Feasibility Study to Enable Participation as a Joint Venture partner in RFT Bids

 

Feasibility Studies to Provide a Green Light for Participating as a Joint Venture Partner in a Container Recycling Scheme

Jason Bresnehan spearheaded the financial and operational feasibility studies for Launceston City Mission to evaluate its potential role as a joint venture partner in two separate RFT bids for establishing recycled container collection depots in Northern Tasmania. This initiative was driven by the Tasmanian Government's introduction of the Container Refund Scheme Act 2022. Launceston City Mission collaborated with two multinational waste management companies bidding for the contract.

Under the Act, several recycled container collection depots, including City Mission, would operate under a Statewide Operator's management. These depots would act as collection agents and depot managers, collecting empty recycled containers and paying a fee per container to community members who dropped them off. City Mission would reimburse the community contributors and receive a fee from the Government for providing the collection outlet and sorting service.

The Statewide Operator, one of Australia's largest waste/recycling companies, would receive a fee for collecting and transporting containers from retail depots, such as the planned City Mission depots. They would then perform further sorting and processing as part of their regular kerbside recycling operations. One joint venture partner proposed using reverse vending machines, which automatically return funds to the container collector upon deposit at locations like supermarket car parks and other high-traffic areas.

Market data (volume estimates) from the Australian-based waste/recycling companies (potential Statewide Operators) varied significantly. Consequently, Jason was tasked with preparing two Feasibility Studies based on the revenue and operational costs for Potential Statewide Operator #1 and Potential Statewide Operator #2. These studies were for approval by the City Mission Board, depending on which national waste/recycling company was awarded the Statewide Operator status.

The Feasibility Studies were supported by Rough Cut Capacity Planning (RCCP), which considered warehouse infrastructure, traffic flow, and operator wages. They also included detailed Cash Flow Projections with numerous core assumptions and Internal Rate of Return (IRR) calculations for both studies.

The feasibility studies led to Launceston City Mission's approval to participate in the two Statewide Operators' bids in response to the Tasmanian Government's Request for Proposals.