Dáil debates
Tuesday, 18 September 2012
Topical Issue Debate
Waste Management Regulations
6:25 pm
Kevin Humphreys (Dublin South East, Labour)
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I thank the Minister, Deputy Hogan, for coming to the Chamber to deal with this Topical Issue matter. I am fully aware that this problem is not one of his making but dates back to former Minister, Dick Roche, who signed the contract as he was running out of office, leaving a shambles to be dealt with by others.
On 29 February 2012 Dublin local authorities and Covanta reached an agreement on a revised commercial arrangement for the Poolbeg incinerator with a final extension to the end of August. We were told this would be its third and final extension. In June Covanta's chief financial officer, speaking at a J. P. Morgan conference in the US, said that it was proving difficult to raise the necessary capital to fund the Poolbeg incinerator. On 31 August the contract for the Poolbeg incinerator with Covanta expired. There is no sign that Covanta has been able to raise the money to construct it.
It has been made clear by the Minister that the regulation of the waste market will not be rejigged to make the incinerator commercially viable by trying to give the council control over waste collected by private companies. It is now 15 years since an incinerator at Poolbeg was first proposed and it has cost €91 million so far. That is taxpayers' money - that includes the Minister, myself and every working citizen who has paid his or her taxes.
The original contract was to build a 600,000 tonnes incinerator which was far too big for our current and future use. Its proposed location, on a peninsula in the centre of Dublin city with only one road in and out to it, was in the wrong place. This saga has created massive uncertainty in the market. Waste companies have been holding back on investment that would allow us to meet our recycling and recovery targets. Such investment would create sustainable jobs. Some of our semi-State companies have put investment in the recycling and re-use industry on hold awaiting a decision on this over-sized incinerator proposal.
To date the Poolbeg project has involved a cost of €52 million on the purchase of the land alone, €32 million has been given to consultants and that cost to taxpayers is still increasing. It is stated in a report to Dublin City Council this month that the city manager, on behalf of the regional authority, felt it reasonable to consider a further extension. The facts I outlined should lead the Minister to a different conclusion. It is past time for the Minister to intervene in this matter. He may say he has no direct powers in this area but the money of taxpayers and ratepayers is being continuously wasted in this process. Such money could be invested in the recycling and re-use industry. We are still awaiting a decision on whether Covanta can get the necessary money but I do not believe that money can be raised and I believe we will see endless extensions and uncertainty in this matter.
This is a mess not of the Minister's making but he has the skills and the determination to intervene and resolve it. We need a sustainable waste industry and this proposed 600,000 tonnes capacity monster project will destroy that industry. I ask the Minister to take a direct role in this, to step in where previous Ministers have failed to do so. He has the skills and the tenacity to intervene and resolve this long-running saga.
6:35 pm
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I get worried when a Deputy says that I must intervene in something. The Poolbeg project, as Deputy Humphreys indicated, is provided for in the Dublin regional waste management plan, for which the four Dublin local authorities have statutory responsibility under the Waste Management Acts. The facility is being advanced by Dublin city Council, albeit with the caveats that the Deputy has outlined, in conjunction with Covanta Energy and DONG Energy.
The project received planning approval as far back as November 2007 and was granted a waste licence from the EPA in December 2008. As the Deputy indicated, the facility is intended to have a capacity of 600,000 tonnes. The position is that, in accordance with the provisions of the of the Waste Management Acts, the preparation and adoption of a waste management plan is the statutory responsibility of the local authority and, under section 60(3) of the Act, the Minister is precluded from exercising any power or control in relation to the performance by a local authority, in particular circumstances, of a statutory function vested in it.
As the Deputy will be aware, my predecessor appointed Mr. John Hennessy to have a look at this contract under section 224 of the Local Government Act 2001 and to examine the potential financial risks associated with the Poolbeg project within a given set of scenarios. As consideration of that report had not been completed when I came into office, it fell to me to consider the report's findings.
In June 2011, I published the report prepared by Mr. Hennessy in order to ensure that as much information as possible is available to the public while respecting the confidential nature of certain information provided by Mr. Hennessy in the course of his work. The report was therefore redacted to protect commercially sensitive information. At the time of publication I indicated that much had changed since the report was commissioned and there would be further changes as I finalised a new waste policy. Mr. Hennessy provided a very good report but he was working within a set of scenarios which had been narrowly defined for him and this somewhat restricted the applicability of the report. Having consulted my Government colleagues, I concluded there was no national waste policy justification for intervening in the matter.
The position remains that decisions in relation to the Poolbeg project are a matter for the two parties concerned. I understand that the parties are in a period of review and that an update was provided to Dublin City Council earlier this month. Queries concerning the status of discussions, contract terms and costs of the project are not a matter for me at this stage, notwithstanding what the Deputy said about the amount of money that has been spent on the project to date.
