Thursday, February 02, 2012
What happens if the Gilberdyke Tip operators walk away from the site?
In view of the Environment Agency issuing the enforcement notice against the Gilberdyke Tip owners City Plant Ltd. it raises the question as to what happens if the Directors decide in view of the action, to fold the company or walk away from the site?
This has concerned me for a while and is something I have raised on a number of occasions after the scenario was first mentioned by residents. After some investigation, answers from City Plant Ltd. and input from the Environment Agency (EA), it would seem that if the City Plant Ltd. Directors were to walk away from the site or folded the company for whatever reason, there is financial provision of up to £1.2 million for the tip to be capped off, restored and maintained as required - but is it adequate, and if not is there an asset value to the tip?
The basis of the provision is found in the Environmental Permitting (England and Wales) Regulations 2007 [SI 2007 3538] with reference to Waste Management licensing and pollution prevention and control regimes from 6th April 2008.
The owner or applicant for an Environmental Permit (EP) must be able to provide adequate financial provision to meet the obligations of the permit. Some of these sites can include landfill with aftercare costs for a period of up to sixty years after closure.
Part of the solution can include a security bond, which provides an indemnity for the amount specified by the EA as 'financial provision'. The bond is not required if the client has sufficient 'upfront' funds. In the case of the Gilberdyke Landfill site approximately £650,000 is invested in a FillSecure bond, which has the potential to generate income to cover costs of approximately £1.2million. The FillSecure solution has been approved by the Environment Agency for ‘general application, and consists of a funding arrangement suitable for the cost effective management of financial provisions as required under EP permits to satisfy the long-term aftercare requirement, as well as operational and restoration costs’.
It is my understanding that unless this ‘financial provision’ had been put in place December’s transfer of the Environmental Permit from the previous owner to City Plant Ltd would not have taken place or been ratified by the Environment Agency. It has been confirmed that the Agency took the opportunity to revise the ‘financial provision’ to regularise the costs and to ensure that due to the changes in the site infrastructure and environmental requirements/guidance, any after care costs would be covered.
I am confident that in the event something does happen with City Plant Ltd, monies are available to the Environment Agency from this fund for the tip to be capped off, restored and maintained BUT is this amount of ‘financial provision’ based on the conditions of the EA permit, and since the height of the tip is way over, and in breach of the approved height limits as detailed in the permit, therefore is this provision now adequate?
The tip itself may not have a physical asset value but the methane gas caught within and being constantly produced for a significant number of years to come certainly does have a value, especially if it can be used to power electric generators to produce clean renewable energy like we see at other landfill sites. It is therefore reassuring that not only is there a significant bond in place, there appears to be a very saleable asset which should ensure the tips long term future care and maintenance.