Construction work continues despite £3.8bn legal battle

Leaders of the Greater Manchester Waste Disposal Authority said £630m worth of construction work will be unaffected by a legal challenge to the tender award for the £3.8bn PFI contract to dispose of the city’s rubbish.

Recycling and waste specialist Sita UK has launched legal action against the authority after losing out on the scheme to a Viridor/Laing consortium.

A damages claim has been lodged in the High Court alleging breach of procurement regulations during the protracted contract award.

Sita believes “significant changes” have occurred to the project since the appointment of the preferred bidder and the firm should have been invited to submit a revised bid alongside Viridor Laing's bid.

Sita also alleges that although the cost of the bid it submitted to the authority in 2007 was higher than Viridor Laing's bid, it subsequently ended up being cheaper, after Viridor Laing's bid rose 25% between 2007 and 2009.

The legal challenge has left officials at the authority bemused. Treasurer John Bland said: "We are disappointed and surprised that Sita UK has commenced legal action but we are confident that the contract was awarded in accordance with EU procurement rules."

The authority also insisted that the legal action would have no effect on construction work planned as part of the scheme where Costain has won nearly £400m of infrastructure work. Bland said: "This will have no impact on work going on on the ground."