Council paid double to relocate firm from Poolbeg site

Dublin City Council ended up paying nearly twice as much for a new premises to accommodate a firm of cargo handlers in Dublin Port so the planned Poolbeg incinerator could go ahead, an investigation by the local government auditor shows.

The relocation of Westway Terminals Hibernian Ltd from its one-hectare site cost €31 million. The council was obliged to buy an alternative site on South Bank Road from the ESB for €2.4 million and pay for building new premises for Westway.

This cost €22 million – almost double the original contract price of €11.9 million. By agreement with the council, expenditure on the project was certified by Westway’s consultants, as the auditor’s report noted, the council “did not procure their own consultant”.

No explanation
Dublin Port Company was paid €8.5 million for its freehold interest in the bulk of the 6.2-hectare Poolbeg site under a compulsory purchase order in September, 2011. It was also paid €925,918 in interest, although the report did not explain why this was so high.

A leasehold interest held by Hammond Lane metalworks – a scrapyard – cost €5 million to buy. The council also spent €1,480,787 on relocating this business, including €339,117 in consultancy fees and €858,495 on a temporary site.

The Clearway Disposals Ltd directors’ pension scheme was awarded €1.52 million plus interest and costs for its lease on a much smaller part of the site. This formed part of an overall figure of €9.88 million for land acquisition to facilitate the “waste-to-energy plant”.

Dong Energy
Council management selected Danish company Dong Energy as its prospective partner in developing the €400 million plant, which would have a capacity to burn 600,000 tonnes of waste per year. Dong later handed over its interest to American operators Covanta.

In 2001, the council appointed as its “client representative” consultant engineers MC O’Sullivan, then headed by PJ Rudden. He had also been principal author of the 1999 Dublin region waste management plan, which included the controversial incinerator proposal.

The original contract was for €8.3 million, which included PR services by Mary Murphy & Associates. Like MC O’Sullivan, this firm was later taken over by the RPS group. By the end of 2011, they had received a total €28.4 million. (This has since risen to €32 million).

“The continued appointment of the client representative should have been reviewed as far back as 2005 in accordance with procurement guidelines,” the auditor’s report said. Having since been found to breach EU rules, it is now to be terminated on January 31st.

The original PR contract with Mary Murphy & Associates was for €1,296,783, to be paid in bimonthly amounts of €43,226 (excluding VAT) for five years. “Due to delays in the project, RPS was paid a total of €3,009,437 on this basis up to April 2011.”

According to the auditor’s report, there was no manager’s order to cover the extra costs. “A new public consultation retainer of €14,000 (excluding VAT) per month was agreed from May 2011 to February 2012. This has now been discontinued.”

The auditor concluded: “it is evident that the financial management . . . has been weak” and said “no proper classification of expenditure on an invoice basis was available to account for monies spent” on Poolbeg by council management.

No evidence
"There is no evidence of monitoring of detailed budgets or financial forecasts . . . or that detailed monthly/quarterly reports were examined to control expenditure, apart from client representative summary reports presented to DCC management."

He said the project executive board – headed by former assistant city manager Matt Twomey – “did not meet on a formal basis and therefore no minutes of meetings were retained”.