My role at this stage is to provide certainty in terms of waste policy, which I have done, and I will provide an update on the recent publication of the new national waste policy later on. I can assure the Deputy that investment in all methodologies and technologies is difficult to finance and is not readily available for any project. The State, through the local authority system, is not in a particularly healthy state financially to intervene in order to provide the necessary interventions in regard to waste policy. I agree with the Deputy that we need to get certainty on this, and to do so sooner rather than later. I am disappointed that it has taken so long to come to a conclusion, one way or the other, on this contractual obligation in which Dublin City Council and Covanta are involved. I will closely monitor the situation in the coming weeks to determine if there is any hope of coming to a conclusion and at the end of the year perhaps I will review the matter.
Kevin Humphreys (Dublin South East, Labour)
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I thank the Minister for his response. I advise him that the transcript of proceedings of the Committee of Public Accounts on the occasion that officials were questioned on the cost involved and the methodology used in respect of the proposed incinerator is required viewing. My colleague, Deputy Eoghan Murphy, did an excellent job on highlighting the facts and the issues involved at the Committee of Public Accounts. I recommend that the Minister reads the transcript. I know he is extremely busy and that sometimes briefs are prepared for him but I ask him to take a step back and read the proceedings of the Committee of Public Accounts. As he rightly said, there is a need for certainty in waste management market. This project has been considered and planned for 15 years. It is outdated and we do not need to plan for it.
We are told in March that the third extension would be final one granted to Covanta. Enough is enough. A fourth extension has now been granted. The cost of the project alone demands that it is ended. The Dublin regional authority went all out on a bet and the bet did not work. If we continue with this it will cost us hundreds of millions of euros. This problem is not of the Minister's making, it dates back to the time of the former Minister, Dick Roche. The Minister has to intervene or review the project sooner rather than later. We are not generating anywhere near the volume of waste we used to and recycling has been growing sharply and is up to the level of 40% nationwide. We are not in any danger of missing the targets in the EU landfill directives. As the recent EPA report shows, we met our targets for waste diverted from landfill two years ago and that indicates that we will also meet the 2013 targets.
This project is out of date and out of time and it is time for the Minister to act. We should face the fact that this will involve hundreds of millions of euro that we have not got. Therefore, it is time to cut and run. Covanta cannot deliver the funding. We have an opportunity with the break in the contract when it failed to deliver on its timescale and dates. Let us take the uncertainty out of this system.
The Minister knows as well as I do that there are companies on the sideline prepared to step in and develop the recycle and reuse industry. One of our semi-State companies has a planning permission application on hold because it is waiting to see what will happen with this incinerator. We have 900,000 tonnes of waste going to landfill that can be composted, yet we are talking about an incinerator. Investment in the composting element of it would be a far better approach.
This issue has been running issue since 1999 in one form or another. It has created massive uncertainty in the area, even for investment in further development. The time has come to knock heads together and come up with a new plan. We cannot continue to harp back to the past and say we cannot intervene. The former Minister, Deputy Gormley, said it previously. The former Minister, Dick Roche, said he signed the contract and then left office. The ball has been passed to the Minister, and I ask him not to drop it. He should take on the vested interests and stop this contract going ahead.
6:45 pm
Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The difficulty is that we have a contractual obligation which provides legal obligations on the State. We have to be extremely careful in the manner in which we deal with these issues. Otherwise, we will expose the State even further in terms of infrastructure that was contracted but not delivered. All I can do at the moment as Minister for the Environment, Community and Local Government is outline the country's waste policy. I have done that with my colleagues in Government when we were trying to move away entirely from landfill. We are not entirely sure if we will meet our landfill obligations in 2014-15. We are in difficulty in that respect. It depends on economic growth and the type of investment we have in infrastructure in providing alternatives to landfill.
I accept what the Deputy is saying that if we do not get certainty on this project soon we will not be waiting around forever for the purpose of providing alternatives. We have to meet our objectives and the obligations laid down in our targets that are set by the EU in conjunction with Ireland. I hope that we are in a position to get some information in the very near future on whether the company involved, Covanta, and Dublin City Council are in a position to proceed. I am prepared to examine the situation carefully in the next few weeks and ascertain from the contracting parties whether they are in a position to proceed. I cannot say what the alternatives are at this stage until I see what the future holds for this particular contractual obligation that we have but I agree with Deputy Humphreys that we must have certainty sooner or later. I need to have certainty to ensure that I can move on to alternative methodologies of dealing with our waste if this particular option is closed to us.