Poolbeg contract extension a ‘major financial risk’

ENVIRONMENT Minister John Gormley has warned that Dublin City Council’s decision to extend the multi-million euro contract for the Poolbeg incinerator, which has already cost at least €120 million, poses a “very significant” financial risk to the taxpayer and the state.

Speaking to the Irish Examiner after it emerged the local authority had extended the review period of the controversial contract, which ran out on Sunday, until May 2 next year, the senior cabinet member’s spokesperson said the move was not in the interests of the public.

Under the initial 2007 contract for the Poolbeg incinerator development, private consortium Covanta was given planning permission to build a disposal facility in south Dublin to cater for 600,000 tonnes of waste, with the majority of this coming from the Dublin City Council population.

The details of the deal, which is already believed to have cost at least €120m, stated Dublin’s local authorities would be hit with financial penalties if they failed to provide a set amount of waste to the incinerator. As these targets were based on Celtic Tiger consumer levels, it is thought they are no longer being met – resulting in the Government having to pay Covanta to make up the difference between the target and the level of waste provided.

However, despite a leaked copy of the contract revealing a clause in the document stating that Dublin City Council can pull out of the deal at no cost if targets for Covanta had not been met by last Sunday, the local authority has decided to continue with the agreement.

In a meeting last night, Dublin City manager John Tierney told councillors the 35-day “review period” for the contract is to be extended by 240 days and will now end on May 2, 2011, and said the incinerator may not be fully built until 2014.

He said while the agreement is being examined by the local authority’s lawyers, talk of renegotiating the deal was misplaced as reducing the incinerator capacity from its current level would require new consents, costing more money.

However, a spokesperson for Mr Gormley insisted this was not the case, adding the Green Party leader is seeking clarification on the exact reasons for the extension.

“Poolbeg was designed for a Celtic Tiger level of waste which isn’t being produced now. The minister wants the council to come clean on the level of waste being produced, because the penalties involved if we are missing the waste targets pose a very significant risk,” he said.

Mr Tierney told councillors who attended the meeting of the local authority yesterday that the May 2011 extension offered value for money to the taxpayer. However, Jim O’Callaghan of Fianna Fáil and independent councillor Mannix Flynn raised doubts over the claim, with Mr O’Callaghan insisting there is now a “Mexican stand-off” between the minister and the city manager.

The end of the initial 2007 Poolbeg contract had not been publicised until it was revealed by RTÉ’s Prime Time last Thursday.

Construction of the incinerator began last December, but has been suspended since May because, Covanta has said, of the lack of a foreshore licence which Mr Gormley has declined to provide.

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