Dumfries and Galloway Council made £6.9m waste deal payment

The Eco Deco waste plant transferred to the council when the contract ended

A council paid out almost £6.9m for the termination of a Private Finance Initiative (PFI) waste deal.

The figure emerged after a BBC Freedom of Information request about the financial impact of ending the contract on the Dumfries and Galloway authority.

Company accounts of Shanks Dumfries and Galloway show the council paid it a "termination sum" of £6,873,434.

A number of assets transferred to the local authority as a result, including an Eco Deco waste treatment plant.

The council entered into a 25-year PFI contract for its waste services in 2004.

'Commonplace' clauses

However, last year the private company involved sought to terminate the deal citing an annual loss of about £3m.

The contract was ended in September 2018.

A BBC FOI request sought to find out why it had cost the council more than £6m to end the deal when it had been its private partner who wanted it to conclude.

The council initially refused to release the information and an appeal was taken to the Information Commissioner.

However, the council has now revealed some details relating to the case.

It explained that it was "commonplace" for most contracts to have clauses relating to early termination.

It said they were almost a "prerequisite" of such long-term deals as circumstances could change significantly over their duration.

Assets transferred

The council said contractors often put in place infrastructure, and arrangements would be made when a contract ended early to calculate what payments were due.

After the waste deal was terminated, a range of assets transferred to the local authority including the Eco Deco plant in Dumfries, two transfer stations at Annan and Castle Douglas, eight recycling centres and five closed landfill sites.

The FOI also sought to establish if the council expected to face similar losses in running the service to those reported by its private partner.

The local authority said work was ongoing to look at options for a "new model of delivery" which were likely to go before councillors later this year.

It said that, at that stage, a comparison could be made of costs before and after the contract termination.

As a result of the information being released, the BBC has agreed to drop its appeal to the Information Commissioner.