County and city councils in £93.5m dispute over energy-from-waste facility

Derbyshire County Council has demanded a £93.5m payment from Derby City Council in a dispute over the costs of the mothballed Sinfin energy-from-waste plant.

Opposition parties have warned that paying such a sum could force Derby into bankruptcy.

The dispute has gone on behind closed doors for some months but a statement from the city council said the county’s invoice had triggered a notice of dispute over the business case to upgrade and operate the facility.

This included what the city termed as county’s refusal to formally include regular reviews of project progress.

Both councils failed on 24 May to reach a settlement, and will be entering the next stage of formal dispute resolution processes.

It was unclear what this process involves and both councils said they would issue no more information on the dispute.

Sinfin was a £154m waste treatment facility developed by Resource Recovery Solutions (Derbyshire), which comprised construction firm Interserve - now known as Tilbury Douglas - and waste management company Renewi.

The plant was due to become operational in 2017 but failed to pass commissioning tests and the councils terminated the contract in August 2019 after which RRS entered administration.

RRS’s administrator then took legal action against the councils over sums it said were owed to the defunct company.

The two sides reached a £93.5m out-of-court settlement in July 2023, which was half what the administrators had sought. Derby and Derbyshire then resolved to repair and open the mothballed plant for use.

A joint statement from Derby’s opposition Conservative, Liberal Democrat, Reform and Independent groups said: ”After many years and millions of pounds of taxpayers’ money the city still has nothing to show for all of the resources committed to having an operational waste plant for the city and county.”

They said Derbyshire’s demand was understood to be for the city’s proportion of energy, maintenance and other costs at the mothballed site.

The four groups predicted “what will likely be a protracted and very costly legal process” between the two councils and added: "We should be under no illusion that this £93.9m + VAT figure could bankrupt the city council which would have dire consequences for all of our services and employees at the authority.”

It is unclear why Derbyshire’s invoice is for the same sum as that in the out-of-court settlement.