CEE Bankwatch Network

Fuelling The Fire

European Investment Bank financing for the incineration industry

Extract from the above document

Case Study: Cornwall County PPP- SITA

The 2006 Cornwall loan is for a Public-Private Partnership in which SITA has won a 30-year waste
management contract,46 which includes the construction of a a highly unpopular incineration plant. The location
for the plant has not yet been finalised due to fervent local opposition and therefore no environmental impact
assessment has so far been carried out. Yet the EIB, which claims to follow EU environmental legislation,
including requiring a full environmental impact assessment, signed a loan for EUR 120.2 million in October
2006, of which EUR 81.72 million is to be allocated for construction of the incinerator.47
It is questionable whether SITA’s record in delivering waste management services in the UK warrants Cornwall
County Council trusting it with its waste for the next 30 years. In 2001 the company’s contract was cancelled
in Brighton after it increased workloads to absurd levels to decrease costs and suspended workers who did not
manage to complete their rounds. The workers responded by going on strike and occupying the depot, and SITA
ended up having to pay GBP 3 million to be released from the contract since it could not deliver the services.48
The company has also been fined for several environmental offences during the last few years and has had two
of its incinerators temporarily closed as a result of technical problems and Enforcement Actions from the
Environment Agency.49 In 2002 a fatal incident at a SITA facility resulted in a GBP 80 000 fine for the
company for failure to implement adequate health and safety measures, plus GBP 20 505.41 costs.50
Ultimately it is the choice of Cornwall County Council and local people whether SITA is the best choice for the
County’s waste management, but it is another question whether the company should benefit from a public loan
that represents a seal of approval for SITA and the Cornwall waste contract. SITA/Suez and Veolia (formerly
Vivendi) are by far the largest waste management companies in Europe. In 2006 Suez had a net income of EUR
3.6 billion,51 and Suez Environnement, of which SITA forms a part, had a net income of EUR 562 million.52 It is
therefore far from clear why, if the company needed a loan, it had to come in the form of a low-interest public
loan and could not come from commercial sources.

46 EIB Press Release, 16.10.2006: http://www.eib.org/projects/press/2006/2006-105-ppp-cornwall.htm
47 EIB Press Release, 16.10.2006: http://www.eib.org/projects/press/2006/2006-105-ppp-cornwall.htm
48 Steve Davies: Sita in Brighton: humiliation by the sea, PSIRU, August 2001
49 Letsrecycle.com: Agency promises consultation before SITA can re-open tyre plant, 29.01.2001,
http://www.letsrecycle.com/do/ecco.py/view_item?listid=37&listcatid=306&listitemid=2304, BBC website: Firm fined over landfill smell, 19.03.2004,
http://news.bbc.co.uk/2/hi/uk_news/england/leicestershire/3551451.stm, SITA UK: Environmental and social responsibility report 2004, p.17, ‘This is
Hampshire’ website: Firm fined GBP10k as smell gets up residents’ noses, 05.05.2005, http://archive.thisishampshire.net/2005/5/5/6788.html, SITA
UK: Environmental and social responsibility report 2006, p.20; letsrecycle.com news: Boiler damage sees Kirklees incinerator out of action, 22.09.2006,
50 Health and Safety Executive website, case No. 2014466, heard on 13.12.04,
51 Suez website: http://www.suez.com/en/finance/key-figures/2006/revenues/revenues/
52 Suez Environnement website: http://www.suez-environnement.

The full document can be downloaded using the link below

Fuelling The Fire