TEG.L Regulatory News (TEG)

9 Jan 2008 10:00

TEG Group (The) PLC09 January 2008 Immediate release 9 January 2008 The TEG GROUP PLC (TEG) ("TEG" or "the Company") Greater Manchester PFI Update TEG Secures Order, Work on TEG Projects Commences Further to the progress reported in November by Greater Manchester WasteDisposal Authority ("GMWDA") towards a financial close for its PFI contract, anAdvanced Works Order has been agreed between the Authority and preferred bidderViridor-Laing. The TEG Group PLC, the AIM-listed cutting edge green technologycompany, which converts organic wastes into natural organic fertiliser, confirmsit has secured a corresponding Advanced Works Order ("the Order") from itscustomer Costain, the company retained by the Viridor-Laing consortium to managethe construction projects for the PFI Contract. The purpose of the Order is to allow TEG to undertake the detailed design worknecessary for the TEG Silo Cage plants to be constructed under the PFI contract,prior to the procurement phase of the installation projects. The Order has beenplaced now as part of a commercial contract process to prevent further delays tothe installation programmes. Work will now proceed to schedule in advance ofFinancial Close, which is projected to be in March 2008, as announced by TEG inNovember 2007. The Order is for £525,000 and covers work already completed by TEG in December2007 together with work to be undertaken in the first quarter of 2008. The Ordercovers the detailed design work for the plants to be constructed by TEG and siteconstruction of the first plant is scheduled to commence in April 2008. The Order will form part of the PFI contract to be awarded in March 2008 underthe Financial Close process. TEG expects the overall value of that contract tobe approximately £35m and does not anticipate any change to its scope of supply. Commenting for TEG, Chief Executive Mick Fishwick said: "The conclusion of the Advanced Works Order is a very significant step forwardin the development of the Greater Manchester PFI contracts and it allows us toproceed to the revised schedule. " "It shows the commitment all parties have in ensuring the PFI process iscompleted and in ensuring there is no undue delay in bringing key facilities online in time to meet GMWDA's recycling obligations." ENDS Contact: The TEG Group Plc Tel: 01772 314100 Michael Fishwick, Chief Executive Adventis Financial PR Tel: 020 7034 4758 Tarquin Edwards 07879 458 364 Canaccord Adams (Nomad) Tel : 020 7050 6742 Chris Bowman Editor's Notes: Greater Manchester Waste PFI Contract On 29 January 2007, TEG announced that it is a principal sub-contractor to theViridor-Laing consortium that has been awarded preferred bidder status for theGreater Manchester Waste PFI contract. TEG is the exclusive supplier of InVessel Composting ("IVC") technology to the consortium and following financialclosure, TEG will receive an order to supply all the IVC capacity in the GreaterManchester region. TEG is expected to build four plants as part of the consortium, over the periodfrom 2007 to 2011 with a combined capacity of 175,000 tonnes per annum,producing 125,000 tonnes of compost product per annum. The plants will allprocess green waste and kitchen waste collected from households in the GreaterManchester region. TEG TEG provides an in-vessel composting technology, which is one of the fewapproved technologies capable of treating animal by-product (ABP) waste. Planteconomics are predominantly driven by the gate fees charged, rather than thevalue of the end product (compost). The TEG process is an economic alternativeto landfill. The Silo Cage system, one of the few technologies in Europe capable of treatingthis waste, is a natural process producing compost as an end product, used as anexcellent soil conditioner that fertilises, retains moisture, provides structureand reduces the incidence of plant disease. TEG's Silo-Cages are housed inself-contained buildings, are not unsightly and are environmentally friendly. Customers include local authorities, waste management companies, foodprocessors, farmers and landowners. The Company's expanding market is driven byincreasingly stringent EU and UK legislation regulating the treatment anddisposal of organic waste. Statutory targets for the diversion of waste fromlandfill increase annually through to 2020, increasing TEG's market opportunityyear on year. The Waste Resource Action Programme estimates that 450 compostingplants will be needed by 2020 to satisfy local authority requirements alone, andthere is increasing demand from the private sector driven by ABP legislation. NOFCO is a marketing company specialising in the development of end markets forcompost products, an important aspect of all plant developments and key to localauthority development. The company has an expertise in the development ofagricultural and horticultural markets and this capability is to be provided tocustomers to enhance TEG's overall service offering. This information is provided by RNS The company news service from the London Stock Exchange