Wakefield Waste Management PFI Project Schedule 4 Payment ... Management Project/8. Schedul… · 2.2 Unless otherwise provided, references in this Schedule 4 (Payment Mechanism)

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Wakefield Waste Management PFI Project

Schedule 4

Payment Mechanism

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1 NOT USED

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2 INTERPRETATION

2.1 Unless otherwise provided, references in this Schedule 4 (Payment Mechanism) to Clauses and Schedules shall be references to the relevant Clauses and Schedules in the Contract.

2.2 Unless otherwise provided, references in this Schedule 4 (Payment Mechanism) to parts, paragraphs, tables and appendices shall be references to parts, paragraphs, tables and appendices in this Schedule 4 (Payment Mechanism).

2.3 Where the symbol is used in formulae it shall have the meaning 'sum of'.

2.4 'm' shall relate to Months.

2.5 'y' shall relate to Contract Years.

2.6 Where the Contract Year or period to which payment relates is less than a full twelve (12) calendar months all Contract Year tonnage, volume and annually stated payment values (including the BMW to Landfill Target (tonnes)) shall be prorated to take account of the shorter period to which they relate. Where the Full Service Output Specification Commencement Date occurs part way through a Contract Year all Contract Year tonnage, volume and annually stated payment values for the Initial Service Period and Full Service Period shall be prorated to take account of the relative period to which each relates.

2.7 Where Non-Acceptance Deductions apply, the Council will use reasonable endeavours to mitigate costs incurred (save that such obligation to use reasonable endeavours shall be without prejudice to the overriding principle that the Council shall always prioritise preserving the continuity of the collection service over cost mitigation). Where Mileage Deductions apply, the Council will use reasonable endeavours to mitigate costs incurred relating to DDr, Hr

and OCr (save that such obligation to use reasonable endeavours shall be without prejudice to the overriding principle that the Council shall always prioritise preserving the continuity of the collection service over cost mitigation).

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3 UNITARY CHARGE

3.1 Unitary Charge

The Unitary Charge for each relevant Contract Year shall be calculated in accordance with the following formula from the Initial Service Commencement Date:

UC = B + L + C – BD – P – RD – M – N – T – R + OC + MTSP – RDFO + ECIP + CP + AGTPI - GHA

where:

UC Unitary Charge payable for the Contract Year

B Base Payment for the Contract Year (calculated in accordance with paragraph 4)

L Landfill Payment for the Contract Year (calculated in accordance with paragraph 5)

C Compensation Payment for the Contract Year (calculated in accordance with paragraph 6)

BD BMW Diversion Performance Deduction for the Contract Year (calculated in accordance with paragraph 7)

P Performance Deductions for the Contract Year (calculated in accordance with paragraph 8)

RD Reporting Deductions for the Contract Year (calculated in accordance with paragraph 8)

M Mileage Deductions for the Contract Year (calculated in accordance with paragraph 9)

N Non-Acceptance Deductions for the Contract Year (calculated in accordance with paragraph 10)

T Third Party Income Adjustment for the Contract Year (calculated in accordance with paragraph 11)

R Recycling Deduction for the Contract Year (calculated in accordance with paragraph 12)

OC Other Components for the Contract Year (calculated in accordance with paragraph 13)

MTSP Market Tested Services Payment for the Contract Year (calculated in accordance with paragraph 16)

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RDFO RDF Offtake Facility Upside Share for the Contract Year (calculated in accordance with paragraph 17)

ECIP Excess Commercial and Industrial Payment for the Contract Year (calculated in accordance with paragraph 18)

CP Commissioning Payment for the Contract Year (calculated in accordance with paragraph 19)

AGTPI The Additional Guaranteed TPI Payment for the Contract Year (calculated in accordance with paragraph 20)

GHA The Glasshoughton Abatement for the Contract Year (calculated in accordance with paragraph 21)

3.2 Monthly Payment

The Monthly Payment shall be calculated in accordance with paragraph 14.

3.3 Caps on Deductions

In any Contract Year the total value of Deductions (excluding the BMW Diversion Performance Deduction and Non-Acceptance Deductions) shall not exceed the Deductions Cap being:

3.3.1 during any Contract Year in the Initial Service Period

3.3.2 during any Contract Year in the Full Service Period

In the event that the cumulative total of Deductions (excluding the BMW Diversion Performance Deduction and Non-Acceptance Deductions) incurred in any relevant Contract Year exceeds the Deductions Cap then the Deductions (excluding the BMW Diversion Performance Deduction and Non-Acceptance Deductions) shall cease to apply for the remainder of such Contract Year.

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4 BASE PAYMENT ("B")

4.1 Base Payment

The Base Payment shall be calculated from the Initial Service Commencement Date based on a set of rates per tonne, which are applied to the Adjusted Eligible Tonnage of Contract Waste in a Contract Year and falling into the relevant Base Price Band. The rates per tonne in real terms change on the Full Service Commencement Date as set out in the tables in Appendix 2.

4.2 Calculation of the Base Payment

The Base Payment for the Contract Year shall be calculated in accordance with the following formula:

B = ∑(BTn x BPn)

where:

∑(BTn x BPn) The sum of (BT x BP) for each Base Price Band from 1 to ‘n’ as set out in column 1 of the relevant table in Appendix 2

BTn The Adjusted Eligible Tonnage of Contract Waste in the relevant Contract Year falling within Base Price Band ‘n’ which will equal

the higher of:

(a) Zn – MTTn

(b) Zero (0)

Zn

The lower of:

(a) Maximum Tonnage Threshold for Base Price Band ‘n’, and

(b) The higher of:

(i) Adjusted GMT except where the Contractor has failed to comply with Clause 45.7 the Adjusted GMT referred to shall be reduced by the tonnage of waste the Contractor would have secured if it had complied with its obligations under Clause 45.7, and

(ii) the Adjusted Eligible Tonnage of Contract Waste in the relevant Contract Year

MTTn Minimum Tonnage Threshold for Base Price Band ‘n’

BPn The relevant Base Price per Tonne for Base Price Band ‘n’, as set out in column 4 of the relevant table in

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Appendix 2

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5 LANDFILL PAYMENT (“L”)

5.1 Landfill Payment

The Landfill Payment for the Contract Year shall be calculated from the Initial Service Commencement Date in accordance with the following formula:

L = BLP + LTG

where:

BLP The Base Landfill Payment calculated in accordance with the following formula:

BLP = ((AALTR + ALG) x UT) + (AILTR x VT)

where:

AALTR The Actual Active Landfill Tax Rate

ALG The Landfill Gatefee per tonne for Active Waste in the relevant Contract Year

UT The lower of TALT and AALT

TALT The Target Active Landfill Tonnage in the relevant Contract Year calculated in accordance with paragraph 5.2

AALT The Actual Active Landfill Tonnage in the relevant Contract Year

AILTR The Actual Inactive Landfill Tax Rate

VT The lower of TILT and AILT

TILT The Target Inactive Landfill Tonnage in the relevant Contract Year calculated in accordance with paragraph 5.3

AILT The Actual Inactive Landfill Tonnage in the relevant Contract Year

LTG The Landfill Tax Gainshare calculated in accordance with the following formula:

LTG = EALTR x (TALT - AALT) x LTSP

: EALTR The Expected Active Landfill Tax Rate

TALT The Target Active Landfill Tonnage in the relevant Contract Year calculated in

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accordance with paragraph 5.2

AALT The Actual Active Landfill Tonnage in the relevant Contract Year

LTSP Landfill Tax Sharing Percentage

5.2 Target Active Landfill Tonnage

The Target Active Landfill Tonnage shall be calculated in accordance with the following formula:

TALT = ∑(AETCWn x LTAn) - CT + SA1 – SA3

where:

∑(AETCWn x LTAn) The sum of (AETCW x LTA) for each Base Price Band from 1 to ‘n’ as set out in column 1 of the relevant table in Appendix 2

AETCWn Adjusted Eligible Tonnage of Contract Waste falling within Base Price Band ‘n’ in a Contract Year

LTAn The relevant Landfill Target for Active Waste for Base Price Band ‘n’, as set out in column 6 of the relevant table in Appendix 2

