Waste firm loses out in £3.8 billion challenge

A £3.8 billion waste-disposal project in Greater Manchester has been put back on track after a disappointed tenderer for the deal had its case thrown out by a High Court judge.

The waste-management giant, SITA UK Ltd, complained it had been unfairly treated before being pipped to the contract — the largest waste-disposal deal ever awarded in the UK — by bitter trade rivals, Viridor Laing (Greater Manchester) Ltd.

Viridor was awarded the public-private contract after its finances were rescued by Oldham Council’s former Treasurer, John Bland, as funds dried up during the credit crunch.

French company SITA went to the High Court and, had the company succeeded, it could have meant a massive compensation bill for the Greater Manchester Waste Disposal Authority (GMWDA).

However, SITA came away with nothing when top judge, Mr Justice Mann, ruled the company had brought its challenge to court too late and there was “no good reason” why its case should be allowed to proceed to a full hearing.

Describing the contract as a “massive new project” for Greater Manchester, the judge said a number of bidders for the deal were whittled down to SITA and Viridor Laing (VL) and, in January 2007, the GMWDA announced that VL was its “preferred bidder”.

Progress towards finalising the deal was interrupted by the credit crunch but, on April 8 last year, the GMWDA finally signed the contract with VL.

At the High Court, SITA argued the tendering process had been unfair and it had not been given an equal chance to win the contract in a fair bidding race.

The company sought damages from the GMWDA for its failure to award the contract to SITA, or at least to give it a fair chance of winning the deal, along with wasted tender costs.

Among other things, SITA claimed insufficient information had been provided to make it a level playing field, that VL had been allowed to “improve the terms of its offer” at a late stage in the tendering process and that late amendments had been made to the contract specifications. However, striking out SITA’s challenge, Mr Justice Mann said the company should have known that the contract may have been awarded in breach of tendering regulations by April last year and that was when a three-month time limit for taking legal action had kicked in.

By then, SITA had enough information to “start the clock running”, but it was not until August 27 last year - almost two months outside the deadline - that SITA launched its High Court challenge, he added.

SITA’s lawyers argued there were good reasons why the time limit should be extended, not least “the public interest in the integrity of public procurement procedures”.

The company also claimed that it would have launched its case much earlier had GMWDA “acted with appropriate transparency”.

However, Mr Justice Mann concluded: “SITA’s claim has been brought out of time and there is no good reason to exercise any discretion to extend it. The appropriate course is therefore to strike out these proceedings”.