Sale of surplus Road Planings price structure

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1 Sale of surplus Road Planings price structure Target prices (2009) Delivery Direct from road planing works From stockpile Price 6 / tonne + VAT (within 10 miles radius) 8 / tonne + VAT (within 10 miles radius) Loading trucks The process of loading a typical 20 tonne (capacity) truck is between 5 and 10 minutes including manoeuvring. Once under the road planer conveyor belt, the process is very fast indeed and most of the time is undoubtedly spent getting to and from the stockpile / disposal point. The impact on the actual time taken to load a waiting truck in the context of the variable depth of planing is small i.e. the difference between loading a waiting truck from a planing depth of 80mm is not significantly different to 120mm. Whilst it is more economically advantageous to use 20 tonne trucks, occasionally 10 tonne capacity trucks are utilised. DWO has 2 x 10 tonners on the fleet but no 20 tonners. If these existing DWO assets are not productively employed on other work it makes sense to utilise these on our planing works as we are already paying the overheads. There is a difference on the overall clearance, manoeuvrability and width of the 10 tonners compared to 20 tonners and the individual circumstances of the drop off point e.g. access restrictions must be taken into account if specifying DWO 10 tonners over hiring 20 tonners. Typical current charge (September 2009) for a 20 tonner is 35 to 40 / hour or around 300 / day including driver and fuel. Some hauliers charge minimum full day hire and some charge travelling time to and from the job. The cheapest haulage rate is based on geographical locations of the works and proximity to recycling / stockpile points, whether providing planings in lieu of haulage is part of the deal and the travelling time / basic charge rate. All of these factors are taken into account when determining the best value for money haulage / disposal solution for DCC. The timing of the works i.e. evening / night working can present specific challenges in securing the best value for money solution as options for recycling / stockpiling can become very restricted. We cannot tip into 1

2 Travel time some stockpiles as they are close to residential properties and would give rise to noise complaints and we cannot use many permitted private facilities as they too have planning and / or permit restrictions governing operational hours. It is worth noting that when servicing road planing works with trucks, one has to bear in mind that the travel time can be seriously affected by the traffic disruption created by the road works. The trucks will unavoidably be held up in the same traffic queues as the other traffic and this has to be built into the allowance for travel time and cost. Value of road planings From research locally and nationally, we are aware that road planings on the open market can command between 8 and 12 / tonne dependent upon whether they have been processed (crushed and screened to achieve uniform grading) or not and whether collected or if delivered, the travel distance and time. These variables similarly affect our ability to have uniform price structure and this is why the 6 and 8 prices are not absolutely fixed. DCC road planings supplied through this scheme are sold as seen and will not (at present) have undergone any processing such as crushing and screening to achieve a uniform grading. The price charged must be proportionate in the sense that it must not only take account of the fact that it is unprocessed but it is also competitive when compared to processed road planings or primary aggregates. Cornwall County Council who similarly supply road planings to third parties charge a current rate of 6 per tonne delivered for road planings matching charges by Dorset. Minimum orders The minimum load supplied is 20 tonnes. Disposal / recycling costs The inherent value of road planings has always been recognised and traditionally we have been able to secure at least a free tip or recognition of the value through hauliers servicing planing works offering reduced priced haulage to compensate for the perceived value. 2

3 Demand The sale of road planings does not therefore save on DCC disposal costs but it can save on haulage costs and potentially save on our primary material costs. Under the current economic downturn and reduction in building activity, there is generally less demand for road planings however it still provides a very useful and durable alternative for use as a sub base and will tend to be a consistently lowered priced when compared to primary aggregates. In times of economic downturn, realising potential savings is even more important and using road planings can provide an environmentally responsible and cost effective means of providing some aggregates. Environmental issues Using primary aggregates means digging primary materials from a quarry and then processing it through crushing, screening and washing plants, all consuming energy and natural resources. In recognition of this environmental impact Government introduced an aggregate tax (current rate 2.00 / tonne) and this cost is passed on to consumers of primary aggregate through prices charged. Road planings are produced as a consequence of road planing activity and cannot be avoided due to the structural instability of the road. In terms of performance, road planings still have binder and the aggregate which went into the surface in the first place would have had to have conformed to road building standards when laid. Using road planings instead of primary aggregates will therefore be better environmentally speaking and will save on aggregate tax and primary material cost. Legislative compliance DCC will complete necessary Environment Agency (EA) paragraph 19 exemption paperwork on your behalf. Up to 150 tonnes per 12 month period can be supplied to a third party provided that a simple form is completed and sent to the EA. This notification is free of charge. If more than 150 tonnes per 12 month period is supplied this is not a problem but there is a requirement to complete and return (with payment of 575 [@ Sept 2009]) a more detailed notification. This will be completed on your behalf by DWO. The more detailed exemption remains in place for 12 months and this is renewable annually at a reduced rate. The free or paid notification of an exemption to the EA has no bearing on the price per tonne charged for road planings by DWO; this is to 3

4 satisfy legal requirements in respect of handling waste products by the end user. Priority use on DCC schemes There are times when suitable DCC structural schemes require road planings in lieu of a base material e.g. cycleway and some footway schemes. If we predict that we will require road planings from our forward programme of works then DCC will stockpile road planings for this purpose and not supply to others. This is so that we can save on primary aggregate purchase costs ensuring not only the best value for money solution for DCC / local council taxpayers but also realise the environmental benefits. At present, there is little allowance for the use of recycled materials and products in DCC schemes as the case for some of them is unproven. Due to this risk they tend not to be regularly specified by the designer and highways client. This situation is evolving as we carry out local trials and specific tests and it is envisaged that recycled products and materials will become more mainstream in DCC highway schemes in future. Price of primary aggregates If DCC (or other organisations) purchase (in bulk) primary aggregates e.g. type 1 road sub base this will cost in the order of 13 delivered. DCC can use road planings in lieu of sub base thus saving on the environmental and financial cost of using primary aggregates. We need to take account of this potential value in determining the price structure for supply of surplus planings. Price review mechanism The supply price will be reviewed annually on 1 st April by the DWO Waste and Recycling Manager. The review will be based on any fluctuation in actual costs of producing and handling road planings. Marketing strategy DWO will publicise the availability of road planings generally through: Double handling costs a) Dorset Local Landowners Association b) National Farmers Union c) Local press advertising (Dorset Evening Echo, Bournemouth Echo, Western Gazette, Blackmoor Vale magazine and advertiser series (free press). 4

5 If we take road planings to a stockpile site and then have to load them to a waiting truck and haul them on the cost of handling increases as we are double handling. We have already made one trip to drop off the planings and then need to hire in a loading shovel to load another truck to make a separate journey. Fulfilling orders A database will be compiled of those third parties interested in acquiring road planings and maintained by the DWO Waste and Recycling Manager. Once requirements are matched with road planing activity in a particular area, the DWO Waste and Recycling Manager will contact the interested party and confirm a price and delivery details including tonnages and relevant EA paperwork. To make the activity as cost effective as possible both for DCC and the third party, delivery from stockpile will be the last resort and we will try to meet requirements direct form planing activity. In this way, the truck is already loaded up and ready to go. If we need to supply from stockpile then we will take a cluster approach, hiring in a JCB and transport and fulfilling orders on an area by area basis to maximise efficiency. David Blackburn 28 September

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