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Failed Manchester waste bidder launches claim for 'unlimited' damages

Recycling and waste management company Sita UK has launched legal action against the Greater Manchester Waste Disposal Authority after it missed out on securing the contract for the £3.8 billion Greater Manchester Waste PFI, Europe’s largest waste contract.

The GMWDA today confirmed a claim for “unlimited” sums had been lodged with the High Court in London.

According to the writ, Sita is demanding damages for the “failure to award the contract to the claimant”, alleging it acted in breach of the EU obligations of equal treatment and transparency.

A legal spokesperson from Sita UK said:  “According to information released by the GMWDA when the PFI contract reached financial close on 8 April 2009, the cost of the PFI contract let to Viridor/Laing was 15 per cent more expensive than SITA UK’s bid in 2007 and 25 per cent more expensive than their original submission.

“It has also transpired that since the appointment of preferred bidder GMWDA agreed significant changes to the project.  In our view SITA UK, as reserve bidder, should have been invited to submit a revised bid, which could have been fully assessed against the VL bid. 

“We have sought reassurance from GMWDA that our bid was treated fairly, however the responses to requests for information have simply reinforced our concerns. Regrettably SITA UK has been left with no option other than to issue court proceedings.”

GMWDA treasurer John Bland told Construction News: “The authority is disappointed and surprised that Sita UK has commenced legal proceedings, but is confident the contract has been awarded in accordance with EU laws.”

A joint venture of waste contractor Viridor and infrastructure investor John Laing was named preferred bidder in February 2007 and financial close was reached in April. The pair awarded the construction contract to Costain, which began work soon after.

The consortium has now achieved planning approval for all 23 sites across Manchester, on which 36 separate plants will be built.

The PFI was the first contract to make use of the Treasury’s £2 billion Infrastructure Finance Unit.