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A decision between Southland disAbility Enterprises and WasteNet has been made, with SdE keeping the recycling contract for a further year.
SdE currently employs 82 people with disabilities to work on the recycling contract.
The agreement between WasteNet and SdE is to be formally endorsed by the three WasteNet partner councils – Gore District Council, Invercargill City Council and Southland District Council – early next week.
"The agreement is good news and gives us all some space while ensuring the workers at SdE can continue to come to work every day," WasteNet spokesman Gary Tong said.
The current contract was due to expire at the end of the month and had been put out for tender since last year, but will now continue through until June 30 2020.
Late last month SdE chose to break confidentiality and inform staff the contract was, at that time, likely to go to another tenderer.
The process has been contentious, with councillors at Invercargill City Council debating whether it had been transparent enough.
It was later found that partly in response to a meeting on the issue at the beginning of this month, Cr Karen Arnold voiced to council her intention to resign.
She said, specifically regarding the WasteNet contract, she had lost confidence in the current council's decision making process.
Following the meeting, Gore District Mayor Tracy Hicks and Southland District Mayor Gary Tong issued a press release which provided information about SdE and why it was not the preferred tenderer, including claims of stalled financial negotiations.
In response, SdE released their own that disputed a lot of what was written by the two mayors.
SdE chairman Stephen O'Connor said the statement of the two mayors was "not an accurate account'' and "misinformation'' had been circulating about the negotiations.
SDC released a second statement that said both Mr Tong and Mr Hicks stood by what they had said in the earlier release - "However, we are not going to engage in a tit-for-tat debate as we believe it will further damage ongoing relationships, and add extra stress and confusion for everyone."
"We have asked our staff to fast-track the review of what further information can be released without jeopardising any future decision around this tender process, which remains live."
Discussions on the tender for the new recycling sorting contract are to continue between the three councils.