Power Play

01 February, 2008

With a construction, demolition and excavation waste processing capacity of over 1.6million tonnes of material a year, along with its own rail facility and barges, Powerday’s Willesden, North London site can lay claim to being the UK’s largest urban quarry. MQR visited the site and chatted to MD Mike Crossan about the aggregates market, his investment and where he goes from here.

There has been a range of indicators signalling the greater role waste is starting to play in the aggregates supply chain. But one of the most telling is the growing desire on the part of private investment to become major players in the waste arena.

Such was the lack of desire on the part of financial institutions as recently as 2003 that the Waste and Resources Action Programme (WRAP) launched a specialist investment vehicle called the Recycling Fund. It folded in 2006 with only two investments made.

Its failure was the result of the speed of private investment firms to adapt to change. In three years the market for waste had shifted. Now the money is flowing. Even Prime Minister Brown has announced a tripling of PFI funds available for UK waste operations over the next three years.

This change of mind on the part of private finance – as the Government ratchets up the pressure on sustainable construction and EU landfill fines creep ever closer – has helped fuel the growth of so-called urban quarries, the recycled CDEW suppliers seeking to replace the low – and increasingly high – quality end of the aggregates market.

With a price tag of £14million, measuring a thumping 40,469m2, and capable of processing 1.6million tonnes of material a year, Powerday’s low-quality end operation in Willesden, North London, is at the opposite end of the spectrum to the Sustainable Aggregates site in Bristol. In fact, it is the largest of its kind in the UK.

And like many sites starting up now it is the result of a large chunk of private investment, in this instance from the Allied Irish Bank. Only £562,000 came from grants. This was from London Remade. No money was secured through WRAP.

With London-based operations in Brixton, Brimsdown near Enfield and Neasden, Powerday has a total processing capacity of 2.2million tonnes a year, easily replacing a range of traditional quarries.

However, Powerday MD Mike Crossan is keen to build up to full capacity slowly. The newly opened Willesden site is currently processing 380,000tonnes a year and growing. Most new waste legislation is still settling down, he says. It is a matter of future-proofing yourself.

Crossan: “I am building up gradually. It is about educating people and that is a slow process. The whole recycling, sustainability and environmental way of doing business is still in its early days. It takes time for people to catch on,” he told MQR.

And when he says it takes time for people to catch on, he speaks from experience. Although the Willesden site opened last year – after two years in construction – he first looked at the land 14 years ago.

Crossan: “We bought a site at Park Royal in North West London and were looking to build a recycling centre. Planners said it was too near Central Middlesex hospital. So a guy at Park Royal Partnerships, Nick Owen, said he knew of a site at Willesden.

“We knew it was right as soon as we saw it. We were facing the introduction of the landfill tax and could see the way waste was going. Little did we know it would take us eight years to gain planning permission and it was all down to the state of the system,” he told MQR.

After he had secured a 56year lease from EWS railway he started to hit his head against walls trying to gain permission: “I like to think that the reason Mayor Ken Livingston has adopted a system of strategic planning is because he saw what we had to go through here,” he half-jokes.

A big problem was that the site is in Hammersmith and Fulham but the nearest residents are in Brent and Ealing. Ealing caused the most problem, he said, as campaigners picketed the grounds. Cross-borough politics were much in evidence.

But Crossan is sympathetic towards the residents: “I can see where they were coming from. They had us at the front and a freightliner depot at the back, which has no restrictions on time used,” he says.

And it was the same at the EWS site. While waiting for planning permission, Powerday sub-leased the land to Balfour Beatty. The east and west coast rail upgrade and plenty of maintenance work meant the firm was working weekends and bank holidays.

So to calm resident’s fears, Powerday promised time restrictions and ensured all processing would take place in sound-restricted buildings (see picture left). Crossan did all this with the residents in mind: “I don’t want to get in their bad books as it causes me grief,” he says.

The initial plan was to build the site in two phases. However, Balfour Beatty lost the rail maintenance contract and left the site. Crossan went to the planners to lift the two phase restriction so they could complete it in a single phase. This change alone took 11months.

However, a decade on and he finds himself holding the whip hand. After two years constructing the site Crossan wanted to add an office building. Hammersmith and Fulham visited on the Thursday, agreed the powers on the Friday evening and he had the go-ahead to build on the Monday morning.

“It is because we took the right route during construction,” he says. “We took time to ensure we did everything correctly and this is so important.” The site can even recycle the rainwater that falls on it.

In the current climate govenment looks favourably on waste operators who adopt a mindset such as Crossan’s. He has a resident friendly, high tonnage, well-managed, testing-vigilant recycling operation. He also has the benefit of access to green transport links: a canal one side of the site and a rail link the other.