CT The Commissioning Tonnage

SA1 The Seasonality Adjustment First Contract Year

SA3 The Seasonality Adjustment Third Contract Year

5.3 Target Inactive Landfill Tonnage

The Target Inactive Landfill Tonnage shall be calculated in accordance with the following formula:

TILT = ∑(AETCWn x LTIn)

where:

∑(AETCWn x LTIn) The sum of (AETCW x LTI) for each Base Price Band from 1 to ‘n’ as set out in column 1 of the relevant table in Appendix 2

AETCWn Adjusted Eligible Tonnage of Contract Waste falling within Base Price Band ‘n’ in a Contract

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Year

LTIn The relevant Landfill Target for Inactive Waste for Base Price Band ‘n’, as set out in column 7 of the relevant table in Appendix 2

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6 COMPENSATION PAYMENT (“C”)

6.1 Compensation Payment

The Compensation Payment for the Contract Year shall be calculated from the Initial Service Commencement Date, where applicable, in accordance with the following formula:

C = C1 + C2

where

C1 The Extended Opening Hours Compensation Payment calculated in accordance with paragraph 6.2

C2 The Rejected Load Compensation Payment calculated in accordance with paragraph 6.3

6.2 Extended Opening Hours Compensation Payment (“C1”)

6.2.1 During the first three (3) Months after the Initial Service Commencement Date, the Council will not be liable for the Extended Opening Hours Compensation Payment.

6.2.2 Subject to the provisions of paragraph 3.4.10 (c) and paragraph 3.3.4 of the Relevant Part of the Output Specification, the Council may pursuant to paragraph 3.2.2 of the Relevant Part of the Output Specification, on up to ten (10) occasions in each Contract Year prorated as appropriate, request that one or more Contractor Operated Waste Reception Point (excluding the Carrwood Road TLS) remain open for up to two (2) hours beyond the relevant Standard Opening Hours and such occasions shall not be included in the calculation of Cd pursuant to paragraph 6.2.3.

6.2.3 The Extended Opening Hours Compensation Payment, C1 shall be calculated in accordance with the following formula:

C1 = (CPD x Cd) + (CPH x Ch)

where

CPD

Cd subject to paragraph 6.2.2, the number of days, in the relevant Contract Year (excluding any day falling within the period referred to in paragraph 6.2.1), on which the Extended Opening Hours on that day are greater than

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zero (0) but less than or equal to two (2) hours for each Contractor Operated Waste Reception Point, in accordance with Service Output 3 of the Relevant Part of the Output Specification

CPH

Ch each additional hour, other than any hour falling within the period referred to in paragraph 6.2.1, (and in the case where the Extended Opening Hours for a Contractor Operated Waste Reception Point exceed two (2) hours but are less than three (3) hours, such period shall be rounded up to one (1) hour for the purpose of this calculation) in a Contract Year, where the Extended Opening Hours for each Contractor Operated Waste Reception Point are greater than two (2) hours per day, in accordance with the Relevant Part of the Output Specification

6.3 Rejected Load Compensation Payment (“C2”)

6.3.1 During the period from the date on which the Council first delivers Household Waste to the Contractor in the three (3) segregated streams set out in paragraph 4 of Schedule 36 (Council Baseline Collection Arrangements) until the date three (3) Months after the Full Service Output Specification Commencement Date, the Council will not be liable for the Rejected Load Compensation Payment.

6.3.2 The Rejected Load Compensation Payment, C2, shall be calculated in accordance with the following formula:

C2 = RL x PRL

where

RL The number of Rejected Loads (excluding any occurring during the period referred to in paragraph 6.3.1) occurring in the relevant Contract Year

PRL

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7 BMW DIVERSION PERFORMANCE DEDUCTION (“BD”)

7.1 BMW Diversion Performance Deduction

The BMW Diversion Performance Deduction for the Contract Year shall be calculated from the Initial Service Commencement Date in accordance with the following formula:

BD = (ABL – ECIT - BDT) x BDR

:

ABL The actual tonnage of accepted Contract Waste sent to Landfill in the relevant Contract Year which is BMW

ECIT The actual tonnage of accepted Excess Commercial and Industrial Tonnage in the relevant Contract Year which is BMW

BDT The BMW to Landfill Target

BDR The BMW Deduction Rate being the lower of: (a) The BMW Deduction Cap (b) The mean average cost or penalty per

tonne incurred by the Council in the relevant Contract Year under LATS or any equivalent successor regime as a result of ABL being greater than BDT

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8 PERFORMANCE DEDUCTIONS ("P") AND REPORTING DEDUCTIONS (“RD”)

8.1 Performance Deductions and Reporting Deductions

Subject to paragraph 8.2, Performance Deductions and Reporting Deductions shall be calculated from the Initial Service Commencement Date in accordance with the Performance Framework set out in the Relevant Part of the Output Specification.

8.2 Relief from Performance Deductions

8.2.1 During the first three (3) Months after the Initial Service Commencement Date, the Contractor will not be liable for any Performance Deductions and/or Reporting Deductions.

8.2.2 During the first Month after the Service Commencement Date for Welbeck HWRC, the Contractor will not be liable for any Performance Deductions and/or Reporting Deductions in respect of any failure to meet the Service Requirements of the Full Service Output Specification in relation to or arising from the Welbeck HWRC.

8.2.3 The Contractor will not be liable for any Performance Deductions and/or Reporting Deductions in respect of any failure to meet the Service Requirements of the Full Service Output Specification in relation to or arising from any of the following New Waste Management Facilities:

South Kirkby Main MRF;

South Kirkby Main Residual Waste Treatment Facility; and

South Kirkby Main Composting Facility,

until the date which is three (3) Months after the Service Commencement Date for that relevant New Waste Management Facility.

8.2.4 Where the Service Commencement Date is within the same Month for each of the following HWRCs:

Denby Dale Road HWRC

Glasshoughton HWRC

South Kirkby HWRC

then during the first three (3) Months after the Service Commencement Date for each of those HWRCs, the Contractor will not be liable for any Performance Deductions and/or Reporting

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Deductions in respect of any failure to meet the Service Requirements of the Full Service Output Specification in relation to or arising from those HWRCs.

8.2.5 Where the Service Commencement Date is not within the same Month for each of the following HWRCs:

Denby Dale Road HWRC

Glasshoughton HWRC

South Kirkby HWRC

then for the HWRC having the earliest Service Commencement Date, during the first three (3) Months after that Service Commencement Date, the Contractor will not be liable for any Performance Deductions and/or Reporting Deductions in respect of any failure to meet the Service Requirements of the Full Service Output Specification in relation to or arising from that HWRC. For the remaining HWRCs (having later Service Commencement Dates), the Contractor will not be liable for any Performance Deductions and/or Reporting Deductions in respect of any failure to meet the Service Requirements of the Full Service Output Specification in relation to or arising from those HWRCs for the first Month following the Service Commencement Date for that HWRC.

8.2.6 The Contractor will not be liable for any Performance Deductions and/or Reporting Deductions in respect of any failure to meet the Service Requirements of either the Initial Service Output Specification or the Full Service Output Specification (as applicable) in relation to or arising from the Denby Dale Road TLS until the date which is three (3) Months after the Denby Dale Road TLS Initial Service Commencement Date.

8.2.7 The Contractor will not be liable for any Performance Deductions and/or Reporting Deductions in respect of any failure to meet the Service Requirements of either the Initial Service Output Specification or the Full Service Output Specification (as applicable) in relation to or arising from the Carrwood Road TLS where the Carrwood Road TLS is Unavailable as a result of the occurrence of an Insured Risk or uninsured risk at the Carrwood Road Site (and "Insured Risk" shall have the meaning set out in the Lease of the Carrwood Road Site)

.

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9 MILEAGE DEDUCTIONS ("M")

9.1 Mileage Deductions

Mileage Deductions shall be calculated from the Initial Service Commencement Date in accordance with the following formula:

M = ∑Mr

where:

∑Mr The sum of Mr calculated for each relevant event (r) that a Waste Reception Point is Unavailable and the Council has to deliver Contract Waste to an Alternative Waste Reception Point, except where Carrwood Road TLS or part thereof is Unavailable as a result of (i)

or (ii) the occurrence of an Insured Risk or uninsured risk at the Carrwood Road Site (and "Insured Risk" shall have the meaning set out in the Lease of the Carrwood Road Site)

.

