Interserve, the services, maintenance and building group, in a joint venture with United Utilities, has been named preferred bidder for a waste-treatment contract in Derbyshire. The Public-Private Partnership (PPP) contract will be worth in the region of £500 million.

The provisions of the EU Landfill Directive include the requirement that the UK must halve, in comparison to 1995 levels, the amount of biodegradable municipal waste sent to landfill by 2013. Derbyshire County Council and Derby City Council are committed to meeting their targets and are jointly letting the contract, which covers the design, build and operation of a new facility to treat municipal solid waste. Subject to financial close and planning approval, work on constructing the facility is expected to begin in the spring of 2010, with the contract running for 27 years from that point.

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Subject to planning permission being granted, Interserve will construct the new, state-of-art treatment facility at Sinfin Lane in Derby. The plant, to be operated by United Utilities, will employ a clean-burn process known as gasification. Not only can the resulting residue be used as an aggregate in concrete products, the process will also produce electricity that can be sold to the National Grid. The plant will be capable of handling 190,000 tonnes of Derbyshire's and Derby city's waste annually – most of which would otherwise go to landfill. Interserve will take a 50% share of the project's equity and subordinated debt.

(CD/JM)