After working for five years to win an $80 million waste treatment project in Perth, engineering company WorleyParsons Ltd has pulled the plug on its consortium partners, including Macquarie Bank.
After working for five years to win an $80 million waste treatment project in Perth, engineering company WorleyParsons Ltd has pulled the plug on its consortium partners, including Macquarie Bank.
Its decision to pull out of the BioVision consortium has caused further delays in finalising the project, which involves construction of a composting facility that will divert municipal waste from landfill.
WorleyParsons’ two consortium partners, Macquarie Bank and Canadian company Conporec, are believed to be seeking a new engineering partner so they can proceed with the waste treatment facility.
The project has been sponsored by Mindarie Regional Council, which handles waste management for the City of Perth and six other municipalities.
Mindarie selected the BioVision consortium last August, five years after commencing an intensive evaluation and tender process.
Conporec announced in November the consortium had signed a contract for the financing, construction and operation of the 100,000 tonnes per year composting facility, which was expected to generate about $10 million in annual revenue.
“The contract will come into effect upon financial close, which is scheduled to occur in December 2006,” Conporec said.
However, the wheels fell off the consortium when WorleyParsons decided it would rather focus on its core market – large and complex engineering projects for oil and gas and mining companies.
WorleyParsons’ managing director for Australia and New Zealand, Peter Meurs, told WA Business News the company had made a strategic decision to not pursue smaller projects like the Mindarie facility.
Mindarie agreed this month to defer the contract deadline until the end of June, but did not explain why this was necessary.
Mindarie believes it will not have to reopen the tender process.
If it did, it would present another opportunity for the losing bidder, a consortium comprising Total Energy Services Tasmania and SITA Environmental Solutions.
SITA, one of Australia’s largest waste management company, lifted its exposure to the sector last year when it bought a 50 per cent shareholding in Queensland company CEC Resource Recovery Pty Ltd, which operates a municipal waste treatment plant in Cairns.
The CEC plant employs composting technology developed by Canadian company Bedminster.
The Southern Metropolitan Regional Council, which built Perth’s first large-scale municipal waste treatment facility in Canning Vale three years ago, also uses Bedminster technology.
Other regional councils are exploring the possibility of waste processing but in the meantime continue to expand their landfills.
