Poolbeg plant costs rise from €400m to €600m
Developers may try to recoup their losses from city council if incinerator is scrapped
Dublin city manager Owen Keegan arrives at the Dáil to give evidence to the Oireachtas environment committee about the Pool Beg Incinerator. Photograph: Alan Betson
The Poolbeg incinerator would cost about €600 million if it was developed, Dublin city manager Owen Keegan has told an Oireachtas environment committee. The plant’s developers, Covanta, could try to recover their costs from the council if the project was scrapped, he said.
Dublin City Council has spent more than €96 million in relation to the development of the incinerator, one-third of which has been paid to consultants, and more than €50 million of which went to buy land for the facility.
The public-private partnership company (Covanta) would, in addition, be spending some €500 million if the project went ahead, Mr Keegan said. The plant had been expected to cost €400 million to develop.
The money spent by the council to date would be lost if the project did not go ahead, he said. “If the project does proceed there is a very good chance we will recoup this investment,” Mr Keegan said.
However, it “may be a big if” he said. The council was still awaiting the verdict of the EU Commission on complaints over its operation of State aid and procurement rules in relation to the development of the plant. Responding to these complaints had cost the council €1.2 million he said. “If the complaints are not resolved it will be very difficult for the project to proceed.”
If the commission finds in favour of the council, a revised project agreement will need to be finalised with the developers. This will then have to be approved by the National Development Finance Agency and then by the project board, which includes representation from the Department of the Environment.
Mr Keegan said he would then seek the views of city councillors before he and the managers of the three other Dublin local authorities decided whether to go ahead with the project. It would not be appropriate to say whether or not he was in favour of the project until these matters were resolved he said.
Mr Keegan, who has been city manager since last September, was asked if he would have pursued the project had he been city manager when contracts were signed in 2007.
He said if he had known the difficulties ahead, he would not have gone about the project in the same way. “If I knew there was going to be fundamental change in the organisation of the waste market and that local authorities would no longer be the major players, I wouldn’t have been pursuing it in the manner that it was pursued.”
There was “no doubt mistakes were made,” he said. The consultant’s contract with RPS was being terminated at the end of this month, but he said it was “not acceptable” that the contract had not been readvertised in 2005.
Land for the site was bought at the height of the boom and would now be worth considerably less, he said. But as current city manager he took responsibilty for the project he said.
Development of the plant had taken “far too long” and had been “extremely challenging”, but it remained consistent with national and EU waste policies and was “still needed”, he said. Even in countries with high rates of recycling, such as Germany, 33 per cent of waste is incinerated he said. “Incineration does not displace recycling it replaces disposal to landfill.”
The committee has decided to call Mr Keegan’s predecessor John Tierney to answer questions in relation to his role in developing the incinerator.