ultimately responsible”.
It adds that “any payment to unsecured creditors by way of the prescribed part, will be made by a subsequently appointed liquidator”.
It was also revealed that the contractors were being paid £86,500 a month to secure the site and maintain environmental controls.
UBB Essex had an “estimated total deficiency” of £85.8m.
It remains unclear how much Essex County Council or other creditors will be able to recover.
ECC cabinet permitted the county council to draw down up to £13m from the Waste Reserve on an incremental basis “to resource the resolution of a dispute”.
Cabinet member for waste, Cllr Malcolm Buckley, said: “Because we’re in a position of legal privilege there is very little I can say about the litigation. All i can say is that we are keen to see it progressed as soon as we can but the important thing is to get the right result for people of Essex and that that really is the key to it.”
A spokesman for Essex County Council said: “Essex County Council is not paying any monies to UBB to maintain the facility in Basildon. The facility is owned and maintained by UBB.
“In June 2020, UBB requested that ECC ceased deliveries of waste to the facility.
“Prior to this date, ECC made payments to UBB for waste delivered to the facility for processing. As there has been no waste delivered to the facility since June 2020, there have been no payments from ECC to UBB since then.”
The 417,000 tonne capacity plant built under a 25 year £800m contract signed in 2012 never properly worked – the county council argued that the plant was not built correctly.
In 2017 the county council started court proceedings which were ruled in its favour last year. UBB Essex went into administration shortly after.
Subsequently, all deliveries of waste into the facility that had been accepting around 270,000 tonnes of black bag waste a year to be processed, avoiding the need for landfill disposal, were suspended.
Since then, instead of first being sent to the Tovi facility for processing, black bag waste has been sent to landfill via waste transfer stations.