Business

Tuesday 23 January 2018

Serious concerns raised over €10m Poolbeg overspend

Council cannot locate project files and key staff

Owen Keegan, Dublin City Manager
Owen Keegan, Dublin City Manager

Paul O'Donoghue

A LOCAL government audit report has raised serious concerns about a massive €10m overspend on the controversial Poolbeg incinerator project.

Dublin City Council was responsible for moving a company, Westway Terminals Hibernian Limited, and building it a new premises to make room at the Poolbeg site for the proposed incinerator.

The council had initially budgeted €12m for the project, however the construction of new premises for the company ended up costing nearly double that at just over €22m.

In a recent report, the local government auditor found that two separate cost reports commissioned by the council did not properly explain why the massive gulf in spending occurred, saying: "In my opinion neither of these reports adequately explains the €10m difference between the amount paid to the contractor and the original tender amount."

Dublin City Manager Owen Keegan outlined several reasons in a response to the audit why the overspend occurred. Chief among these was a 76-week delay in installing an 850m pipeline due to "protracted" negotiations with the Dublin Port Company and consultants on its route. Due to the delay, both labour and material costs on the project also rose.

A spokesman for Dublin City Council said that the reasons outlined by Mr Keegan "clearly elucidates the key factors relating to the overspend which were specific to this project".

"Every effort is made to ensure that overspend does not occur on any infrastructural project."

However, Mr Keegan said in the response that "it will not be possible to provide further material on this matter" as several files relating to the project are missing.

Mr Keegan added that another reason why he had difficulty in securing information on the overspend is due to the fact that key staff who worked on the project now work elsewhere, "mostly out of Ireland".

Due to the absence of the files and staff, Mr Keegan concluded that "it will not be possible to provide further material on this matter, i.e. the variance between the tendered amount and actual amount". Dublin City Council did not say whether it intends to pursue either the files or personnel that it currently cannot locate when asked by the Sunday Independent.

An official source told the Sunday Independent that the auditors cannot take legal action against the council regarding the overspend but added that the issue may be raised in subsequent audit reports.

The Poolbeg incinerator has been dogged with controversy since its inception and has seen its costs hit roughly €100m to date including a total spend of €52m on the project site, which was last estimated to be worth just over €6m.

Work recently began on €600m incinerator after years of delays and despite Dublin City councillors voting against the project.

The facility will be built and run by New Jersey-based waste firm Covanta and will have the capacity to burn 600,000 tonnes of waste a year. It is expected to start operations in the second half of 2017.

Covanta is to spend almost €500m developing the project, with approximately €100m already spent by the four Dublin local authorities.

The Poolbeg incinerator plant was first proposed in 1997 but has faced numerous legal and political delays, including an unsuccessful complaint made to the European Commission that the project was in breach of State aid rules.

Sunday Indo Business

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