A legal challenge by North Yorkshire County Council and York City Council over Defra’s decision to withdraw £65m private finance initiative (PFI) credits for Allerton Waste Recovery Park has been dropped, after the councils said a judicial review would not be in the public interest.
Defra announced it was no longer intending to authorise PFI credits to pay for the £1.4bn waste recovery plant in February last year, withdrawing £65m from the plan.
Defra said the reason for pulling the funding was because the scheme was no longer needed for the UK to meet EU waste targets.
If the scheme does not go ahead the councils could be liable for a termination payment to contractors AmeyCespa of up to £5m.
David Bowe, of North Yorkshire County Council, said the councils accepted a judicial review of the removal of PFI money would not be in the public interest.
“We worked closely with Defra for many years on this project and feel very disappointed by the way they have conducted themselves but we now have to accept that the argument is not worth pursuing,” Bowe said.
A Defra spokesperson said “We believe our decision was entirely lawful and in the interest of taxpayers, we are pleased North Yorkshire Council has withdrawn its claim.”