The announcement comes after a seven-year procurement process that would have seen two contracts awarded – one for waste services and one for fuel use.

A spokeswoman confirmed that the tender has cost the authority a total of £21m, including £18m on external advisors.

However, the decision not to award the contract will reportedly save £900m over 27 years.

Following a meeting of councillors late last week, the authority confirmed that it was set to continue using its current energy-from-waste (EfW) facility at Edmonton, which can remain operational until “at least 2025”.

Cllr Clyde Loakes said the decision was based on the “extreme pressure on local authority finances”. He explained: “By pursuing this alternative approach at a time when there is immense pressure on north London boroughs’ finances, the authority will avoid the need to substantially increase its costs in the short to medium term. This in turn will help limit the impact of waste management costs on council tax.”

The adoption of two key planning policies this summer – Enfield’s Edmonton EcoPark planning brief in May and the Mayor’s opportunity area planning framework for the Upper Lee Valley in July – also make the planning environment “much more favourably disposed” towards an energy recovery solution for residual (non-recyclable) waste than at the outset of the procurement process, Loakes added.

The shortlisted bidders were EEW-Wheelabrator Technologies (for the fuel use contract) and FCC/Skanska (for the waste services contract). The latter expressed its disappointment at this “late u-turn” given that the NWLA had “consistently led us to believe that this was an affordable and deliverable project”.

The NLWA decision was made by its members who consist of 14 councillors, two each from the seven north London boroughs of Barnet, Camden, Enfield, Hackney, Haringey, Islington and Waltham Forest.

NLWA will still have to plan for providing capacity for managing the 850,000 tonnes of waste collected by the seven constituent boroughs every year; it still has to meet its targets, jointly agreed with the seven north London boroughs and the NLWA, to increase recycling to 50% and reduce landfill to 35% of 1995 amounts by 2020. North London authorities also still have to work towards Mayoral targets for London to manage the equivalent of 100% of London’s waste within London by 2031.

NLWA will therefore begin to explore longer-term plans for an energy recovery solution for north London with the London Borough of Enfield and the Greater London Authority. This will be based on using residual waste as fuel to create electricity for the national grid and potentially heat for the Upper Lee Valley, close to the Edmonton EcoPark.

David Burrows

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