Perth and Kinross Council has awarded a waste disposal contract worth up to £2 million to Lancashire organic disposal firm TEG Group.
The new two-year deal will see the firm treat between 20,000 and 25,000 tonnes of garden and food waste per year at its base near Glenfarg, and includes an option to extend for a further two-year period.
While TEG has dealt with the council’s green waste for several years, this is the first time it has been contracted to treat food waste on a standalone basis.
Though initial volumes will be small, the company hopes it can use its new anaerobic digestion plant, at Binn Farm, to develop a new revenue stream.
The £4.5m plant built by the special purpose vehicle TEG Biogas Perth, in partnership with London venture capitalist firm Albion Ventures and with financial support from Scottish Government agency Zero Waste Scotland was commissioned early last year.
It can handle up to 15,000 tonnes of food waste a year, and will eventually generate approximately 0.7MW of electricity and 0.2 MW of heat to be used on site at the Binn Eco Park development.
TEG sees considerable opportunities in replacing landfill as a means of disposal, and is particularly encouraged by both an £8 per tonne increase in landfill taxes and Scottish Government legislation to progressively introduce a complete ban on the landfill of organic waste in both the public and private sectors from 2014.
Chief executive Mick Fishwick said his firm was pleased to continue its involvement with the local authority, which would land the company revenues of between £1.8m and £2m over the course of the initial term of the contract.
“We have been working with Perth and Kinross Council for many years and we are delighted to have been awarded this new contract which will enable us to further strengthen our relationship with the council,” Mr Fishwick said.
“It is exciting that the contract includes food waste as a new waste stream and that waste will be converted into renewable power and fertiliser in our AD facility.”
Garden waste will be processed at an existing open-air window plant and co-mingled food and green waste will be treated at the firm’s In Vessel Composting plant.
AIM-listed TEG said its performance during the year to date had “continued to be very good”. It recently announced a similar deal with Nottingham City Council.
Results for the year to the end of December revealed revenues of £22.4m, marking growth of 25% on the previous period.
Pre-tax losses narrowed to £1.28m after reaching more than £8m during 2011.