919: Developer loses challenge to its own DCO
Today’s entry reports on the latest High Court judgment on a challenge to a Development Consent Order.
In an unusual case, a developer was granted a DCO but then challenged it, because it only consented one of the two main elements of the application.
The judgment answers these two questions:
- does a section 35 direction make a project (or part of one) a nationally significant infrastructure project (NSIP)?; and
- can an application be decided partly under section 104 and partly under section 105?
I think one and a half of the answers are wrongly decided, though, see below.
A company known as WTI/EFW Holdings between 2011 and March 2021, EFW Group between March and May 2021 and Enfinium since then launched a challenge to the grant of the Wheelabrator Kemsley K3 Generating Station Order 2021. Because it did so during the two-month window when it was EFW Group, the judgment is in that name. It can be found here.
The application had two distinct elements: an increase in the output of an existing energy from waste installation known as Wheelabrator Kemsley K3 from 49.9MW to 75MW (which didn’t involve any development) and the construction of a second installation known as Wheelabrator Kemsley North (WKN – not to be confused with alcopop WKD) which would generate 42MW. The latter was the subject of a section 35 direction issued on 27 June 2018.
The application was made on 11 September 2019. The application version of the DCO was called the Wheelabrator Kemsley K3 Generating Station and Wheelabrator Kemsley North Waste-to-Energy Facility Order. The single inspector decided that K3 should be decided under section 104 of the Planning Act 2008 and WKN should be decided under section 105, because the latter was below 50MW. He recommended that only K3 be approved, mainly because he considered the need case for WKN was not sufficiently made out and might draw waste from outside Kent to supply it, contrary to the waste hierarchy and local waste policy which prefer waste to be disposed of locally.
The Secretary of State disagreed with the basis for making the decision, deciding that the whole thing should be decided under section 104, but nevertheless reached the same conclusion as the inspector and granted K3 while refusing WKN. WKN was removed from the title of the DCO accordingly.
The 104/105 issue was important because deciding something under section 105 effectively gives more weight to local policies (although there is some elision of ‘local policies’ and the local impact report in paragraph 6.3 of the decision letter) and deciding it under section 104 gives more weight to the National Policy Statement(s) and their declaration of urgent need.
The applicant challenged the decision on the basis that the SoS was correct to decide it all under section 104, but did not properly reconsider the section 105-reliant parts of the inspector’s reasoning. In a strange reversal during the hearing, the SoS changed his mind and agreed that he should have decided WKN under section 105 after all, but that he would have reached the same conclusion (fair enough on that last point, because deciding it under section 104 would have made refusal less likely).
The judge concluded that a section 35 direction does not make a project an NSIP, saying at paragraph 62 of the judgment:
‘It is clear that the purpose of section 35 is not to make a project which is not and does not form part of an NSIP into an NSIP. Its purpose is more modest, namely to enable the defendant to bring within the scope of the 2008 decision-making framework projects which satisfy the requirements of section 35(2), and are of a particular type of infrastructure which either by themselves or when considered with other specified types of project are of national significance. They are then able to take advantage of the streamlined decision-making processes as well as the available exemptions from other consenting regimes.’
I am going to stick my neck out and disagree with that, for the following two reasons. First, the Secretary of State issues a section 35 direction only if he or she thinks that a project is of national significance. If the judge is right then an infrastructure project of national significance is not a nationally significant infrastructure project, which doesn’t make sense. Secondly, and this is not mentioned in the judgment, all but one of the decisions on DCO applications for projects that were brought into the regime via section 35 were decided under section 104. That is the Silvertown Tunnel, the Norwich Northern Distributor Road, the Lake Lothing Third Crossing and the Great Yarmouth Third Crossing. The exception was the Triton Knoll Electrical System DCO, which was decided under s105 because ‘there is not strictly an NPS that has effect in relation to development of this description’ (paragraph 3.2.5 of the Recommendation Report). True, the NPSs in question or the s35 directions clarify that the NPS should apply, but that doesn’t mean that a project with a s35 direction that doesn’t say so isn’t an NSIP. And even if it isn’t, I think the logic that it should therefore be decided under s105 is wrong.
I agree that an application could be decided partly under section 104 and partly under section 105, but not this one. The judge says at paragraph 58 that to do otherwise would be to enlarge the scope of the NPS to include a project to which it was not designed to apply [which] would clearly run counter to the overall statutory scheme.
I disagree again. It’s partly the same logic – the point of a s35 direction is to apply the statutory scheme to the project to which it relates. But further to that, if WKN is not an NSIP, then it is associated development, and the only NSIP in town is K3, so section 104 is the only decision-making section that applies. You can’t decide that because something is nearly an NSIP it gets decided under a different part of the Planning Act. For example many DCO applications of all types include road enhancements that are too small to be NSIPs in their own right, but those elements don’t get decided under section 105 just because they would be NSIPs if they were big enough. There isn’t a limbo category of neither an NSIP nor associated development.
The 104/105 point is only half wrong, though, because I agree that there are circumstances where an application could be decided partly under section 104 and partly under section 105. Those would be when it contained two NSIPs of different types and one had an NPS in place and the other didn’t, e.g. a power plant and a reservoir. But that is not the situation here – it’s the opposite, on the logic of the judgment: it’s not an NSIP and there is an NPS in place.
Despite what I might have to say about it, though, as it is in a High Court judgment it is for now the official interpretation of the effect of section 35. I wonder if the claimant will appeal.