Issue - meetings

STOCKTON-ON-TEES BOROUGH COUNCIL

CABINET DECISION

PROFORMA

Cabinet Meeting ........................................................................ 18 September 2025

Consideration was given to a report on the Tees Valley Waste Project - Energy Reduction Facility (ERF).

The five Tees Valley Authorities, Durham County Council and Newcastle City Council (together ”the Councils”) have joined together to create an opportunity for a contractor to design, build, operate and finance a new Energy Recovery Facility (ERF) to be located in the Tees Valley.

A Special Purpose Vehicle (SPV) would be created, which would be a limited company owned by all 7 councils, to enter into the contract with the preferred bidder, Viridor. The SPV would manage the contract throughout the design, build, operation and financing of the ERF.   

Cabinet had previously made the principal decisions to progress the joint waste facility and now a number of additional, ancillary legal agreements were required to progress the scheme to financial completion, to implement the project and ensure it’s ongoing good governance.

In July 2020 Cabinet approved the First Inter Authority Agreement between the five Tees Valley Authorities, Durham County Council and Newcastle City Council to agree the governance arrangements between them in order to pursue a joint waste facility and approved the commencement of the procurement process to procure a contractor to design, build, operate and finance the ERF. The Cabinet Report of 16 July 2020 contained more details. 

In March 2022 Cabinet approved the creation of the Special Purpose Vehicle (SPV) and delegated the authority for the entering into of the Shareholder’s Agreement and the Waste Supply and Support Agreement between the Council’s and the SPV, and delegated the authority for the SPV to award the contract, enter into the Project Agreement with the successful contractor and the lease for the land with STDC (Teesworks) on which the ERF would be built.

The March 2022 decision by Cabinet also delegated authority to officers to enter into two Guarantees, one to the SPV for the Project Agreement and the second to provide a guarantee that the SPV will meet its requirements under the lease. Cabinet further delegated authority to finalise and agree the Business Plan and sufficient resources to allow the SPV to reach financial close and to monitor and manage the contract on behalf of the Councils.   

The Cabinet Report of 17 March 2022 contained more details.   

The Council’s had selected a Preferred Bidder for the contract, Viridor, so the project was moving towards financial completion. 

The documents in paragraphs 1 to 3 had been progressing and were almost ready to complete, however DLA Piper LLP, on behalf of the Council’s, were producing the associated and ancillary suite of documents needed to ensure the governance of the contract and its future monitoring and management. 

The Council was required to have a Director on the Board of the SPV to represent the interests of the council and would require the authority to make Board decisions without needing to return to Cabinet or the approval of a delegated officer before each decision can be made.  This would effectively be the same authority that the Director  ...  view the full minutes text for item 45