The contract held by Southland disAbility Enterprises (SdE) to sort Southland’s recycling will end in three weeks, despite the Invercargill City Council last night rejecting a recommendation to appoint a new provider.

Southland District Mayor Gary Tong and Gore District Mayor Tracy Hicks said in a statement released this afternoon that both Gore and Southland councils had voted unanimously in favour of the new provider at separate meetings earlier this week, and they now have serious concerns about the tender process.

"This has been seen as a victory by SdE supporters. However, it means the tender process remains live and will be referred back to WasteNet for further discussion," the mayor said.

The mayors said that WasteNet had offered to roll over SdE's present service on the same terms and conditions for another 12 months to allow for a transition period but SdE rebuffed the offer and negotiations were still continuing between the two organisations.

“WasteNet has worked closely with SdE over the eight years of the contract and has tried very hard to roll it over last year. We negotiated with the management of SdE for more than six months, but they wanted more money for less production,” the mayors said. 

The statement explained SdE had asked for an extra $700,000 above its contract of $1.13 million annually to see it through to the end of 2019.

"Negotiations were stalled while WasteNet offered a loan and financial expertise to assist. While WasteNet never got clarity on SdE’s finances, we did advance a total of $380,000 in monthly payments which would be taken off the exit payment should the contract not be renewed," the mayors said.

Further negotiations failed to result in an outcome after "SdE management would not budge on its demands" the mayors said, before WasteNet decided to open the contract up to tender in November last year.

The mayors also revealed this afternoon that two proposals were received with an $11 million difference in price between the two over the 16-year contract,

An evaluation team made up of staff from each council and an independent expert, with a lawyer and probity auditor advising it, evaluated both tenders on both non-price criteria and then price.

According to the statement, the preferred tenderer’s proposal included a new automated material recovery facility, to be built in Invercargill. The use of automated equipment would have provided a safe working environment for employees, reducing health and safety risks created by the current manual sorting process.

Mayor Hicks and Mayor Tong said they feel for the staff at SdE who have already been put through a lot of stress and angst by senior management leaking details of the tender process last month.

During both Gore and Southland meetings earlier this week, the mayors said that councillors agreed to work together with social agencies to look at ways to support the SdE workers should they be displaced through the next 12 months.

“It was a tough decision but Southland District and Gore District Councils were confident in the advice they were getting from WasteNet on all aspects of the process to date,” Mayor Hicks and Mayor Tong said.

In the interests of being as transparent as possible, the two councils want to release all documents relating to this issue. They are reviewing what can be made public. 

The councils have not been able to make any comment until now because of the need to be fair to all parties involved; and meet the requirements councils are expected to follow in a request for proposal process.