2. Introduction

2.1 Terms of reference

Cranleigh has been engaged by the Ministry for the Environment to prepare on an independent basis a business case in respect of the proposed 'Out and About' Recycling and Litter Initiative (our full terms of reference are set out in Appendix I).

The key issues that we have considered are as follows:

the commercial options available
market considerations
competitor analysis
economic imperatives
financial implications
funding considerations
operational considerations
legal and stakeholder considerations
governance arrangements
risk factors
concept design and construction considerations.

Cranleigh has identified key options and assessed the commercial viability of each; constructed a high level quantitative model and developed appropriate governance and implementation options. We considered the following the key industry drivers:

Site rental and costs associated with ongoing site maintenance.
Collection, which currently involves numerous small, private sector operators. They are low cost, low return operations and this brings with it associated financial and commercial risks.
Disposal rates. These are often now dictated by international trends and monitoring key movements in prices for materials, such as aluminium, glass and paper, will be important. In addition, the markets for other recyclables, such as plastics, which are now used for roading and other commercial applications, are growing.
Advertising. The market for advertising and the outdoor advertising sector within it.

2.2 Drivers for project

The drivers for this project are to, inter alia: promote recycling; reduce litter; reduce volumes of waste to landfill; meet stakeholder needs; satisfy advertising demand; identify site availability and cost; determine recyclables volumes and prices; and assess collection and operating costs.

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