The final bill for cancelling the incinerator contract at Saddlebow has risen by £3.4 million to £33.7 million, Norfolk County Council has revealed.
County Hall formally terminated its contract with Cory Wheelabrator today and the final settlement costs in full will be known and paid in July once they have been evidenced and carefully audited.
The authority had set aside around £30 million to settle various elements of the contract – Cory Wheelabrator’s claimed costs, and its share in the public inquiry (up to £21.9 million for both) and hedging arrangements, which are subject to long term interest rate and overseas exchange rate fluctuations.
The costs of ending the ‘hedging’ arrangement element of the contract have previously been quoted in a range between £4.4 million and £12.7 million during the past year and were in the middle of that range (£8.4 million) at the time the decision to cancel the contract was taken.
The subsequent strength of the pound and reducing long term interest rates have combined to give a fixed final settlement figure today of £11.836 million.
The council has to pay this element within three working days and will now begin to scrutinise Cory Wheelabrator’s claimed costs.
Although the final figure cannot be identified until July, today’s news means that the overall sum required is now £33.7 million – an increase of £3.4 million on the original projection.
Full council is due to consider a recommendation from cabinet about the costs of terminating the contract on Tuesday, May 27. An update on the implications from this latest development will be available at that meeting.
George Nobbs, leader of Norfolk County Council, said: “This final figure for the ‘hedging’ element of the contract is more than we would have hoped it would be, but it has to be found, and will be found.
“None of this has been easy but the county council will cope and come through this.”
Steve Morphew, cabinet member for finance, added: “More bad financial news is the last thing we needed, but we are already working out how best to protect the people of Norfolk.”