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New £650m contract with Sandwell Council

Date: 09 Nov 2010

Serco Group plc (Serco), the international service company, is pleased to announce that it has signed a new contract valued at £650m over 25 years with Sandwell Metropolitan Borough Council (Sandwell) to deliver its new Waste Improvement Plan (WIP). The contract signature follows the announcement in August that Serco had been selected preferred bidder. Under the contract we will provide refuse collection, recycling, waste processing and disposal, and street cleaning services, including the construction of a new waste transfer station.

Our innovative approach to this contract, which commences on 15th November, will increase recycling rates to 60%, deliver cost savings of at least £30m and reduce carbon consumption across the vehicle fleet by 40%. The approach will help the Council meet its financial challenges and introduce operational improvements that respond to the needs and requirements of both Sandwell and its residents.

The introduction of a new seven days-a-week service over longer hours will improve street cleanliness. Weekly bin collections will be developed with the introduction of zonal operations where all services including recycling are co-ordinated by area, reducing the number of vehicle movements.

Initiatives such as the introduction of a weekly food waste collection will improve recycling rates from less than 40% to 60% by 2020. This will significantly reduce the amount of waste sent to landfill, help the Council to meet Government recycling targets, reduce costs such as landfill taxes and result in potential cost savings for the Council of £1.75m per year or £30m over the length of the contract.

Serco will also introduce hybrid diesel and electric vehicles, whose mechanical compaction and lift gear will be powered electrically, a first for a UK local authority. This, together with the introduction of route optimisation technology and engine management systems, will achieve an overall carbon reduction of 40% across the vehicle fleet during the term of this contract.
We have engaged with local community and third sector partners to implement a number of community support programmes. For example, an education programme will be provided for local schools to build awareness of environmental and sustainability issues amongst pupils. This includes providing a fully equipped Eco-bus fitted out with educational technology and activities.

Serco will also introduce a Recycling Improvement Fund, which will see the local community being incentivised and subsequently rewarded for increased recycling participation, with direct re-investment into local projects such as creation of community allotments and wildlife areas, or the refurbishment of parks and play areas.

Councillor Derek Rowley, Cabinet Member for Safer Neighbourhoods, welcoming the contract signature with Serco, said: "This partnership allows us to provide a first class service to the people of Sandwell. When fully operational, it will be among the very best in the country and I'm confident people across the borough will enjoy its benefits."

Christopher Hyman, Chief Executive of Serco Group plc, said: "Serco is delighted to have signed this important new contract with Sandwell and we look forward to delivering substantial improvements in the efficiency and quality of these important services for both the Council and local residents. This contract is our largest ever environmental services contract and represents a significant development for our environmental services business where we have a strong track record for delivery and innovation."


For further information please contact Serco:
Jill Sherratt, Head of Investor Relations T +44 (0) 208 334 4122
Dominic Cheetham, Director of Corporate Communications T +44 (0) 208 334 4334
Marcus De Ville, Head of Media Relations T +44 (0) 208 334 4388

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Last Updated: 09 Nov 2010