Decision on approval for Poolbeg incinerator due next week

National Development Finance Agency to decide if plant is value for money

A computer-enhanced image of the   Covanta incinerator at Poolbeg, Dublin

A computer-enhanced image of the Covanta incinerator at Poolbeg, Dublin

 

Dublin City Council will next week learn whether it can go ahead with the development of the controversial €600 million Poolbeg waste incinerator. The council has had planning permission to build the 600,000-tonne waste-to-energy plant for seven years, but its development has hit numerous financial and legal obstacles.

Next week, the council will learn if the project meets the standards of the State’s Public Private Partnership (PPP) financial watchdog, the National Development Finance Agency. The agency’s approval is the final hurdle before the council can give the go-ahead to Covanta, the US firm contracted to build and run the plant. Covanta is expected to spend €500 million developing the plant, in addition to the €100 million spent by the council, if it is built.

The council must secure a value-for-money certificate from the agency to proceed. While the project had been awarded value-for-money certificates by the agency twice before, these were now out of date, the council said.

Following the response from the agency, the council’s chief executive Owen Keegan will brief councillors on Monday week on the fate of the project. Mr Keegan is committed to seeking the views of councillors before deciding whether to go ahead with the development, but the final decision will rest with the chief executive in consultation with his counterparts in the other Dublin local authorities.

Almost €100 million has so far been spent by the Dublin local authorities on 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.

Mr Keegan told an Oireachtas committee last January that money would be lost if the project did not go ahead. “If the project does proceed, there is a very good chance we will recoup this investment.” Covanta could try to recover its costs from the council if the project was scrapped, he added.

Councillors are likely put pressure on Mr Keegan to drop the project. Members of the last council voted in March to scrap it, passing a motion calling on the council management to cancel the contract with Covanta. In response, Mr Keegan warned that cancelling the project would cost up to €160 million, which would be “pretty much be a disaster”.

“If the project isn’t signed off by the NDFA, then the project is abandoned and we will have to deal with realising an enormous capital loss,” he said.

The make-up of the council is much changed since the local elections last May, but the majority of the new council remain opposed to the development of the incinerator.

The incinerator was first proposed in 1997 and was granted planning permission in 2007. There was a brief period of site clearance work, but construction has yet to start. The project has been beset by delays, including the failure to secure a foreshore licence from former minister for the environment John Gormley, problems securing finance for the scheme, and complaints made to the European Commission that the incineration project was in breach of State aid rules. The council was recently cleared of these complaints.