JOBS could be on the line as a County Durham waste company prepares to be wound down.
The 60 staff at Premier Waste Management Limited have been told the company will cease trading at the end of May.
Last night, they raised concerns about the future as it was revealed the company’s pension fund is owed in the region of £12.5m.
GMB shop steward Terry Cox, who has worked for the company for 15 years, said: “Morale is at rock bottom. All the lads are asking about their pensions and whether they are going to be paid month to month.
“They have mortgages and bills to pay. Some have been here 30 years or more.”
Premier Waste, based at Aykley Heads in Durham city, runs waste transfer and household waste recycling sites for Durham County Council. But the council, which is the firm’s majority shareholder, has appointed new operators from June 1.
Professional services firm KPMG yesterday confirmed proposals for Premier Waste and parent company Durham County Waste Management Company Limited to enter into Company Voluntary Arrangements (CVAs).
It means it will continue to trade as usual until the end of the council contract, but will then be wound down.
Weardale councillor John Shuttleworth said Durham taxpayers could end up picking up the pieces of the firm’s demise as the council is also one of the firm’s creditors.
“They must owe millions,” he said last night. “It all goes back to the same thing; if you don’t have the right people doing the right jobs, you are going to have problems.”
Mark Firmin, KPMG’s regional head of restructuring, said: “The proposed CVAs are a tool for achieving an orderly wind down of the companies upon the termination of their key contract.
“They are intended to allow the directors to continue to run the business and generate profit for the benefit of the creditors.
“It is anticipated that the CVAs should enable a much smoother transfer of services back to the council or new operators, than would otherwise have been envisaged under an immediate liquidation scenario.”
It is understood none of the 60 staff have yet entered into redundancy negotiations and it is hoped many might be found employment with other providers. KPMG said the Pension Protection Fund will step in to cover the pensions shortfall.
Don McLure, Durham County Council’s corporate director for resources, said: “The council is supportive of the decision by the board of Premier Waste to move towards a CVA, which will deliver a good outcome for the company’s creditors.
“As a major creditor ourselves, we will now take some time to look at the details of the company’s proposal.
“At the moment there will be no changes to the services the company is contracted to provide to the council and residents. These include the disposal of non recyclable waste, waste transfer stations and Household Waste Recycling Centres.
“These services have already been subject to a new procurement exercise and new contracts will be put in place from June 1. I would like to reassure residents the council will continue to work with the company to deliver the best possible outcome with no impact on their services.”
In 2011, Premier Waste’s commercial collection operation was sold to H W Martin for a reported £8m.