The following article was originally published on the UTILITYWEEK
The inflexibility of the IPC regime puts at risk much-needed utility projects. John Qualtrough calls for urgent amendments to be made to the Planning Act.
The Infrastructure Planning Commission (IPC) recently refused to accept proposed amendments to an application for a Nationally Significant Infrastructure Project (NSIP). This demonstrates that promoters of NSIPs must grapple with securing a Development Consent Order (DCO) against a strict statutory and regulatory framework, which allows little or no margin to make changes once a project has been submitted.
Promoters will be seriously concerned about this decision. It emphasises the irreconcilable conflict between the legal need for "project freeze" at the point of the submission of an application in accordance with the requirements of the Planning Act 2008, and the practical realities of project life - namely, that schemes are constantly evolving and promoters need the flexibility to make changes.
The case in question started in December 2010 when Covanta Brig y Cwm submitted an application to the IPC for a DCO for an ¬energy-from-waste facility at Cwmbargoed, Merthyr Tydfil. The facility comprises a main building which is 50 metres at its highest point, and a stack 115 metres high. It will be capable of generating 77MW of electricity.
During the examination process, Covanta announced it was proposing to make changes to its scheme. It wanted to excavate less material, which would reduce the number of lorry movements carrying away spoil from the excavations. However, a consequence was that the ground level on which the main building would sit would be 3 metres higher, so the facility would appear 3 metres higher in the landscape.
The Planning Act 2008 provides that regulations may set out the procedure to be followed where the IPC proposes to make a DCO in terms that are materially different from those proposed in the application. However, no such regulations have yet been made, other than in the limited case where an amendment concerns additional land that is to be compulsorily purchased.
The IPC refused to allow Covanta to amend its application, giving two reasons. First, the engineering operations from the proposed amendments were so substantially different from those in the application (and the environmental effects of the changes so significant) that they could not reasonably be treated as part of the original application. If the IPC were to grant a DCO, the proposed development would be substantially different to that proposed in the application. The application had already been accepted, and an amendment of this nature was not permitted under the Act.
Second, the IPC considered and applied a well known planning case (Bernard Wheatcroft). This established that an application may be amended if all those who might be affected by the change are given an opportunity to make representations (and conversely, an application cannot be amended if those who might be affected are not given the opportunity to comment).
There were difficulties here for Covanta. At the formal pre-application consultation stage, third parties did not have the opportunity to comment on the changes, since they were not available. Also, once an application has been made (and the ¬period for objections and representations has expired) there is a closed group of "interested parties", which cannot be extended.
On one view, the decision might be considered harsh because the overall effect of the changes may have been beneficial. While they would have raised the height of the building slightly, they would have reduced the amount of spoil removed from the site and going to landfill, and also the volume of construction traffic. However, the IPC is not concerned with making such a judgment. The purpose of the rule is deliberate, and designed to discourage applicants from submitting incomplete applications in the knowledge that they can amend them at a later date.
The IPC's decision left Covanta with two choices. It could either withdraw its application and recommence the process with a revised set of proposals. This would entail starting again at the pre-consultation stage, adding considerably to the timescale and costs of the project - clearly not a very attractive option. The alternative was to press on with its original scheme as submitted. Not surprisingly, Covanta decided to press on with its original scheme, stating that it considers this to be robust.
So what are the consequences for promoters of utility infrastructure projects? The Covanta decision was concerned with amendments that were considered to be significant or substantial. If a promoter is making amendments that do not cross this threshold, then the constraints of the decision will not apply.
Apart from this limited exception, the Covanta decision raises a number of real and practical issues and concerns.
First, the decision demonstrates the importance of detailed work on the development and design of a project and the need for the promoter, and each member of its professional team, to sign off on the project immediately prior to the submission of the application. This is because from this point in time, the scheme enters a state of what might be called "project freeze" when the scheme will become largely "unamendable".
Second, the Covanta decision is likely to slow down (even further) the rate of submission of applications to the IPC, as promoters nervously ask themselves at the point of application whether everyone is fully satisfied with the key components of the project (and whether there is anything which, in the future, they might want to change).
Third, even the most well prepared application is potentially at risk. This is because there will often be unforeseen issues that arise during the examination process which no amount of pre-application preparation and consultation may uncover - issues that may be of benefit to all parties. Further, after the submission of an application, promoters must also be able to react to representations that are received, and where applicable to amend their proposals accordingly. At the moment, this is not permissible to any great extent.
The reality of project life is that schemes are constantly evolving and promoters need the flexibility to make changes. There is an urgent need for the government to address this issue and relax the existing inflexible rules. This can be achieved through regulations (as the Planning Act contemplates) to allow wider changes to be made to applications, subject to appropriate safeguards of notification and consultation; and, by necessary changes to the Act itself, through amendments to the Localism Bill, which is now in Parliament. It is important for the industry that this matter is resolved quickly and decisively.
The original version of this article on UTILITYWEEK can be found here: http://www.utilityweek.co.uk/news/news_story.asp?id=195865&title=Is+the+IPC+freezing+out+utility+developments%3F
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