Mr DDr x (CTCr + CFCr) + (Hr x CSCr ) + OCr

where:

DDr the additional incremental distance (miles) travelled due to the relevant Waste Reception Point being Unavailable and the Council having to deliver Contract Waste to an Alternative Waste Reception Point

CTCr the Council incurred transport cost per mile (excluding fuel costs) applicable to the relevant vehicle type in accordance with the rates set out in the CTC table in Appendix 5

CFCr the Council incurred fuel cost per mile calculated in accordance with the following formula:

CFCr = CFCl x 1.2 x CFCFFC

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CFCl the average price per litre of relevant fuel charged by (or any

successor thereto) to the Council during the Month in which the Mileage Deductions are incurred

CFCCFFC the Conversion Factor for fuel costs applicable to the relevant vehicle type as set out in the CFC table in Appendix 5

Hr the additional incremental hours of staff time incurred due to the relevant Waste Reception Point being Unavailable and the Council having to deliver Contract Waste to an Alternative Waste Reception Point

CSCr the Council incurred staff cost per hour applicable to the relevant charge out rate in accordance with the rates set out in the CSC table in Appendix 5

OCr the other costs reasonably incurred by the Council due to the relevant Waste Reception Point being Unavailable and the Council having to deliver Contract Waste to an Alternative Waste Reception Point in accordance with the rates set out in the OC table in Appendix 5

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10 NON-ACCEPTANCE DEDUCTIONS ("N")

10.1 Non-Acceptance Deductions

Non-Acceptance Deductions shall be calculated from the Initial Service Commencement Date in accordance with the following formula:

N = ∑Nr

where:

∑Nr The sum of Nr calculated for each relevant event (r) that the Council is required to deliver Contract Waste to an Alternative Waste Reception Point and such Alternative Waste Reception Point is or becomes Unavailable

Nr GCr + TCr + AOCr + LACr – TSr – LSr – MSr

:

GCr additional gatefee related costs incurred by the Council including gatefee at both landfill sites and alternative treatment facilities

TCr additional tax related costs incurred by the Council which may, for the avoidance of doubt, include Landfill Tax

AOCr additional other costs incurred by the Council which may, for the avoidance of doubt, include additional transport related costs, staff related costs including overtime, additional administration related costs including rescheduling of rounds and the procurement of additional vehicles and/or staff

LACr additional LATS or any equivalent successor regime related costs incurred by the Council

TSr savings made by the Council in paying a reduced Base Payment to the Contractor to the extent that these have not already been considered in the additional costs above

LSr savings made by the Council in paying a reduced Landfill Payment to the Contractor to the extent that these have not already been considered in the additional costs above

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MSr savings made by the Council in paying a reduced Market Tested Services Payment to the Contractor to the extent that these have not already been considered in the additional costs above

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11 THIRD PARTY INCOME ADJUSTMENT ("T")

11.1 Third Party Income Adjustment

The Third Party Income Adjustment for the Contract Year shall be calculated from the Initial Service Commencement Date in accordance with the following formula:

T = GCPy + ETPIy

GCPy The GMT Clawback Payment for the relevant Contract Year calculated in accordance with paragraph 11.2

ETPIy The Excess TPI Share for the relevant Contract Year calculated in accordance with paragraph 11.3

11.2 GMT Clawback Payment (GCPy)

Where in any Contract Year the Adjusted Eligible Tonnage of Contract Waste is below the level of Adjusted GMT and as a result the Base Payment for that Contract Year has been calculated using limb (b)(i) of Zn (as defined in paragraph 4.2), the Council shall be entitled, through the GMT Clawback Payment, to receive excess Third Party Income prior to the sharing of such income with the Contractor.

The GMT Clawback Payment for the relevant Contract Year (GCPy) shall be the lower of:

(a) ∑GD1 to y - ∑GCP1 to y-1 and

(b) EGDIy

:

∑GD1 to y The aggregate of GMT Downside (GDy) in respect of all Contract Years up to and including the relevant Contract Year

GDy (AGy – AETCWy) x BP1, subject to a minimum of zero (0)

AGy Adjusted GMT for the relevant Contract Year

AETCWy Adjusted Eligible Tonnage of Contract Waste for the relevant Contract Year

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BP1 The Base Price per Tonne for Base Price Band 1, as set out in column 4 of the relevant table in Appendix 2

∑GCP1 to y-1 The aggregate of the GMT Clawback Payments in respect of all Contract Years preceding the relevant Contract Year

EGDIy The Excess GMT Downside Income in respect of the relevant Contract Year as calculated in accordance with paragraph 11.4

11.3 Excess TPI Share (ETPIy)

The Excess TPI Share for the relevant Contract Year shall be calculated in accordance with the following formula:

ETPIy = (EIy - GCPy) x 50%

:

EIy The Excess Third Party Income in respect of the relevant Contract Year as calculated in accordance with paragraph 11.5

GCPy The GMT Clawback Payment for the relevant Contract Year as calculated in accordance with paragraph 11.2

11.4 Excess GMT Downside Income (EGDIy)

The Excess GMT Downside Income for the relevant Contract Year shall be calculated in accordance with the following formula:

EGDIy = ATPIcum – GGDTPIcum – ∑EGDI1 to y-1

:

ATPIcum The cumulative Third Party Income in the period between the Initial Service Commencement Date and the end of the relevant Contract Year

GGDTPIcum The cumulative Guaranteed GMT Downside Third Party Income in the period between the Initial Service Commencement Date and the end of the relevant Contract Year calculated in accordance with paragraph 11.6

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∑EGDI1 to y-1 the aggregate of the Excess GMT Downside Income in respect of all Contract Years preceding the relevant Contract Year

11.5 Excess Third Party Income (EIy)

The Excess Third Party Income for the relevant Contract Year shall be calculated in accordance with the following formula:

EIy = ATPIcum – ∑GTPIOTH1 to y - ∑GTPINCW1 to y - OTPIGCPy – ∑EI1 to y-1

:

ATPIcum The cumulative Third Party Income in the period between the Initial Service Commencement Date and the end of the relevant Contract Year

∑GTPIOTH1 to y The aggregate of the Guaranteed Third Party Income (Other) amounts (GTPIOTHy) in respect of each Contract Year, calculated in accordance with paragraph 11.8, up to and including the relevant Contract Year

∑GTPINCW1 to y The aggregate of the Guaranteed Third Party Income (Non-Contract Waste Gate Fees) amounts (GTPINCWy) in respect of each Contract Year, up to and including the relevant Contract Year

GTPINCWy The Guaranteed Third Party Income (Non-Contract Waste Gate Fees) in the relevant Contract Year

OTPIGCPy The Other Third Party Income used in the GMT Clawback Payment for the relevant Contract Year calculated in accordance with paragraph 11.10

∑EI1 to y-1 the aggregate of the Excess Third Party Income amounts in respect of all Contract Years preceding the relevant Contract Year

11.6 Guaranteed GMT Downside Third Party Income (GGDTPIcum)

The cumulative Guaranteed GMT Downside Third Party Income in the period between the Initial Service Commencement Date and the end of the relevant Contract Year shall be calculated in accordance with the following formula:

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GGDTPIcum = ∑GTPINCW1 to y + GGDTPIOTHcum

where:

∑GTPINCW1 to y The aggregate of the Guaranteed Third Party Income (Non-Contract Waste Gate Fees) amounts (GTPINCWy) in respect of each Contract Year, up to and including the relevant Contract Year


GGDTPIOTHcum The cumulative Guaranteed GMT Downside Third Party Income (Other) in the relevant Contract Year calculated in accordance with paragraph 11.7

11.7 Guaranteed GMT Downside Third Party Income (Other) (GGDTPIOTHy)

The cumulative Guaranteed GMT Downside Third Party Income (Other), GGDTPIOTHy, for the relevant Contract Year shall be the lower of:

(a) ATPIOTHcum and

(b) ∑GTPIOTH1 to y-1

where:

ATPIOTHcum The cumulative Third Party Income excluding Non-Contract Waste gate fees in the period between the Initial Service Commencement Date and the end of the relevant Contract Year

