Gormley in fresh incinerator controversy
A STATE finance agency approved the contract for the controversial Poolbeg incinerator two-and-a-half years ago after finding it represented good value for money, the Irish Independent has learned.
This emerged just days after Environment Minister John Gormley said he wanted the contract, which was signed in September 2007, to be independently assessed.
The National Development Finance Agency (NDFA) gave a 'green light' to the deal in 2007, despite claims by Mr Gormley that the contract to build and operate the plant could expose the taxpayer to a potential liability of €18m a year.
The contract between Dublin City Council and private operator Covanta/DONG Energy includes a controversial clause guaranteeing that 320,000 tonnes of waste a year will be treated at the plant.
If the amount is below this, the council must pay up to €100 for every tonne short.
Failure to comply would cost the council up to €18m a year, Mr Gormley claims, and he plans to appoint an independent expert in the coming weeks to determine whether the taxpayer is exposed.
But the NDFA, which is tasked with ensuring the taxpayer gets value for money in large infrastructure projects -- conducted the same exercise in 2007.
The agency's chief executive Brian Murphy confirmed yesterday that it had signed-off and "fulfilled its statutory obligation" in 2007. It also emerged that officials from the minister's own department sat on the committee which oversaw and approved the €350m project.
The minister says the council may not be able to comply with the clause guaranteeing a set tonnage. "The department signed-off on the project in 2005 but no approval was given while the minister was there," said a spokesman for Mr Gormley.
"The minister wrote to the council in June 2007 as soon as he became aware (of the put and pay clause) and outlined his concerns.
"He's going to do a risk analysis in terms of the potential exposure to the State if this can't be filled. They (the city council) were told that waste policy was changing. They were asked on numerous occasions to change the contract and refused to do so. They decided to proceed against what the minister said."
Even if Mr Gormley's review finds the taxpayer is exposed, it is unclear what he can do.
Cancelling the contract will cost the taxpayer, and is unlikely to be agreed by his cabinet colleagues, and putting a cap on the amount of waste to be incinerated will leave the city with a facility it can't use.
Dublin city manager John Tierney said yesterday the council had followed government policy.
"The Dublin local authorities have followed government policy for almost 12 years in respect of this project," he said.
The four Dublin local authorities collect 280,000 tonnes of "black bin" waste a year, which means 40,000 tonnes more is needed to meet the terms of the put or pay clause.