Incinerator cost jumps to €500m – but council insists it won't be hit for the hike
Published 01/03/2014 | 02:30
THE cost of building the controversial Poolbeg Incinerator has spiralled to €500m, the Irish Independent has learned.
Dublin City Council has confirmed the bill has increased from €350m, but said its private sector partner would fund the works and it would not result in additional costs for the local authority.
And construction of the waste-to-energy plant has moved a step closer after the removal of a controversial "put or pay" clause from the contract and confirmation that the council's partner had secured funding for the project.
The council confirmed it would not be obliged to guarantee that 320,000 tonnes of waste a year is processed at the plant, and said a decision on whether the project could go ahead was likely in late June, with construction to begin in the autumn.
The council's private-sector partner, US company Covanta, has secured the funding needed to build the plant.
A spokesman for Covanta said construction on the incinerator would begin when all the approvals were in place, adding that it had secured funding.
The council said Covanta had put in place a "funding package which is acceptable to the Dublin local authorities".
It added it was awaiting the outcome of complaints to the European Commission from locals regarding state aid and procurement rules, before further work on the project starts.
The development comes after the council, which is developing the plant on behalf of the four Dublin local authorities, revealed earlier this week it planned to spend €620,000 on the project up to the end of June on site security and monitoring, professional advice and other costs.
The project has been beset by controversy, with major concerns around the put or pay clause, which would have left the local authorities liable for any financial shortfall in the event the incinerator was not used. In addition, More than €96m has been spent to date, including payments to private consultants which were not retendered, despite breaching EU rules.
Dublin city engineer Michael Phillips said the EU Commission complaint was the "only hurdle" remaining to stop construction of the plant, which was granted planning permission in 2007.
"We would like a decision by the end of April and would like to start construction in the early autumn," Mr Phillips said.
"The cost will be €500m. That's the cost when the contractor went out to cost it, and it's just the market."
He said the put or pay clause had been removed following a High Court decision which meant the council was not entitled to direct private companies to use any waste disposal facility.
Instead, a 15-year legal agreement is in place where if the 600,000-tonne plant is not fully utilised, the council will be obliged to pay up to 60pc of the loss in income.
Mr Philips said Covanta was confident it would utilise the facility using waste from the Dublin region, but it could accept waste from across the country to make up any shortfall.
The contract to operate the plant will run for 45 years, and Mr Phillips said any governance issues had been addressed with new systems put in place to monitor spending.
Meanwhile, Public Accounts Committee (PAC) chairman John McGuinness has said there is a "strong possibility" that former Dublin City Manager John Tierney will be called before the PAC to answer questions about the project.