∑GTPIOTH1 to y The aggregate of the Guaranteed Third Party Income (Other) amounts in respect of each Contract Year (GTPIOTHy), calculated in accordance with paragraph 11.8, up to and including the relevant Contract Year

11.8 Guaranteed Third Party Income (Other) (GTPIOTHy)

The Guaranteed Third Party Income (Other) for the relevant Contract Year shall be calculated in accordance with the following formula:

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GTPIOTHy = ∑(BTn x TPIFOTHn)

where:

∑(BTn x TPIFOTHn) The sum of (BT x TPIFOTH) for each Base Price Band from 1 to ‘n’ as set out in column 1 of the relevant table in Appendix 2


the higher of:

(a) Zn – MTTn

(b) Zero (0)

Zn

The lower of:


(b) The higher of:

(i) Adjusted GMT except where the Contractor has failed to comply with Clause 45.7 the Adjusted GMT referred to shall be reduced by the tonnage of waste the Contractor would have secured if it had complied with its obligations under Clause 45.7, and

(ii) the Adjusted Eligible Tonnage of Contract Waste in the relevant Contract Year


TPIFOTHn The relevant Third Party Income Factor (Other) for Base Price Band ‘n’, as set out in column 5 of the relevant table in Appendix 2

11.9 NOT USED

11.10 Other Third Party Income used in the GMT Clawback Payment (OTPIGCPy)

The Other Third Party Income used in the GMT Clawback Payment for the relevant Contract Year shall be calculated in accordance with the following formula:

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OTPIGCPy = ∑GCP1 to y-1 - ∑NCWGCP1 to y-1

:

∑GCP1 to y-1 The aggregate of the GMT Clawback Payment calculated in accordance with paragraph 11.2 in respect of all Contract Years preceding the relevant Contract Year

∑NCWGCP1 to y-

1 The aggregate of the Excess Non-Contract Waste Gate Fee Income used in the GMT Clawback Payment calculated in accordance with paragraph 11.11 in respect of all Contract Years preceding the relevant Contract Year

11.11 Excess Non-Contract Waste Gate Fee Income used in the GMT Clawback Payment (NCWGCPy)

The Excess Non-Contract Waste Gate Fee Income used in the GMT Clawback Payment for the relevant Contract Year shall be calculated in accordance with the following formula:

NCWGCPy = the lower of:

(a) GCPy and

(b) ATPINCWy - GTPINCWy

:

GCPy The GMT Clawback Payment for the relevant Contract Year as calculated in accordance with paragraph 11.2

ATPINCWy The Third Party Income in respect of Non-Contract Waste gate fees for the relevant Contract Year


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12 RECYCLING DEDUCTION (“R”)

12.1 Recycling Deduction

The Recycling Deduction for the Contract Year shall be the greater of:

12.1.1 HWRTD, and

12.1.2 HWRCRTD

where:

HWRTD Household Waste Recycling Target Deduction

HWRCRTD HWRC Recycling Target Deduction being the aggregate of the HWRCRTD calculated in accordance with paragraphs 12.3 and 12.4.

12.2 Household Waste Recycling Target Deduction

The Household Waste Recycling Target Deduction for the relevant Contract Year is calculated in accordance with the following formula:

HWRTD = (HWRT – (AHWR + ARC + CRF)) x 100 x HWRFA

:

HWRT The Household Waste Recycling Target

AHWR The Contractor’s Actual Contribution to the Household Waste Recycling Target

ARC The Council’s Actual Contribution to the Household Waste Recycling Target

CRF The Council Recycling Failure to be calculated in accordance with the following formula:

CRF = GCC – ARC

:

GCC = Guaranteed Council Contribution

HWRFA The Household Waste Recycling Failure Adjustment

12.3 HWRC Recycling Target Deduction for Initial Facilities

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The HWRC Recycling Target Deduction for each relevant Contract Year for Initial Facilities is calculated in accordance with the following formula:

HWRCRTD = (HWRCRT - AHWRC) x HWRCRFA x 100

:

HWRCRT The HWRC Recycling Target

AHWRC The Contractor’s performance (as a percentage) against the HWRC Recycling Target in the relevant Contract Year, calculated in accordance with paragraph 3.1.2 of Part 1 of Schedule 1 (Contract Targets and Output Specification)

HWRCRFA The HWRC Recycling Failure Adjustment

12.4 HWRC Recycling Target Deduction for New Waste Management Facilities

The HWRC Recycling Target Deduction for each relevant Contract Year for New Waste Management Facilities is calculated in accordance with the following formula:

HWRCRTD = ∑HWRCRTDf

:

∑HWRCRTDf The sum of amounts calculated individually in accordance with the following formula for each HWRC:

(HWRCRT – AHWRCR) x HWRCRFA x 100

where:

HWRCRT The HWRC Recycling Target

AHWRCR The Contractor’s performance (as a percentage) against the HWRC Recycling Target in the relevant Contract Year, calculated in accordance with paragraph 3.2.2 of Part 1 of Schedule 1 (Contract Targets and Output Specification)

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HWRCRFA The HWRC Recycling Failure Adjustment

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13 OTHER COMPONENTS (“OC”)

13.1 Other Components

Other Components shall be calculated in accordance with the following formula:

OC = NNDR + EC – ES + SW + WCL - AA + MATSP + CRCP + OA1 – OA2 +/- PC

where:

NNDR The value of NNDR actually incurred by the Contractor in respect of the Sites listed in Appendix 1

EC The value of any Exceptional Cost

ES The value of any Exceptional Saving

SW Specific Waste Payment calculated in accordance with the following formula:

SW = ∑(Vw x Pw)

where:

∑(Vw x Pw) The sum of (Vw x Pw) for each Specific Waste Item listed in Appendix 4

Vw The number of units Handled by the Contractor for the relevant Specific Waste Item in the relevant Contract Year

Pw The Specific Waste Item Price for the relevant Specific Waste Item in the relevant Contract Year, where income shall be a negative price.

WCL The Waste Minimisation and Community Liaison Fee paid to the Contractor for performing the relevant services as shown in paragraphs 1 and 2 of the Relevant Part of the Output Specification being

for the relevant Contract Year.

AA The aggregate of Agreed Abatement(s) in the relevant Contract Year as calculated in accordance with Clause 55.1.19 (Changes to the Works or Service)

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MATSP The Maximum Annual Tonnage Surplus Payment shall be payable in the event that the Adjusted Eligible Tonnage of Contract Waste in any relevant Contract Year exceeds the Maximum Annual Tonnage in the relevant Contract Year and shall be calculated as follows:

MATSP = (AETCW – MAT) x CAD

where:

AETCW Adjusted Eligible Tonnage of Contract Waste in any relevant Contract Year

MAT Maximum Annual Tonnage in the relevant Contract Year

CAD Cost of alternative disposal for each tonne of Adjusted Eligible Tonnage of Contract Waste in excess of Maximum Annual Tonnage. The form of alternative disposal and the costs shall be agreed in advance with the Council (acting reasonably), shall not double count amounts which can be recovered by the Contractor through any other provisions of the Contract, and the costs shall be limited to:

i) relevant gatefees associated with the disposal

ii) relevant landfill tax associated with the disposal, and

iii) transport costs incurred

iv) additional other costs incurred by the Contractor which may, for the avoidance of doubt, include additional transport related costs, staff related costs including overtime and additional administration related

30

costs

CRCP The CRC Payment calculated in accordance with the following formula:

CRCP = (CRCELEC x EP) + (CRCGAS x EG)

where:

CRCELEC The prevailing rate of the CRC Cost per MWh for Electricity in the relevant Contract Year

EP The lower of TE and AE

TE Target Electricity as calculated in accordance with paragraph 13.2 in the relevant Contract Year

AE Actual Electricity in the relevant Contract Year

CRCGAS The prevailing rate of the CRC Cost per KWh for Gas in the relevant Contract Year

EG The lower of TG and AG

TG Target Gas as calculated in accordance with paragraph 13.3 in the relevant Contract Year

AG Actual Gas in the relevant Contract Year

OA1 Any other ad hoc amounts payable by the Council to the Contractor in accordance with the Contract

OA2 Any other ad hoc amounts payable by the Contractor to the Council in accordance with the Contract

