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GMWDA attempts to stop £90m Sita damages claim

The Greater Manchester Waste Disposal Authority has launched an attempt at London’s High Court to “strike out” Sita UK’s bid to secure more than £90 million in damages over the award of the Greater Manchester waste private finance initiative, claiming that the company’s attempt was started too late.

In September, Sita began legal action against the GMWDA after missing out on the £3.8bn Greater Manchester Waste PFI contract. It is demanding damages for the authority’s “failure to award the contract to the claimant”, alleging a breach of European Union procurement regulations over transparency and equal treatment.

Sita claims that significant changes occurred to the project since the appointment of the preferred bidder, including cost increases to the contract.

The High Court hearings for GMWDA’s attempts to strike out Sita’s application started from February 4 and are expected to continue over three days.  Mr Justice Mann is overseeing the case.

Dinah Rose QC representing the GMWDA claims that Sita had not launched its legal challenge over the procurement of the contract “promptly” after being signed in April 2009.

It maintains that Sita knew by 8 April 2009 that it was the last possible date on which “time started to run”.

On the second day of the hearings (5 February) Dinah Rose QC representing the GMWDA said it was “wrong as a matter of fact” that Sita were unaware of how the contract was developing including developments such as Viridor Laing decision to involve the proposed Ineos Chlor combined heat and power plant in Runcorn in its plans and the increase of the cost of the contract from £3bn to £3.8bn.

She explained: “GMWDA gives a figure for the total cost of contract as at March 2008 – and that is £3.4bn. And what Sita says is this: “At the time that VL was appointed preferred bidder January 2007, we were told that the total cost of the contract was about £3bn. We were then told in May 2008, as part of the de-brief process, that the matter had been re-evaluated because of Ineos Chlor but the conclusion overall that they remained preferred bidder had not been re-visited. Now for the first time, they say, we were told that there was a significant increase in their costs between January 2007 and March 2008. That’s their argument.

“It can’t be right that they were not aware of those significant changes.

And they must have known those changes would have impacted on cost.”

Rose added that Sita said that the deadline date to challenge the procurement of the contract did not start until it received a letter from GMWDA relating to Sita’s enquiries to GMWDA in relation to procurement aspects of the contract on 3 July 2009. Rose said “Their defence of this application hinges on them being able to demonstrate that knowledge of that apportionment was essential in order for them know that they had a cause of action for infringement. And our answer is that is not right.”

Michael Bowsher QC, who represents Sita, outlined case law from the EU courts of justice to outline support for Sita’s case. He said there was an interest in this private claim to the taxpayer in this country and beyond so “they do not suffer this problem”.

GMWDA attempts to stop £90m Sita damages claim

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