The Invercargill City Council’s rescoped 18-month recycling contract with Southland disAbility Enterprises (SdE) has not been signed, despite the new arrangements commencing on July 1, 2020.

However, Southland disAbility Enterprises chairman Stephen O’Connor said this week there was nothing sinister about the unsigned contract because the parties had “an extremely positive relationship’’ and were working under heads of agreement reached before July 1.

Southland disAbility Enterprises employs about 100 people to hand-process recyclable materials collected from household bins. The sorted materials are baled and shipped to various parts of the world.

Before July, the recycling contract was held with WasteNet, a consortium established by three district councils serving Invercargill, Southland and Gore.

Over a nine-year term, the three WasteNet councils paid Southland disAbility Enterprises a total of $10,585,319 to process recycling.

Under a revenue-share agreement, the councils received $611,874 in revenue from the sale of recyclables.

Mr O’Connor said lawyers were still tidying up the wording of the new contract and SdE expected it would be signed “very soon”.

Both the Invercargill City Council and Mr O’Connor have declined to say how much the contract is worth. 

Mr O’Connor said the information would be available in SdE’s end of year financial statements. Before then, the information had to come from the Invercargill City Council.

The Invercargill City Council’s interim group manager Jane Parfitt has declined to release the information, citing commercial sensitivity under section 7 of the Local Government Meetings and Official Information Act.

Once the contract had been signed, the information would be released, along with minutes from a public excluded session of the Infrastructural Services Committee meeting, providing clarity on how the contract would be funded and why the new contract could not be compared with the former WasteNet contract, Ms Parfitt said.

Southland disAbility Enterprises received 3040 tonnes of recycling from Invercargill alone, during 2019-20. PHOTO: Southland disAbility Enterprises

Last year, the Invercargill City Council paid $1 million to send about 3040 tonnes of recycling materials to SdE to be processed.

Ms Parfitt said due to Covid-19 closures, there were 400 fewer tonnes than average. She has estimated a similar number of tonnes could be recycled in 2020-21 year.

The cost per tonne was “difficult to determine accurately, given that was not the way our share was calculated [by Wastenet],’’ Ms Parfitt said.

“Included in that $1 million was variations to the contract for matters such as markets closing or changing or rising contamination costs,’’ she said.

The Southland District Council has a sub-contract with the Invercargill council to process recyclables through SdE for the next 18 months. 

It is worth $48,000 per month [totalling $864,000 over 18 months].

The Southland District Council sent about 2000 tonnes of recycling material to SdE in 2019-20, which was “slightly down’’ on average, due to Covid. It’s share of the WasteNet contract was $615,000.

That amount included variations to send material to landfill, such as lower grade plastics and mixed paper, which no longer had available markets, Southland District Council communications officer Chris Chilton said.

The Gore District Council stopped using SdE’s services at the end of June and now sends most recyclable materials to the regional landfill.

Gore infrastructure general manager Ramesh Sharma said the council sent 800 tonnes to SdE last year, with its share of the WasteNet contract amounting to $402,000 (including transportation), or about $500 per tonne.

Mr O’Connor said it had been “pretty much business as usual” for the SdE team since the Wastenet contract ended in June.

“The only difference from 30 June to 1 July was that the recycling from Gore stopped being delivered. Other than that, nothing else changed, because Southland District Council has an arrangement and agreement with the Invercargill City Council... the only difference is we deal with the council directly rather than WasteNet,” Mr O’Connor said.

The social good component of the SdE contract has been conservatively valued at $4 million, according to an SdE report considered by the Invercargill City Council.

“We are encouraged and very grateful to the people who have supported us, the wider public and the councillors that have supported us and now the relationship we have with the ICC is fantastic and we value that,” Mr O’Connor said.

He was “very, very comfortable” with the initial 18-month term.

The term allowed the Invercargill City Council to complete a review of its Waste Minimisation Plan in the next 12 months. It also gave SdE the ability to have input into the review and share its future plans for downstream processing of recyclables, he said.

“I have no qualms about that. I can’t see any barriers that would preclude us from having a longer-term arrangement going forward, though that is up to council,’’ he said.