Crossan: “It was the water and rail access that first drew our attention. Every site has limits on traffic movements in London. We can take 600,000tonnes by road and the rest has to come through rail or barge. Now we have this option it will make a huge difference. We can reach any project in London.

“For example, Crossrail will start in Paddington and we can service it through this facility. If they want 50-100 loads of inert a day we can say yes we can do it. At the moment some contractors are running to Romford and Heathrow to muck away. We can put 105 lorry loads on a train and it takes about 2hours to load. It is all about logistics,” he says.

It is also a matter of accountancy. Barges, for example, only cost between £60-£70,000 and you can write them down over 50years. His fleet of newly upgraded trucks can only be written down over five years. Also, you can fit six lorry loads into a barge and they can be unloaded in 22minutes.

A survey from Transport for London by Peter Brett Associates of 26miles of the Grand Union Canal that runs by the Powerday site highlighted 28 points at which recyclables can be picked up. These are something Crossan wishes to exploit.

However, he is finding that he needs to educate customers over the use of barges. There is a tendency to underutilise them, he says. A example of this is a current contract he has with MPG for plasterboard removal from a project at Kings Cross.

“Transport costs are transport costs and are not going to change, so you need to get the most out of each load. The first barge from MPG had 8tonnes in it. We advised them to buy a little shredder to process the board at site before going into the barge. So they did.

“The next barge had 22tonnes in it. They have now invested in a lot of shredders,” he says with a smile.

But there is a bigger picture in his focus on logistics. As well as offering contractors and firms easier routes for material disposal and supply, he is also offering to reduce costs further for clients by bringing the concept of just-in-time to aggregate delivery.

As well as recycled material Crossan also carries virgin type-one and 10mm shingle – the cross-borough complexity of road and other works hampers the use of recycled on certain jobs. The drivers enter the site, tip and then load up at the same site with the required material, saving fuel.

The size of the Powerday operation means that drivers can then wait until they are ready at the job site for them. This saves other unwanted costs. Crossan explains: “The fines drivers are getting thanks to cameras in general are huge.

“Some of the fines are for drivers looking at the A-Z trying to find their way to site while others are from drivers having to park up because the contractor wasn’t ready for the material. Here, they wait until they are called. This just-in-time system saves fuel and man-time as well as reducing the number of vehicles a company needs,” he says.

It may be many times larger, but the Powerday operation shares the desire of Sustainable Aggregates in MQR’s previous project focus to target a 100% recycling rate on material coming in.

And, like Holloway, Crossan also says that he has seen a boost in activity and interest in his materials over the past few months as the drive towards sustainable development grows.

His current end products are recycled concrete and asphalt – crushed to order – fines, soils, cardboard and wood. He also produces paper and plastic, which was recently tested and will become a refuse derived fuel product.

The soils bay has underfloor heating and soils are turned regularly to kill contaminants. He also has his eye on a soils washer to improve the product: “I already have the plans.

It takes up 20m x 40m and can process 200tph,” he says.

However, he doesn’t want to wash the clay and in London there is a lot of it. Some of the loads that come in are 80% clay. But Crossan is a man always looking to be one step ahead. So he has purchased a landfill with an inert licence – although when we visited he was remaining quiet in terms of location.

As Defra’s current consultation on inert waste points out, clays are classified as inert under soils and stones as long as they are not from contaminated sites. With landfill rates steeply climbing – including an £8 tax hike this April – it is an investment he could hardly turn down. It also helps him reach the 100% recycling target at Willesden.

“The plan is to take stuff out by train and build a total recycling facility on the landfill,” he says.

You often hear the term “total solutions”. It is widely overused. Often firms adopt the term because the competition does. Crossan doesn’t use the term once, but it is the first one that comes to mind when you view the site and hear his plans.

Whether in construction, utilities or any other sector creating aggregate-based arisings, firms know the ultimate target given them by government is zero waste.

As Crossan himself says: “Environmental departments pretty much run construction now. Waites, Laing O’Rourke, Redrow, Barratts; they all know they need zero waste and the only way they will be able to do it in London will be through here. Companies can segregate at source but there is no need.”

And to help firms meet zero waste targets he is seeking to have a fully automated waste tracking system in place this year (see plant box for more). “At the end of the job we can give our customers graphs to show the waste they brought to the site so they can reduce waste on site. This in turn feeds in to their contractors helping them reduce waste also,” he says.

And it is not just those creating arisings that interest him. He will also take waste from transfer stations. As he says “...the industry is built on relationships and it is growing up very quickly at the moment”. It certainly is!

Powerday: 0208 960 4646