January 17, 2010

Poolbeg Incinerator Contract Seen By Business Post. Losses Likely.

Before reading the Business Post article you may like to take a look at this actual example.  It's about how a Covanta contract in Florida cost $300 million over 22 years, and worked against recycling.

The Poolbeg Incinerator could cost Irish Taxpayers an additional €450 million over 25 years.  Ask Dublin Council to confirm this and ask them to release their secret contract.  Set up the meeting at Bada Bing.


Losses likely on Poolbeg incinerator
17 January 2010 
By John Burke

Dublin City Council could lose money on the planned Poolbeg incinerator in Dublin, even if the facility is highly profitable, The Sunday Business Post has learned.

Under the terms of a contract between the council and US energy giant Covanta, the council will forgo a large proportion of any income it is entitled to if it fails to supply an agreed ‘Band 1’ tonnage of waste to the facility. The clause applies even if the incinerator is profitable.

In addition to the potential loss, the council will face penalties if it fails to supply the 320,000 tonnes of waste to the incinerator each year. The incinerator will have capacity for 600,000 tonnes of waste, so the council is contracted to supply more than half the total each year.

The contract states that revenue from the sale of energy from the incinerator - both electricity and heat - will be shared between the council and Covanta. The agreement also specifies strict circumstances under which both sides may withdraw from the contract if an ‘‘uninsurable risk’’ arises or in the event of a relevant ‘‘change in law’’.

It is understood that the areas covered by an uninsurable risk would include a legal determination that the contract breached competition law. Environment minister John Gormley, who is opposed to the incinerator development, will next week appoint a special investigator to examine aspects of the project at Ringsend in Dublin. Gormley has also said that he may refer the deal to the Competition Authority for scrutiny.

The confidential agreement between the council and Covanta, a copy of which has been seen by The Sunday Business Post, also shows that engineering firm RPS Ireland was hired to carry out the key environmental study on the public private partnership project.

RPS was criticised in a recent High Court judgment for ‘‘massaging’’ elements of reports it carried out for Dublin City Council and the other three Dublin councils, in order to suit the wishes of the councils. RPS has denied any wrongdoing.

In the same unpublished High Court judgment, economist Francis O’Toole, a director of the Bess business course at Trinity College Dublin, was also accused by the court of altering elements of his reports to suit the needs of Dublin City Council.

O’Toole said that his findings in relation to the economic assessment of Dublin’s waste market had remained consistent throughout his assessment.

‘‘As part of the process of reviewing any economics of competition policy issue, I listen to and read comments from various parties, including - but certainly not limited to - the client and/or its legal representatives," he said.

© Thomas Crosbie Media 2010.


Anonymous said...

Council will have to pay €70m for incinerator site
17 January 2010  By Pat Leahy and John Burke

Dublin City Council is to pay €70 million for the site for its controversial incinerator in Poolbeg when the deal is completed later this year.

The council is in arbitration with a number of parties over a compulsory purchase order for the 13.6-acre site in Dublin, but the eventual figure will be of the order of €70 million - or more than €5 million an acre - according to a council spokesman.

Some €120 million has been spent on the incinerator project to date. A detailed breakdown of the figures is not available, but the council said that the remaining €50 million was spent on by consultancy costs, legal bills, securing planning permission, environmental approval and other development costs.

The cost of the Poolbeg incinerator is running at many times the cost of a private incinerator being built in Co Meath. Indaver, which is building the Meath incinerator, said it had spent €6.5 million so far on that project, which included the purchase of the site and development costs. The Indaver incinerator will have a 200,000 tonne capacity, which is smaller than the Poolbeg project, which has capacity for 600,000 tonnes annually.

The Poolbeg project has been criticised by several groups, including John Gormley, the Green Party leader and Minister for the Environment, as being too large.

Meanwhile, The Sunday Business Post understands Dublin City Council will lose millions of euro in income under a revenue share agreement for the incinerator, if it cannot supply up to 320,000 tonnes of waste a year. The figure is in addition to penalties the council has already said it could pay to the incinerator operator.

Anonymous said...

Covanta $200M incinerator deal took Florida's Lake County to cleaners, critics say

February 15, 2009|By Martin E. Comas, Orlando Sentinel Staff Writer

OKAHUMPKA -- It's a deal that many have called the biggest boondoggle in Lake's history because when the bonds are paid off for the Covanta Energy garbage-burning plant in June 2014, the county will not own the plant.

It's also a deal that forced higher garbage rates and taxes on residents and businesses to cover all those costs.

Because of today's slumping economy, it's particularly painful.

"Under that crazy contract, it hurts," County Commission Chairman Welton Cadwell said.