PC Any amounts payable to the Contractor (+) or by the Contractor (-), as applicable, in accordance with Clause 77 (Pensions)

13.2 Target Electricity

The Target Electricity amount in respect of electricity consumed by the Waste Management Facilities shall be calculated in accordance with the following formula:

TE = ∑(BTn x CFELECn)

31

where:

∑(BTn x CFELECn) The sum of (BT x CFELECn) for each Base Price Band from 1 to ‘n’ as set out in column 1 of the relevant table in Appendix 3


the higher of:

(a) Zn – MTTn

(b)

Zn

The lower of:


(b) the Adjusted Eligible Tonnage of Contract Waste in the relevant Contract Year


CFELECn The Conversion Factor for electricity costs for tonnage band n as set out in column 6 of Appendix 3;

13.3 Target Gas

The Target Gas amount in respect of gas consumed at the South Kirkby Main Residual Waste Treatment Facility shall be calculated in accordance with the following formula:

TG = ∑(BTn x CFGASn)

where:

∑(BTn x CFGASn) The sum of (BT x CFGASn) for each Base Price Band from 1 to ‘n’ as set out in column 1 of the relevant table in Appendix 3


the higher of:

(c) Zn – MTTn

32

(d)

Zn

The lower of:

(e) Maximum Tonnage Threshold for Base Price Band ‘n’, and

(f) the Adjusted Eligible Tonnage of Contract Waste in the relevant Contract Year


CFGASn The Conversion Factor for gas costs for tonnage band n as set out in column 5 of Appendix 3;

33

14 MONTHLY PAYMENT

14.1 The Monthly Payment shall be calculated from the Initial Service Commencement Date.

14.2 The Contractor shall prepare an Initial Waste Flow Forecast and Unitary Charge Forecast and submit them to the Council within five (5) Business Days of the beginning of the month of December before the start of each Contract Year. To prepare the Initial Waste Flow Forecast, unless the Parties agree otherwise, the Contractor shall:

14.2.1 calculate the ratio of the aggregate of the actual waste flows for the twelve (12) complete Months from October to September preceding the date on which the Initial Waste Flow Forecast is set to the forecast wasteflows in the Base Case for that same twelve (12) month period

14.2.2 apply this ratio to the Eligible Tonnage of Contract Waste tonnages set out in the Base Case for the subsequent Contract Year and the resultant figure shall be the Initial Waste Flow Forecast. The Initial Waste Flow Forecast shall be used to calculate the Unitary Charge Forecast for the subsequent Contract Year.

14.3 For the purposes of the first Contract Year the Initial Waste Flow Forecast shall be assumed to be and for the purposes of the second Contract Year, the Initial Waste Flow Forecast shall be assumed to be tonnes unless the Parties agree that actual tonnages are predicted to be substantially different.

14.4 For the purposes of the first Contract Year and final Contract Year, the Initial Waste Flow Forecast and Unitary Charge Forecast shall be subject to a pro rata adjustment to take account of the number of days or Months in the first Contract Year or final Contract Year.

14.5 Within ten (10) Business Days of the end of each month of June, September, December and March the Contractor shall calculate the ratio of the aggregate actual waste flows, based on data which is available to the Contractor at the time for the preceding three (3) complete months to the actual waste flows in the equivalent period for the preceding Contract Year. This ratio shall then be applied to the actual Contract Waste tonnages for the preceding Contract Year and the resultant figure shall be used in order to revise the Unitary Charge Forecast for the current Contract Year.

14.6 not used

14.7 The Monthly Payment shall be calculated in accordance with the following formula:

MPm = UCFm x (m/M) - ∑UCF1 to m-1 + MAm + UCR

34

where:

MPm Monthly Payment for the relevant Month

UCFm Unitary Charge Forecast for the relevant Month

m The number of Months which have passed from the beginning of the Contract Year up to and including the relevant Month, for which the Monthly Payment is being determined. The value of m shall be between one (1) and twelve (12) depending upon the relevant Month in the Contract Year, for example in a full Contract Year for the Month of April, m = 1

M The number of Months in the Contract Year which shall equal twelve (12) save in the first Contract Year it shall be the number of Months from the Initial Service Commencement Date until the following 31 March and in the final Contract Year it shall be the number of Months from the 1 April in such Contract Year until the Expiry Date, or the Termination Date, if earlier

∑UCF1 to m-

1

The sum of the Unitary Charge Forecasts previously invoiced for each Month in the relevant Contract Year

MAm Monthly Adjustments for the relevant Month calculated in accordance with the following formula:

MAm = Cm-2 - Pm-2 – RD m-2 - Mm-2 - Nm-2 + OCm-x + ECIPm-x -GHAm-2

Cm-2 Compensation Payment for Month, m-2, if applicable, calculated in accordance with paragraph 6 of this Schedule 4 (Payment Mechanism)

Pm-2 Performance Deductions for Month, m-2, if applicable, calculated in accordance with paragraph 8 of this Schedule 4 (Payment Mechanism)

RD m-2 Reporting Deductions for Month, m-2, if applicable, calculated in accordance with paragraph 8 of this Schedule 4 (Payment Mechanism)

Mm-2 Mileage Deductions for Month, m-2, if applicable, calculated in accordance with paragraph 9 of this Schedule 4 (Payment Mechanism)

Nm-2 Non-Acceptance Deductions for Month, m-2, if applicable, calculated in accordance with paragraph 10 of this Schedule 4 (Payment Mechanism)

OCm-x Other Components for Month, m-x, if applicable, calculated in accordance with paragraph 13 of this Schedule 4 (Payment Mechanism) where x =1 or 2 unless the Parties

35

agree otherwise

ECIPm-x Excess Commercial and Industrial Payment for Month, m-x, if applicable, calculated in accordance with paragraph 18 of this Schedule 4 (Payment Mechanism), where x = 1 or 2 unless the Parties agree otherwise

GHAm-2 Glasshoughton Abatement for Month, m-2, if applicable, calculated in accordance with paragraph 21 of this Schedule 4 (Payment Mechanism)

UCR The Unitary Charge Reconciliation, to be made as soon as practicable but in any event within three (3) Months following the final Month in the previous Contract Year, calculated in accordance with the following formula:

UCR = FUC - ∑MPFY

FUC The Unitary Charge for the previous Contract Year calculated in accordance with paragraph 3.1 which shall reflect actual figures for the relevant Contract Year

∑MPFY The sum of Monthly Payments invoiced in the previous Contract Year (y-1) directly relating to that Contract Year:

∑UCF (1 to 12) y-1 + MA (1 to 12) y-1

14.8 The Monthly Payment shall be invoiced in accordance with Clause 57.2 (Invoicing and Payment Arrangements). The Monthly Payment for month m shall include the Base Payment in respect of the Fixed Proportion of Band 1 for Month m+1. All other amounts for the Base Payment shall relate to Month m.

36

15 INDEXATION PROVISIONS

15.1 Components of the Unitary Charge shall be subject to indexation, as follows:

Component of the Unitary Charge Index to be used

Deductions Cap

Base Payment – BP1

Base Payment – BPn where n >1

Landfill Payment – ALG (until 18 November 2013 following which the rate will be Market Tested)

Extended Opening Hours Compensation Payment, C1 - CPD

Extended Opening Hours Compensation Payment, C1 - CPH

Rejected Load Compensation Payment, C2 - PRL

BMW Diversion Performance Deduction – BMW Deduction Cap

Performance Deductions

Mileage Deductions – CTC

Mileage Deductions – CFC

Mileage Deductions – CSC

Mileage Deductions – OC

Third Party Income Adjustment -

37


GTPINCW

Third Party Income Adjustment – TPIFOTH

Household Waste Recycling Target Deduction - HWRFA

HWRC Recycling Target Deduction - HWRCRFA

Other Components - Waste Minimisation and Community Liaison Fee

Market Tested Services Payment – Market Tested Price

Market Tested Services Payment - Base Price of Diesel

Market Tested Services Payment - Base Price of Effluent

Market Tested Services Payment - Base Price of Fixed Cost of Electricity

Market Tested Services Payment - Base Price of Fixed Cost of Gas

Market Tested Services Payment - Base Price of Fixed Cost of Water

Market Tested Services Payment -

38


Base Price of Gas

Market Tested Services Payment - Base Price of Red Diesel

Market Tested Services Payment Base Price of Sewerage

Market Tested Services Payment - Base Price of transporting Contract Waste from Denby Dale Road TLS to the South Kirkby Main Residual Waste Treatment Facility

