The new standard form contract for waste projects: what does it mean for the waste sector?

United Kingdom

This week saw the publication of the latest residual waste treatment contract by the Department for Food and Rural Affairs (“DEFRA”) in conjunction with the Waste Infrastructure Delivery Programme (“WIDP”) for use in waste PFI procurements.

The new project agreement includes various new drafting dealing with key commercial issues for waste sector stakeholders and is essential reading for those involved in the negotiation, drafting and preparation of waste PFI bids and the associated contractual arrangements.

One of the key themes that features in the new draft is the public sector’s desire to reduce its potential cost exposure by asking bidders to cap breakage and development costs as well as clawback of potential costs by local authorities and limiting the compensation available for planning/permitting delays.

The industry will no doubt spend the next few months analysing in detail the changes that this latest contract has brought to the table. For new deals coming to market and for those deals which are yet to close dialogue, it is likely that the new contract will play a significant role in shaping the commercial deal and allocating risk and therefore those involved would be best advised to discuss the implications of the new contract with their legal advisers.

For the full article including a high level review of the key changes and their potential implications, please click here.