City manager reveals cost of Poolbeg could hit €108m
Published 23/01/2014 | 02:30
DUBLIN City Manager Owen Keegan has backed calls for an independent investigation into the Poolbeg Incinerator, which could now cost the taxpayer a staggering €108m.
Mr Keegan was highly critical of aspects of the management of the project and admitted that it may be scrapped entirely.
Members of the Oireachtas Environment Committee were left stunned at the litany of poor decisions made on the project.
And in a highly significant move, Mr Keegan described as "entirely appropriate" the prospect of an independent investigation into Poolbeg.
His remark came as committee chairman Michael McCarthy agreed to a request for Mr Keegan's predecessor, John Tierney, to appear in front of the committee in relation to his role in the now-stalled project.
It means that both the Environment and the high-powered Public Accounts Committee want to quiz the Irish Water Chief over his role in Poolbeg.
Mr Keegan put in an impressive performance at the committee hearing as he admitted that "serious weaknesses" have been uncovered.
"Nobody is more concerned about the cost than I am," he said.
The former Dun-Laoghaire Rathdown County Manager told the committee:
* That it will prove "very difficult" for the project to proceed if an EU probe makes adverse findings against the council.
* The overall bill may be as large as €108m but that this could be recouped if the project gets the green light.
* There is no record of minutes from crucial project meetings involving senior City Council officials.
* He would have made different decisions in relation to the spending on consultancy, which has now reached almost €30m.
* US company Covanta, which is the firm behind the project, did not pass the tendering original tendering process but instead acquired the contract from a different company.
Mr Keegan said that he now takes "responsibility" for the project given the fact he is the new City Manager.
But he was highly critical towards aspects of the management of the Incinerator, which is designed to deal with waste in the wider Dublin region.
"It is undoubtedly the case city council has made mistakes in relation to the management of this project," he said, adding that the mistakes have been learned from.
In response to a series of questions from Labour TD Kevin Humphreys, Mr Keegan admitted that the overall bill could reach €108m because of a €12m spend on a directly related project.
The council decided to construct a district heating project during the initial stages of Poolbeg. The project, which will see heat being provided to homes, is dependent on the Poolbeg Incinerator proceeding. Mr Keegan told Mr Humphreys that some €12m has been spent on the project, which was accepted by inter-related by Dublin City Council officials.
A further €96.3m has been spent on the incinerator by the four local authorities - despite the fact not a single brick has been laid. Some €4.5m was recouped from the relevant PPP company, while Mr Keegan insisted that much of the spend will be recouped if the project goes ahead.
Separately, Mr Keegan was quizzed over the decision to spend €29.77m on consultancy, despite only budgeting €8.3m. He admitted that the contract - awarded to RPG – should have gone out for tender again on two occasions.
"Every extension of the project was negotiated and was subject to managerial approval... but I accept it was unacceptable and it should have gone out for procurement in 2005," he said.
"To be able to give you assurances about value for money, this thing should have gone out for procurement again, probably twice, and it didn't...hands up that was wrong.All I can do now is to say I would put arrangements in place to terminate that expenditure," he added.
Fianna Fáil senator Averil Power described the spend as "phenomenal" and likened it to the massive money spent on the failed Electronic Voting machines. "It's throwing good money after bad," she said.
An incinerator to deal with waste in the greater Dublin area was given the go-ahead in November 1997.
But a series of objections and an EU-led investigation into the awarding of contracts means that no physical work has yet been done on the site.