Market Tested Services Payment - Base Price of transporting Project RDF from the South Kirkby Main Residual Waste Treatment Facility to the Ferrybridge Facility

Market Tested Services Payment - Base Price of Water

RDF Offtake Facility Upside Share - RDFEP

Excess Commercial and Industrial Payment – Excess Commercial and Industrial Rate

Commissioning Payment - CR

15.2 Base Payment Index

39

The Base Payment Index shall be calculated in accordance with the following formula:

IBPI = (I2 x (1 – FP)) + FP

where:

IBPI Base Payment Index for the relevant Contract Year

I2 Full Indexation Factor (I2) for the relevant Contract Year calculated in accordance with paragraph 15.5

FP Fixed Proportion of the Base Payment which shall be during the Initial Service Period and

during the Full Service Period

15.3 Full Indexation Factor (RPIX)

The Full Indexation Factor (RPIX) for the Contract Year ‘y’ represents the increase or decrease in RPIX over the period since the Base Date and shall be calculated as follows:

base

y

RPIXRPIX

RPIXI

1

where:

IRPIX The Full Indexation Factor (RPIX) for the relevant Contract Year

RPIXy-1 The value published for RPIX for the January immediately preceding Contract Year ‘y’

RPIXbase The value published for RPIX at January 2011 being 228.2

The Full Indexation Factor (RPIX) shall be applied to the relevant components of the Unitary Charge as listed in paragraph 15.1 from each Indexation Date.

15.4 Full Indexation Factor (LAB)

The Full Indexation Factor (LAB) for the Contract Year ‘y’ represents the increase or decrease in RPIX over the period since the Base Date and shall be calculated as follows:

For the first Contract Year:

0075.01

base

y

LABRPIX

RPIXI

40

For each Contract Year following the first Contract Year:

10075.02

1

1

y

y

LAByLABRPIX

RPIXII

where:

ILAB The Full Indexation Factor (LAB) for the relevant Contract Year

ILABy-1 The Full Indexation Factor (LAB) for the Contract Year immediately preceding the relevant Contract Year

RPIXy-2 The value published for RPIX for the January immediately preceding Contract Year ‘y-1’

RPIXy-1 The value published for RPIX for the January immediately preceding Contract Year ‘y’


The Full Indexation Factor (LAB) shall be applied to the relevant components of the Unitary Charge as listed in paragraph 15.1 from each Indexation Date.

15.5 Full Indexation Factor (I2)

The Full Indexation Factor for the Contract Year y over the period since the Base Date and shall be calculated as follows:

I2 = (IRPIX x RPIx%) + (ILAB x LAB%)

where:

IRPIX The Full Indexation Factor (RPIX) for the relevant Contract Year calculated in accordance with paragraph 15.3

ILAB The Full Indexation Factor (LAB) for the relevant Contract Year calculated in accordance with paragraph 15.4

RPIx% during the Initial Service Period and during the Full Service Period

LAB% during the Initial Service Period and during the Full Service Period

The Full Indexation Factor shall be applied to the relevant components of the Unitary Charge as listed in paragraph 15.1 from each Indexation Date.

41

15.6 Electricity Indexation Factor

The Electricity Indexation Factor for the Contract Year ‘y’ represents the increase or decrease in RPIX over the period since the Base Date and shall be calculated as follows:

base

y

yRPIX

RPIXmidEIF

where:

RPIXmidy The value published for RPIX for the July falling within Contract Year ‘y’


The Electricity Indexation Factor shall be applied from the relevant Electricity Indexation Date.

15.7 Forecast Index

For the purposes of calculating indexation pursuant to this paragraph 15 where the relevant Index has not been published ten (10) days prior to the relevant Indexation Date or ten (10) days prior to the relevant Electricity Indexation Date, as applicable, then:

A forecast of the relevant Index shall be used in replacement for the relevant Index

Within twenty (20) Business Days of the Index Publication Date, the Full Indexation Factor for the relevant Contract Year shall be recalculated, using the published Index rather than the forecast of the relevant Index, and the relevant indexable items as set out in paragraph 15.1 for such Index shall be adjusted for the period from the relevant Indexation Date to the Index Publication Date; and

If the amount of the Monthly Payment paid by the Council in respect of the relevant period is either in excess of or less than the amount which would have been paid had RPIX for the month of January (in respect of the Indexation Date) or the month of July (in respect of the Electricity Indexation Date), in the relevant period been published, an amount equal to the shortfall or excess shall be added to or deducted from the first or succeeding Monthly Payment which follows the recalculation pursuant to this paragraph 15.

42

15.8 Changes to Indices Affecting any Indexation Factor

15.8.1 If there is a material change in the nature or basis of any Index, or if any Index is discontinued, the Parties shall seek to agree (acting reasonably) upon an alternative to that Index which as closely replicates the relevant Index as is possible, and such consequential changes shall be made to the calculations provided for in this paragraph 15 as are necessary to ensure that all payments to be made pursuant to this Contract shall be the same as if such change had not occurred. Any dispute regarding changes to the Index and/or calculations may be referred by either Party to the Dispute Resolution Procedure.

15.8.2 If any error or mistake shall occur in the publication for the figures for the relevant Index which have been used at any time in any calculation pursuant to this Schedule which is subsequently duly acknowledged and corrected by the Office of National Statistics or the relevant body with responsibility for the publication of such Index, the calculations in which the incorrect figures were used for the adjustments of any part of the Monthly Payment shall be recalculated using the correct figures. Any dispute regarding the recalculations pursuant to this paragraph 15 may be referred at the request by either Party to the Dispute Resolution Procedure. Any overpayment or underpayment by either Party to the other which has occurred as a result of the incorrect figures shall be paid or repaid by the Party to the other within seven (7) Business Days of the recalculation being agreed or determined (as the case may be).

43

16 MARKET TESTED SERVICES PAYMENT (“MTSP”)

16.1 The Market Tested Services Payment for the Contract Year shall be calculated from the Full Service Commencement Date in accordance with the following formula:

MTSP = MTPDDSK + MTPSKFB + MTPIT + MTPUTIL

where:

MTPDDSK The Market Tested Payment (TLS) in respect of the transport of Contract Waste from Denby Dale Road TLS to South Kirkby Main Residual Waste Treatment Facility, as calculated in accordance with paragraph 16.2;

MTPSKFB The Market Tested Payment (RDF) in respect of the transport of RDF from South Kirkby Main Residual Waste Treatment Facility to the Ferrybridge Facility as calculated in accordance with paragraph 16.3;

MTPIT The Market Tested Payment (Fuel) in respect of fuel consumed by vehicles for moving Contract Waste within or between the Waste Management Facilities and Landfill Sites in the provision of the Service, as calculated in accordance with paragraph 16.4;

MTPUTIL The Market Tested Payment (Utilities) in respect of utilities, as calculated in accordance with paragraph 16.5;

16.2 Market Tested Payment (TLS) (MTPDDSK)

The Market Tested Payment (TLS) for the Contract Year shall be calculated in accordance with the following formula:

MTPDDSK = TCWDD x MTPRDDSK

where:

TCWDD The tonnage of Contract Waste which is transported from the Denby Dale Road TLS to the South Kirkby Main Residual Waste Treatment Facility in the relevant Contract Year;

MTPRDDSK The Market Tested Price per tonne (Indexed) for transporting the tonnage of Contract Waste

44

from the Denby Dale Road TLS to the South Kirkby Main Residual Waste Treatment Facility in the relevant Contract Year or prior to the first Market Testing Date, the Base Price of transporting Contract Waste from Denby Dale Road TLS to the South Kirkby Main Residual Waste Treatment Facility in the relevant Contract Year;

16.3 Market Tested Payment (RDF) (MTPSKFB)

The Market Tested Payment (RDF) for the Contract Year shall be calculated in accordance with the following formula:

MTPSKFB = ∑(BTn x CFSKFBn) x MTPRSKFB

where:

