Finding new firms to run Sheffield's waste services could take over a year, the city council has revealed.
Cabinet members agreed last week to rip up the 35-year contract with Veolia 19 years before it was due to end.
Citing a lack of flexibility and failure to deliver the required savings, councillors instead decided to look at shorter contracts and split the service into smaller parts.
But Veolia, which employs about 280 people in Sheffield, will continue to run the service for at least another 12 months.
A council spokesman said: “Following last week’s cabinet meeting, we now have approval to run a competitive re-procurement process for waste services in line with EU procurement rules, which we anticipate will take in excess of a year.”
The council said the procurement process would not affect the service residents received.
Cabinet member for the environment Bryan Lodge added: “We needed to find a best-value solution that ensures a quality waste service for Sheffield taxpayers, and this led us to the decision that was made.
“It is no secret that we are operating in very tough financial times and we have to do things differently.
“Our contract with Veolia, which was signed 16 years ago, is no longer meeting our needs and is no longer compatible with the tough financial landscape in which the Government is forcing us to operate.”
The council said it would consult with Veolia staff.
The company is responsible for collecting and disposing of waste, running household waste recycling centres, managing and operating the Energy Recovery Facility at Bernard Road and the district heating network, bulky item collections and the collection and disposal of abandoned vehicles.
These services are now likely to be tendered separately.
A Veolia spokesman said: “We are obviously disappointed by Sheffield Council’s decision to seek to re-tender for its waste services. We have had a successful partnership with the Council, to date this relationship has lasted for sixteen years.
“During this time we have delivered state of the art treatment infrastructure, operated the flagship district energy network and significantly increased recycling.
“From the start of our contract in 2001 we have been a major investor in Sheffield, outperforming our contractual objectives and achieving close to landmark 'zero waste to landfill', whilst generating direct financial benefits to the city and providing value for money to the Council.
“Over £3 million has been donated to community projects in the Sheffield area via the Veolia Environmental Trust.
“We will work with the council to understand their timescales and ensure adherence to the full contractual implications of this decision. We’ll continue to keep our staff fully informed of developments as the situation becomes clearer.”
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