London And Southern Counties Centre

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The Contractors Perspective

• Nigel Aitchison
• Municipal Contracts Manager
• B Director ELWA Ltd

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Shanks Experience

• 551m Group turnover
• Pan European Operations
• 4600 employees with over 1600 in UK
• Handle over 8m tonnes waste in UK p.a. through
  over 80 locations

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Shanks Experience

• Contracts in partnership with over 30 Councils
• Approx. 3.2m tonnes MSW handled p.a. via
• Landfill
• Transfer stations
• HWRCs
• MRFs
• Waste by rail
• Composting
• Kerbside collection
• Bring sites

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Shanks Experience

• PFI-Integrated Waste Management contracts
• Argyll Bute (commenced August 2001)
• Dumfries Galloway (preferred bidder)
• East London Waste Authority (commenced December
  2002)
• Delivering new technologies
• Planning achieved for MBT facilities
• ELWA (360,000 tpa)
• Dumfries Galloway (60,000 tpa)
• Green MK Centre (600,000 tpa)

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Selection of Contracts

• Existing Business
• Existing Assets
• Facilities
• Land
• Existing Relationships
• Do we know them?
• Competitive Advantage
• Solution fit?
• Is the output specification realistic?

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Solution Development
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Partnership Approach

• Can we work together?
• Is there mutual respect?
• Empathy between the teams?
• Two year courtship before taking the plunge
• .providing you have Parents consent!

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The Client

• Needs to be
• Organised with a flexible approach
• Knowledgeable with an open-mind
• Strong with a sense of fairness
• Determined with absolute commitment
• Pragmatic with clear realism
• Clarity of thinking - No U-turns

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Advisors

• The Clients
• Need to reflect the core principles of the Client
  and keep them on track
• The Contractors
• Commercial - Financial/Legal/Technical
• 3am Test
• PR
• Land

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Management

• Bid Team
• 4 Internal
• 30 External
• Senior Management Team
• 5 Internal
• Experience of the bid process
• Operational Team
• Transferring employees
• New recruits
• Sub-contractors

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Cost of Opportunity

• Pre OJEC - Create relationships
• Understand the Authoritys thinking
• Pre-qualification
• 1 of 20
• Are you credible?
• Invitation to submit outline proposal (ISOP)
• 1 of 17
• Is your technology credible?

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Cost of Opportunity

• Best and Final Offer (BAFO)
• 1 of 2
• Is the entire solution credible?
• Preferred Bidder to Financial Close
• Cost several million
• Is this sustainable?

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Cost of Opportunity

• 25million per annum business
• How many times can you afford to come second?

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Bid Review

• The solution must be continually reviewed
• It must always be appropriate
• If it isnt - change something
• The solution
• The requirements
• If you cant then pull out, dont waste each
  others time.

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Contract Interfaces
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Contract Tension

• Myriad of Variables
• Targets
• Timescales
• Perceptions - real/imagined
• Costs
• Competition
• Solution has to suit everyone
• Client Funders Contractor Public Planners
  Environment Agency Collection Authorities
  Politicians

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Contract Structure
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Risk Transfer

• Private sector is becoming more wary
• Party most able to manage the risk
• Easy to say, difficult to implement
• Fast moving environment means flexibility not
  lump it and dump it risk transfer
• Information
• Warranties

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Risk Transfer

• Planning/IPPC
• Delay has to be shared
• Some costs have to be shared
• Plan B
• Termination
• Poor performance
• Headroom

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Finance

• Project Finance v Balance Sheet
• Understand the effect of the contractual matrix
• Intensive due diligence is a positive
• Market needs to wet their appetite
• Who else has 8billion?
• Planning/IPPC v Targets

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Delivery of Integrated Services

• Main focus is to manage Municipal Waste!
• Landfill
• HWRCs
• MRFs
• Composting plants
• Transfer stations
• Bulking facilities
• Transportation
• Additional treatment facilities
• Then achieve the targets!

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Solution Attributes

• Proven
• Flexible
• Delivers
• Complementary
• Acceptable

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Summary

• Procurement process and contract requirements
  need to be clear and defined
• Level playing field is vital
• Make it attractive to Contractors and Funders
• Deal Breakers - Keep breaking them down
• Commitment, Stamina and Belief

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Make it work for everyone!