CONSERVATIVES in Derby, who are poised to sign a controversial waste deal committing the authority to potentially costly clauses, admit lessons need to be learned from the contract process.

The leader of Derby City Council, Harvey Jennings, said the contract between Derbyshire County Council, the city council and Resource Recovery Solutions (RRS), to deal with Derbyshire's waste for 27 years, is "ambiguous" in certain areas.

And that could leave Derby City Council open to challenges and compensation payments.

But Mr Jennings said that failing to finalise the contract with RRS now could end up costing taxpayers millions of pounds.

"If we had been in control we would have probably done things differently and may not have entered into a contract with the county and RRS," he said.

"But we are in this position and the longer there is a delay we know the profitability of the contract to Derby goes down."

Conservatives took control of the council in May. It had previously been run by Liberal Democrats for two years.

Mr Jennings said: "Lessons do need to be learned, both about making contracts more specific and clearer and also in communicating to people the reasons for decisions as openly as is possible and making decisions quickly but with consideration."

RRS signed a conditional contract with the two councils last year to deal with the county's rubbish.

As a key part of doing that, the company wants to build a waste treatment plant in Sinfin Lane, Sinfin, which would deal with 180,000 tonnes of household waste a year, stopping it going to landfill.

Just after signing the conditional contract, the waste plant was refused planning permission by the city council's planning committee in December on health grounds.

The final contract was due to be signed last year but was held up because of difficulties the company had in raising finance during the recession.

Now that finance is in place, city council officers are recommending the cabinet member responsible, Councillor Chris Poulter, agrees tomorrow to finalise the contract.

Doing so will commit the authority to clauses which could see it paying RRS compensation if it fails to get the waste site it wants.

And if the planning appeal fails, RRS is able to walk away from the contract in 2012, leaving the councils having to find another company to deal with the county's waste and potentially having to foot the bill for some of RRS's costs.

But Mr Poulter said the decision he is facing tomorrow is not a moral one about whether the plant should be built, but a financial one.

He said: "This is a contractual and commercial decision and the moral argument does not come into it."

Mr Jennings and Mr Poulter said existing financial offers, based on interest rates and exchange rates, would only be open to the company for a certain amount of time, meaning failure to sign the contract now could see costs increase at a later date.

Mr Poulter said that, despite the difficulties which have arisen due to planning permission for the plant being refused, the contract could still be good value for Derby.

He said: "The commercial value over the lifetime of the contract would be around £1 billion.

"As councils we will each put in £25 million, but only once the waste plant has been up and running for six months."

Mr Poulter said carrying on as normal and sending waste to landfill while dragging out the contract process until after the planning appeal had been heard would be too costly.