Wakefield’s waste management PFI scheme is on the brink of collapse after the sponsor announced its intention to withdraw from the scheme.
NCE sister title Infrastructure Journal today revealed that Babcock International has announced it is exploring “exit options” with the awarding authority and interested parties.
The future of the £700M project has been in doubt since at least November 2010, when Babcock issued its half-yearly report indicating that it did not consider its waste operation to be a “strategic growth opportunity”.
Wakefield Metropolitan Borough Council, the awarding authority, said it was still in talks with Babcock and declined to comment further. Babcock also declined to comment except to confirm its original statement.
The DBFO project has been dogged by delays since Babcock (formerly VT Group) was announced as preferred bidder in November 2007. Several dates for financial close were missed in 2009 and 2010.
Earlier this month, sources close to the dea complained at a lack of joined-up thinking over the project’s procurement following the VT/Babcock merger, and were sceptical about the project’s chances of reaching close in the near future.
The lending group has also faced difficulties with SMBC leaving the project to be replaced by Bank of Ireland.
PwC is acting as financial adviser to the authority, Walker Morris is providing legal counsel, Entec is technical adviser, while Aon is acting as insurance adviser.
DLA Piper is legal counsel to the sponsor with PKF providing financial advice.