∑(BTn x CFSKFBn) The sum of (BT x CFSKFBn) for each Base Price Band from 1 to ‘n’ as set out in column 1 of the relevant table in Appendix 3


the higher of:

(a) Zn – MTTn

(b)

Zn

The lower of:


(b) the Adjusted Eligible Tonnage of Contract Waste in the relevant Contract Year


CFSKFBn The Conversion Factor for transporting Project RDF from the South Kirkby Main Residual Waste Treatment Facility to the Ferrybridge Facility for tonnage band n as set out in column 4 of Appendix 3;

MTPRSKFB The Market Tested Price per tonne (Indexed) for transporting Project RDF from the South Kirkby Main Residual Waste Treatment Facility to the Ferrybridge Facility in the relevant Contract Year

45

or prior to the first Market Testing Date, the Base Price of transporting Project RDF from the South Kirkby Main Residual Waste Treatment Facility to the Ferrybridge Facility in the relevant Contract Year;

16.4 Market Tested Payment (Fuel) (MTPIT)

The Market Tested Payment (Fuel) for the Contract Year shall be calculated in accordance with the following formula:

MTPIT = (MTPRD x D) + (MTPRDMIN x DDIFF) + (MTPRRD x RD) + (MTPRRDMIN x RDDIFF)

where:

MTPRD Market Tested Price per litre of diesel (Indexed) in the relevant Contract Year or prior to the first Market Testing Date, the Base Price of Diesel (Indexed) in the relevant Contract Year;

D the lower of:

- Actual Diesel, and

- Target Diesel

in the relevant Contract Year

MTPRDMIN the lower of:

- the Base Price of Diesel (Indexed), and

- the Market Tested Price per litre of diesel (Indexed)


DDIFF the amount calculated by:

Target Diesel – D


MTPRRD Market Tested Price per litre of red diesel (Indexed) in the relevant Contract Year or prior to the first Market Testing Date, the Base Price of Red Diesel (Indexed) in the relevant Contract Year;

RD the lower of:

46

- Actual Red Diesel, and

- Target Red Diesel


MTPRRDMIN the lower of:

- the Base Price of Red Diesel (Indexed), and

- the Market Tested Price per litre of red diesel (Indexed)


DRDIFF the amount calculated by:

Target Red Diesel – RD


16.5 Market Tested Payment (Utilities) (MTPUTIL)

The Market Tested Payment (Utilities) for the Contract Year shall be calculated in accordance with the following formula:

MTPUTIL = MTPGAS + MTPRWATER + MTPRELEC

where:

MTPGAS The Market Tested Payment (Gas) in respect of gas consumed at the South Kirkby Main Residual Waste Treatment Facility, as calculated in accordance with paragraph 16.6;

MTPWATER The Market Tested Payment (Water) in respect of water consumed at the South Kirkby Main Residual Waste Treatment Facility, as calculated in accordance with paragraph 16.7;

MTPELEC The Market Tested Payment (Electricity) in respect of the fixed cost of electricity provision at the South Kirkby Main Residual Waste Treatment Facility, as calculated in accordance with paragraph 16.8;

16.6 Market Tested Payment (Gas) (MTPGAS)

47

The Market Tested Payment (Gas) for the Contract Year shall be calculated in accordance with the following formula:

MTPGAS = (TG x MTPRGAS) + MTPFIXGAS

where:

TG Target Gas as calculated in accordance with paragraph 13.3 in the relevant Contract Year

MTPRGAS The Market Tested Price per MWh (Indexed) for gas consumed at the South Kirkby Main Residual Waste Treatment Facility in the relevant Contract Year or prior to the first Market Testing Date, the Base Price of Gas in the relevant Contract Year;

MTPFIXGAS The Market Tested fixed cost of gas in respect of the provision of gas to the South Kirkby Main Residual Waste Treatment Facility in the relevant Contract Year or prior to the first Market Testing Date, the Base Price of Fixed Cost of Gas in the relevant Contract Year;

16.7 Market Tested Payment (Water) (MTPWATER)

The Market Tested Payment (Water) for the Contract Year shall be calculated in accordance with the following formula:

MTPWATER = MTPFIXWATER + (TWU x MTPRWATER) +

(TSU x MTPRSEW) + (TEU x MTPREFF)

where:

MTPFIXWATER The Market Tested fixed cost of water provision in respect of the South Kirkby Main Residual Waste Treatment Facility in the relevant Contract Year or prior to the first Market Testing Date, the Base Price of Fixed Cost of Water in the relevant Contract Year;

TWU The Target Water Usage

MTPRWATER The Market Tested Price per m3 (Indexed) for water usage at the South Kirkby Main Residual Waste Treatment Facility in the relevant Contract Year or prior to the first Market Testing Date, the Base Price of Water in the relevant

48

Contract Year;

TSU The Target Sewerage Usage

MTPRSEW The Market Tested Price per m3 (Indexed) for sewerage usage at the South Kirkby Main Residual Waste Treatment Facility in the relevant Contract Year or prior to the first Market Testing Date, the Base Price of Sewerage in the relevant Contract Year;

TEU The Target Effluent Usage

MTPREFF The Market Tested Price per m3 (Indexed) for effluent usage at the South Kirkby Main Residual Waste Treatment Facility in the relevant Contract Year or prior to the first Market Testing Date, the Base Price of Effluent in the relevant Contract Year;

16.8 Market Tested Payment (Electricity) (MTPELEC)

The Market Tested Payment (Electricity) for the Contract Year shall be calculated in accordance with the following formula:

MTPELEC = MTPEFIX

where:

MTPEFIX The Market Tested fixed cost in respect of the provision of electricity for the South Kirkby Main Residual Waste Treatment Facility or prior to the first Market Testing Date, the Base Price of Fixed Cost of Electricity in the relevant Contract Year;

49

17 RDF OFFTAKE FACILITY UPSIDE SHARE (“RDFO”)

50

51

52

18 EXCESS COMMERCIAL AND INDUSTRIAL PAYMENT

18.1 The Excess Commercial and Industrial Payment shall be calculated from the Initial Service Commencement Date.

18.2 In calculating the Excess Commercial and Industrial Payment the Excess Commercial and Industrial Rates included in Appendix 6 as at the Contract Date shall be used for the first two (2) Contract Years, save where the circumstances set out in paragraphs 18.2.3 and 18.2.4 of this Schedule 4 (Payment Mechanism) apply.

18.2.3 The Contractor and/or subcontractor is able to Handle a category of Excess Commercial and Industrial Tonnage (including through any Council Third Party Contracts novated/transferred from the Council to the Contractor and/or subcontractor at Initial Service Commencement Date) at a rate less than that included in Appendix 6 for the relevant category, in which case the relevant Excess Commercial and Industrial Rate will be the lower of the annual average of:

18.2.3.1 the actual rate incurred by the Contractor and/or subcontractor multiplied by , and

18.2.3.2 the rate included in Appendix 6 for the relevant category.

18.2.4 The Contractor and/or subcontractor is able to generate revenue from a category of Excess Commercial and Industrial Tonnage (including through Council Third Party Contracts novated/transferred from the Council to the Contractor and/or subcontractor at Initial Service Commencement Date) in which case the relevant Excess Commercial and Industrial Rate will be the actual rate received by the Contractor and/or subcontractor, net of any incremental costs (including. transport, multiplied by . For the avoidance of doubt where the Excess Commercial and Industrial Rate relates to revenue/income it shall show as a negative amount.

18.3 For the third and each subsequent Contract Year the Contractor shall prepare a proposal in respect of an update to the Excess Commercial and Industrial Rates included in Appendix 6 and submit it to the Council no later than nine (9) Months before the start of each relevant Contract Year. The Parties agree and acknowledge that the proposed Excess Commercial and Industrial Rates (which for the avoidance of doubt may be negative) shall be set at a level which covers the Contractor’s reasonable costs of Handling a tonne of each category of Excess Commercial and Industrial Tonnage. The proposed Excess Commercial and Industrial Rates provided by the Contractor shall:

53

18.3.1 be provided on an open book basis and be accompanied by an explanation setting out how the rates have been calculated for each waste type;

18.3.2 not include recovery of any amounts which have already been recovered through the payment by the Council of any other component of the Unitary Charge, and

18.3.3 not be in excess of the rates charged by the Contractor to any third party for the Handling of Non-Contract Waste of the same or similar waste type.

