Nevin Associates

Mike is Director of Nevin Associates Ld, and writes and publishes an annual Financial Review of the UK Waste Management Industry, which is widely regarded as an authoritative source of information and analysis on the financial position and prospects for the sector.

Mike graduated with a First Class Honours degree in Philosophy, Politics and Economics from Oxford University, and also gained an MA (Econ) in Economics and Econometrics with distinction from the University of Manchester. He is a Fellow of the Chartered Association of Certified Accountants of England and Wales (FCCA). He worked as a Management Consultant with Deloitte & Touche / Touche Ross Management Consultants in Edinburgh and London (1990-98), Financial and Economic Manager of the London Docklands Development Corporation (1986-90), Loan officer with the European Investment Bank, Luxembourg (1982-86), Financial Analyst with the Commonwealth Development Corporation, London (1979-82) and Economist with the Government of St. Lucia, West Indies (1977-79).

He served a 14-month secondment with the Scottish Office’s Private Finance Unit in 1996/97, when he worked on establishing a bipartisan framework for the financing of Public / Private Partnerships in Scotland. After completing the secondment, he set up Caledonian Economics Ltd, which under his leadership grew to become a major force in the Scottish consulting market. In particular, drawing on his experience of the EU Landfill Directive and PPP policy, he assisted a number of Scottish local authorities in developing Business Cases to underpin their strategies for sustainable waste management. Among the authorities for which he has acted are (in alphabetical order) Argyll & Bute, The City of Edinburgh, Highland, Midlothian, Perth & Kinross, Scottish Borders and West Lothian.

He was the lead financial advisor to Dumfries & Galloway Council in procuring their successful integrated waste management partnership, which reached financial close in November 2004 with Shanks Waste Services (SWS) as the selected partner. His services included the development of the Council’s financial model for the project, the development of the payment mechanism, assessment of the value for money offered by the three tenders submitted, and preparation of a Full Business Case to secure central government funding support towards the costs of the service payments.

He acted for the Government of Gibraltar in assessing the costs of procuring an EfW Plant either directly or via a PPP, compared to the alternative of disposing residual waste to a landfill site in Spain. He also advised arc21, a consortium of 11 Local Authorities in Northern Ireland, on the procurement of their waste facilities. He prepared the Evaluation Framework and Financial Bid Model for arc21, which were completed by all bidders on a standardised basis, with some bidders using it as their principal financial planning tool to mobilise funding for their projects. In 2006, he developed a standard financial model for Defra to enable them to appraise bids submitted to them for PFI credits. The model is used by Defra to independently cost bids submitted by English local authorities, to confirm that the amounts being requested were reasonable in relation to the technological solution proposed.

As Managing Director and 80% shareholder in Caledonian Economics until July 2007, he led the firm through a period of remarkable growth. During five years between 2002 and 2007, the firm’s turnover and profitability more than tripled, and with this growth came an increasing responsibility for day-to-day practice management and financial control. These administrative responsibilities left less time for the mission which inspired him to set up Caledonian Economics – namely, to provide a bespoke, high-quality advisory service to his clients. Accordingly, on July 31st 2007, he sold his interest in the firm to the other directors, and is now working again as an independent consultant through Nevin Associates Ltd, to provide strategic financial and economic advice to selected clients.

His professional interest in environmental economics began in the early 1990s while working with Touche Ross Management Consultants, when he worked with a range of clients, including:

• the UK Department of Trade and Industry, for which he prepared a study of the role that technology transfer to developing countries could play in assisting with the reduction of greenhouse gas emissions and adapting to global warming. Over 1,000 copies of this study, entitled Global Climate Change : The Role of Technology Transfer, were circulated to participants to the United Nations Conference on Environment and Development held in Rio-de-Janiero in 1992, and we understand from participants formed a key document in the conclusion of a convention on global warming;

• for DG XI of the European Commission, Mike led the cost-benefit analysis of the proposed Council Directive on the landfill of waste in 1993/94, which involved a detailed evaluation of the Directive’s economic impact on landfill operators and users in the member states of the European Union, and formed a key input to negotiations on the Directive leading to its approval by the Council of Ministers in June 1994;

• for the UK Environment Agency, he undertook a review of the appropriate methods of financial provisioning for landfill closure and aftercare, as an input to the debate between the waste industry and the regulator on this issue;

• for the European Environment Agency, he assisted in the development of an economic methodology to assess the costs and benefits of abatement measures to reduce air pollution in Europe, including defining an appropriate discount rate for environmental cost-benefit analyses;

• for DG III and DG XI of the European Commission, he acted as the Project Manager of a leading edge study of the cost-effectiveness of different measures to reduce pollutant emissions from passenger cars and heavy-duty vehicles. The study, which was commissioned within the framework of the EC’s Auto/Oil programme, provided policy makers with an objective assessment of possible measures that could be adopted within the road transport sector to achieve higher air quality standards, and its results fed into new Directives on automotive emissions and fuel quality which now apply throughout the European Union.

Mike left Deloitte & Touche to found Caledonian Economics, which developed specialist expertise in the financing and economics of the UK waste management industry. Among the clients Mike has advised on waste management issues are:

 Defra / Hyder / the six Cheshire District Councils.
In association with Hyder, Mike advised the six Cheshire district councils in 2007 in a Defra-funded study on the appropriate governance of procurement arrangements to enable the six districts to jointly procure waste collection services. The assignment developed a joint procurement model to enable the six Cheshire districts to secure scale economies and efficiencies by working together to jointly award collection and recycling contracts.
 Arc 21, Northern Ireland
Mike advised a consortium of 11 Local Authorities in Northern Ireland on the procurement of their waste facilities. Tenders for a Materials Recycling Facility (MRF) and composting plant were submitted in September 2004 and a Preferred Bidder, Bryson House, was selected in December 2004. The MRF has been built and became operational in September 2005 – so the entire period from the initial options appraisal through to commissioning took approximately 18 months, a significantly quicker timescale than is achievable for integrated PPP tenders.

