UP to 500 jobs are on the line after the US firm behind the controversial Poolbeg incinerator last night threatened to pull out of the project.
Covanta has told investors it has written off its entire €16.5m (US$23m) investment in the €200m waste-to-energy plant and that it has "no obligation" to proceed with the project, the Irish Independent has learned.
Chief executive Tony Orlando said the company would not begin construction works until it secured the necessary funding, and only "if and when" it made sense.
His comments were made in a conference call to investors where he revealed that Covanta had decided that the project was "impaired".
The move comes as political opposition from Environment Minister John Gormley to the facility intensifies.
Mr Gormley has commissioned a report into the contract signed between Dublin City Council and Covanta, because he believes the taxpayer will be forced to pay if 320,000 tonnes of waste a year are not treated in the plant.
He plans to introduce incineration levies, which could make it too expensive to use.
He has repeatedly opposed construction, saying it is too big for the city's needs.
But Covanta yesterday gave its clearest signal yet that it was prepared to pull out.
"We have no obligation to proceed with the project on the original terms," the company said in a conference call with investors.
"At this point we intend to move forward only after project financing is secured and, given the uncertainty created by the environment, we have determined it's appropriate from an accounting perspective to write off our entire investment.
"That is not to say we have given up -- we haven't."
Dublin City Council, Covanta's partner in the project, described the writing-off of the investment as "purely an accounting issue".
But the Irish Waste Management Association, which represents private waste collectors opposed to the plant, said Covanta's comments showed it was considering withdrawing.
"Covanta is now clearly signalling that all options are on the table, including the option to withdraw," a spokesman said.
A spokesman for Mr Gormley rejected suggestions jobs would be lost if the plant was not built, saying other waste companies were prepared to invest in alternative treatment plants.
"This project is not viable from a financial point of view and the taxpayer will pay if it goes ahead," he said.
"There are a number of Irish companies poised to invest tens of millions of euro in environmentally friendly technologies which will create thousands of jobs. That investment won't go ahead if the incinerator is built."