18.4 The Parties shall meet as reasonably necessary following the receipt by the Council of the Contractor's proposal pursuant to Clause 18.3 in order to discuss and agree (acting reasonably) by no later than three (3) Months before the start of each Contract Year, the Excess Commercial and Industrial Rates which are to be included in Appendix 6 for use in the following Contract Year. Where the Parties are unable to agree the Excess Commercial and Industrial Rates by three (3) months prior to the start of the next Contract Year either Party may refer the matter to the Dispute Resolution Procedure.

18.5 The Excess Commercial and Industrial Payment shall be calculated in accordance with the following formula:

ECIP = ∑(ECITc x ECIRc) where:

∑(ECITc x ECIRc) The sum of (ECITc x ECIRc) for each category of Excess Commercial and Industrial Tonnage as set out in Appendix 6

ECITc The Excess Commercial and Industrial Tonnage in the relevant Contract Year falling within that category ‘c’ which has triggered the Excess Commercial and Industrial Payment

ECIRc The Excess Commercial and Industrial Rate for the category ‘c’

18.6 The Contractor shall not have an exclusive right to any Contract Waste which, were it to be delivered to the Contractor, would fall within the definition of Excess Commercial and Industrial Tonnage.

54

19 COMMISSIONING PAYMENT

19.1 The Commissioning Payment shall be calculated during the Commissioning Payment Period in accordance with the following formula:

CP = CT X CR

CT The Commissioning Tonnage

CR per tonne

55

20 ADDITIONAL GUARANTEED TPI PAYMENT

56

57

58

59

21 GLASSHOUGHTON ABATEMENT

21.1 Where on the Full Service Commencement Date, the Practical Completion Certificate has not been issued for Glasshoughton HWRC, the Contractor shall be liable for the Glasshoughton Abatement from the Full Service Commencement Date until the date on which the Practical Completion Certificate has been issued for the Glasshoughton HWRC.

21.2 The Glasshoughton Abatement shall be calculated in accordance with the following formula:

GHA = GHDP x GHDD

where:

GHDP

GHDD where paragraph 21.1 applies, each day in the relevant Month where following the Full Service Commencement Date the Practical Completion Certificate has not been issued for Glasshoughton HWRC

60

APPENDIX 1

NNDR Sites

Sites

Castleford Site

Ferrybridge Site

Fitzwilliam Site

South Kirkby Manface Quarry Site

Ossett Site

Welbeck Site

Glasshoughton Site

Denby Dale Road Site

South Kirkby Main Site

Temporary TLS Site/Temporary HWRC Site

0

APPENDIX 2

Base Price Bands used in calculating the Base Payment

Initial Service Period

Base Price Band

Minimum Tonnage

Threshold

Maximum Tonnage

Threshold

Base Price per Tonne (£) within Base Price Band

(Indexed)

Third Party Income Factor (Other) (£) within Base Price Band (Indexed)

Landfill Target for Active Waste

Landfill Target for Inactive

Waste

Band 1

Band 2

Band 3

1

Full Service Period

Base Price Band

Minimum Tonnage

Threshold

Maximum Tonnage

Threshold

Base Price per Tonne (£) within Base Price Band

(Indexed)

Unindexed element of Base Price per Tonne (£) included in Base Price (for

information)

Third Party Income Factor

(Other) (£) within Base Price Band (Indexed)

Landfill Target for

Active Waste

Landfill Target

for Inactive Waste

Band 1

Band 2

Band 3

0

APPENDIX 3

CONVERSION FACTORS

Base Price Band

Minimum Tonnage Threshold

Maximum Tonnage Threshold

CFSKFBn CFGASn CFELECn

Band 1

Band 2

Band 3

0

APPENDIX 4

Specific Waste Items

Specific Waste Item Unit

Specific Waste Item Price in first Contract Year and subject to Clause

62 (Market Testing) thereafter

Specific Waste which the Contractor is requested to Handle by the Council, on an ad hoc basis

Animal Carcases

Collection from HWRCs for the Recycling of Lead Acid Vehicle Batteries

per tonne

Collection from HWRCs for the Recycling of Domestic Batteries

per tonne

Landfill of white cement resin bonded Asbestos Waste

(Note: part of WMML Welbeck Contract Interim II)

per tonne

Disposal of Clinical Waste per tonne

Collection from HWRCs for the Disposal of Household/Garden chemicals

Collection from HWRCs for the Re-Use of Paints and Varnishes

Collection from HWRCs for

1

Specific Waste Item Unit

Specific Waste Item Price in first Contract Year and subject to Clause

62 (Market Testing) thereafter

Disposal of Paints and Varnishes

Collection from HWRCs for Recycling of Tyres

per small de-rimmed tyre

per rimmed or 4x4 tyre

per small truck tyre

per large truck tyre

Collection from HWRCs for Reuse of Used gas bottles

per collection

Collection from HWRCs for Recycling of Used Gas Bottles which cannot be Reused

per collection

Collection from HWRCs for Recycling of Used Oils

per collection

2

APPENDIX 5

Mileage Deduction Tables CTC Table

Vehicle Type £/Mile Indexed

7,500 KG REFUSE COLLECTOR/LIFT

26,000 KG REFUSE COLLECTOR/LIFT

7,500 KG TIPPER (CAGED/LIFT)

18,000 KG SKIPLOADER

32,000 KG SKIPLOADER REAR END

STREETSWEEPER

RORO

CFC Table

Vehicle Type CFCFFC

7,500 KG REFUSE COLLECTOR/LIFT/ADDITIONAL EXTERNAL HIRE 7,500 KG REFUSE COLLECTOR

26,000 KG REFUSE COLLECTOR/LIFT/ ADDITIONAL EXTERNAL HIRE 26,000 KG REFUSE COLLECTOR

7,500 KG TIPPER (CAGED/LIFT)/ ADDITIONAL EXTERNAL HIRE 7,500 KG TIPPER

18,000 KG SKIPLOADER/ADDITIONAL EXTERNAL HIRE18,000 KG SKIPLOADER

32,000 KG SKIPLOADER REAR END/ADDITIONAL EXTERNAL HIRE 32,000 KG SKIPLOADER REAR END

STREETSWEEPER

RORO

3

CSC Table

Staff £/Hour Indexed

Time Time & 1/3

Time & 2/3

DRIVER

DRIVER PLUS 1 LABOURER

DRIVER PLUS 2 LABOURERS

SUPERVISOR

OC Table

Description Cost

Additional Driver as per Table CSC

Additional Driver plus 1 Labourer as per Table CSC

Additional Driver plus 2 Labourers as per Table CSC

Supervisor as per Table CSC

Additional Vehicle as per Table CTC + CFC

Additional Agency Staff Driver

Additional Agency Staff Labourer

Additional External Hire 7,500kg Refuse Collector

Additional External Hire 26,000kg Refuse Collector

Additional External Hire 7,500kg Tipper

Additional External Hire 18,000kg Skiploader

Additional External Hire 32,000kg Skiploader Rear End

4

APPENDIX 6

Excess Commercial and Industrial Rates during first two Contract Years

Commercial Dry Recyclable Waste

Commercial Green Waste

Commercial Residual Waste

Commercial Segregated Waste - Card

Commercial Segregated Waste - Paper

Commercial Segregated Waste – Scrap Metal

Commercial Segregated Waste – Timber

Industrial Waste

5

APPENDIX 7

Forecast Commercial and Industrial Tonnage

Contract Year Commercial and Industrial

Tonnage

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

2018/19

2019/20

2020/21

2021/22

2022/23

2023/24

2024/25

2025/26

2026/27

2027/28

2028/29

2029/30

2030/31

2031/32

2032/33

6

Contract Year Commercial and Industrial

Tonnage

2033/34

2034/35

2035/36

2036/37

2037/38

2038/39

2039/40

7

Documents

Wakefield Waste Management PFI Project Schedule 4 Payment ... Management Project/8. Schedul… · 2.2 Unless otherwise provided, references in this Schedule 4 (Payment Mechanism)