Mike prepared the Evaluation Bid Framework and Financial Bid Model for arc21, which were completed by all bidders on a standardised basis, with some bidders using it as their principal financial planning tool to mobilise funding for the project.

Mike advised Arc21 on their evaluation of tenders for the treatment of organic waste and a separate contract to meet their relevant authorities’ landfill requirements. Arc21 also issued separate tenders for transfer stations, CA sites, an anaerobic digestion plant and a thermal recovery plant, with the overall programme managed by Arc21 on a portfolio basis.

 Defra
In early 2006, working with Jacobs Babtie who provided technical inputs, Mike prepared a standard financial model to help Defra appraise bids submitted to them for PFI credits to support waste treatment projects. The model is used by Defra to enable the Department to independently check the bids submitted by local authorities, and confirm that the amounts being requested were reasonable in relation to the technological solution proposed.
 Dumfries and Galloway Council
Mike advised Dumfries & Galloway Council on the procurement of an integrated waste management service via a public/private partnership contract through to financial close. The contract reached financial close in November 2004 with Shanks Waste Services (SWS). The service offered by SWS will achieve diversion rates from landfill in excess of the levels laid down in the National Waste Strategy and EU Landfill Directive, by a combination of composting in the west of the area in Stranraer, and the development of an Ecodecco plant producing refuse-derived fuel (RDF) near Dumfries, serving the east of the area.

His services included the development of the Council’s financial model for the project, comprising the Public Sector Comparator and Shadow Bid model, the development of the payment mechanism for the services delivered, assessment of the value for money and affordability of the three tenders submitted, and preparation of a Full Business Case to secure central government funding support towards the costs of the service payments.
 City of Edinburgh Council
Mike worked with the City of Edinburgh Council in preparing an Outline Business Case for the implementation of an integrated waste management partnership serving Scotland’s capital, which would incorporate the collection, treatment and disposal of municipal solid waste in a way that meets the objectives of the National Waste Strategy in diverting waste from landfill.

 Government of Gibraltar
Mike acted for the Government of Gibraltar in assessing the costs and NPV of procuring an EfW and sewage treatment plant directly, via a PPP, or alternatively disposing residual waste to treatment facilities in Spain. The assignment, which was completed in early 2006, involved a detailed financial assessment of the different options, to inform government policies on the most cost-effective method for meeting their solid waste and waste water treatment requirements.
 Perth & Kinross Council
Mike advised the Council on potential procurement options to secure three waste treatment facilities – an EFW Plant, a MRF and a composting plant – located in Perth & Kinross to serve the Tayside area. The conclusion of our assessment was that Perth & Kinross’s waste treatment requirements would best be met by separate contracts let under the Restricted Procedure – for organics (green garden waste), dry recyclates and residual waste respectively – let under the Restricted Procedure, as a more efficient and cost-effective route than either the Negotiated Procedure or Competitive Dialogue.

 Midlothian Council
Mike assisted the Council in preparing an Outline Business Case (OBC) for their proposed waste management partnership to treat and dispose of municipal waste in a sustainable manner meeting the requirements of the Area Waste Plan and National Waste Strategy. On the basis of our OBC, the Council secured support in principle for annual revenue support of £3.1 million for the next 25 years towards the costs of the partnership in 2002.
 West Lothian Council
Mike worked with West Lothian Council in preparing an Outline Business Case for the implementation of a waste treatment plant likely to be located at Caputhall, Livingston, with a minimum design capacity of 100 kpta, and potential to accept up to 200 ktpta of waste per annum. We prepared a financial model and risk assessment for the Reference Project, and advised on value for money, affordability and the procurement process. We have also recently completed a survey of potential funders for the project to inform the Council’s consideration of procurement options.
 Highland Council
Mike worked with the Council to procure a waste management partnership to treat and dispose of municipal waste in a sustainable manner meeting the requirements of the Area Waste Plan and National Waste Strategy. Bidders submitted initial tenders, and a shortlist of two bidders (Shanks and a consortium led by Cyclerval) was selected. The tender process was subsequently halted pending the completion of the Area Waste Plan.

His services included the development of the Council’s financial model and payment mechanism, assessment of the value for money and affordability of the three tenders submitted, and preparation of a draft Business Case to secure central government funding support towards the costs of the service payments.
 Bedmax Biofuels
Mike assisted Bedmax, a private company located in Northumberland, to undertake a financial assessment and business case of different options to develop a biofuels plant, using waste wood generated by their own existing horse bedding operation and externally sourced to manufacture wood pellets. The first phase of the project is operating profitably.

Since 2001, Mike has also advised NoSWA on its Wastewater utilisation PFI, and Midlothian Council, City of Edinburgh Council, Highland Council and Argyll & Bute Council on the development of their Waste PPP projects.

His publications include “Beyond Compliance: Measuring the Environmental Challenge for the Oil Industry”, Petroleum Accounting and Financial Management Journal, Texas, USA, Vol 14, No 2, Summer 1995; and “Least-cost strategies to cut road transport emissions: the European experience”, Presentation to the World Congress on Air Pollution in Developing Countries, San Jose, Costa Rica, October 1996. He is a regular contributor to Waste Management magazine on financial issues affecting the UK waste management industry.

The location of the assignments on which he has advised is shown on the map below.