Manchester waste PFI deal finalised by end of February

Speaking to NCE's sister magazine MRW yesterday, the source said the banks involved in the 25 year contract were close to agreeing the structure of the finance.

A joint venture between infrastructure investor John Laing and waste contractor Viridor was originally named as preferred bidder by client Greater Manchester Waste Disposal Authority (GMWDA) in January 2007.

Financial close was originally scheduled for summer 2007, then pushed back until the end of 2007.

But the complexity of the deal and increasingly difficult lending terms due to the credit crisis mean that every deadline to date has been missed, including GMWDA's prediction that deal would be wrapped up by Christmas 2008.

"The deal itself hasn't changed," said the source.

"The financing costs have gone up considerably and it has simply been a case of getting the cash together."

Costain is Viridor Laing's preferred bidder for the £330M contract to build five mechanical biological treatment plants, two incinerators, four composting plants, five transfer loading stations and 17 recycling centres.

The contractor signed a £7M advance works order in January so it could begin detailed design work. But it cannot start construction of facilities until the deal between GMWDA and Viridor Laing is signed.

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