City council shelves plan for Poolbeg contract
Published 15/01/2014 | 02:30
DUBLIN City Council has been forced to shelve plans to award a lucrative consultancy contract linked to the controversial Poolbeg inciner- ator.
Officials were set to recruit a new group of external experts this month. But those plans have been put on hold with the future of the proposed €400m waste incinerator now in doubt.
A report drafted by Assistant City Manager Seamus Lyons in November, and circulated to councillors on Monday night, said the council planned to replace outgoing consultancy firms RPS and Danish company COWI.
This consortium was paid more than €32m to represent the Dublin local authorities in contract negotiations with US incinerations firm Covanta.
The spending is a third of the €96m already spent on the scheme over the past 12 years without a single brick being laid.
The RPS/COWI contract is being terminated this month after the European Commission upheld a complaint from Sandymount residents that it did not conform with EU procurement guidelines.
RPS is a major international consultancy firm that advises on energy and other major infrastructure projects and had a role in the setting up of Irish Water, receiving €262,000 in consultancy fees from the utility company.
Two of its ex-employees, former head of asset management Jerry Grant and former head of project communications Elizabeth Arnett, are now working with Irish Water.
Initially the consortium was to be paid just €8.3m for technical, commercial and legal advice. But it was retained for much longer than anticipated, leading to a consultancy overrun of over €20m.
Mr Lyons's report said a new procurement process was taking place and it hoped to have a replacement this month.
But the council has now rowed back on this, issuing a clarification to councillors.
It said the council no longer intended to commission any additional consulting.
The future of the entire project is up in the air.
City manager Owen Keegan told councillors earlier this week that it may be abandoned altogether.
Its future hinges on EU investigations into complaints against the project.
Among these is a claim the public-private partnership contract with Covanta breached EU regulations on state aid and procurement. The investigation findings are expected in the first quarter of the year.
Mr Keegan said that after the EU investigations are completed he would compile a report for councillors setting out arguments for and against the project going ahead.
"We do not propose to spend any additional money until the matter of the EU investigations is dealt with," he said.
In a statement issued to the Irish Independent last night Covanta said: "Construction of the project will commence once Dublin City Council receives its final approvals and we complete documentation and secure financing. Given the extensive work effort involved in closing this complex deal, we cannot comment further at this time."
The project has been a political hot potato. The refusal of former Environment Minister John Gormley to approve a foreshore licence, which was essential for the project, meant the agreement between the local authorities and Covanta had to be renegotiated. The delay also meant Covanta was no longer obliged to fund the facility from its own finances.