I would like initially to apologise on behalf of our chairman, Mr. Jim Kells, who is unable to attend today. I will brief the joint committee on the Irish Waste Management Association's position in regard to the direction of the waste campaign, a subsidiary item within which is the Poolbeg incinerator, an aspect which not alone affects Dublin, but waste management throughout the country.
I thank the joint committee for giving the association the opportunity to appear before it. The Irish Waste Management Association, IWMA, is a trade association representing the private waste management industry in Ireland. We have 26 members representing approximately 95% of the private waste management sector in Ireland and are affiliated to the Irish Business and Employers Confederation, IBEC, and the European Federation of Waste Management and Environmental Services, FEAD, which is a key element in Europe.
While the IWMA is not opposed to incineration in our presentation we will be outlining our grave concerns with regard to the proposed size of the incinerator at Poolbeg, which we believe is far too large, the impact this oversized facility will have on our sector, jobs and recycling levels, the liability that Dublin householders and taxpayers in general will be exposed to, and the extraordinary level of public moneys that have been spent on this project which, in our view, have been largely wasted. Following our presentation we will be delighted to take any questions from members.
Good environmental practice and business sense dictate that a diversity of technologies should be utilised when dealing with waste that is generated by households and commercial enterprises anywhere in the country. We believe that private waste operators, working in partnership with local authorities nationwide, have made and will continue to make a substantial contribution to waste management in all parts of the country.
Ireland has seen a dramatic rise in waste recovery rates during the ten years to 2008, the period for which the most recent data is available. During this time, household waste recovery has grown from 3% to 28% and commercial waste recovery has grown from an estimated 18% to approximately 50%. These dramatic improvements have coincided with an increased involvement by the private waste sector in providing sustainable and cost effective waste management solutions. Private waste operators have invested in new and innovative technologies that have driven and delivered on increased recycling rates and have offered a better, more efficient and more cost-effective service to the consumer. Some 12% of households in Dublin have in the past two years switched to private waste collectors and 90% of commercial waste producers utilise private waste contractors. Countrywide, 55% of domestic waste is collected by private operators. Most of the country's commercial waste is collected by private waste operators.
I would like to highlight a situation which arose in the Dún Laoghaire-Rathdown local authority area in 2007. When private waste operators entered the waste management market in this area, two IWMA members offered a waste collection and management service to householders that was up to 24% to 25% cheaper than the incumbent local authority. Given our members were charging VAT, which was not being charged by the local authority, we were in real terms almost 40% cheaper. We employed better and more environmentally friendly technology, offered better recycling of an expanded list of materials including glass and WEEE previously catered for within the green bin, and we offered increased recycling collection frequency resulting in the achievement of higher recycling rates. As reported in The
Irish Times on 3 October 2008, Mr. Owen Keegan, county manager of the Dún Laoghaire-Rathdown local authority stated in a letter to councillors that private sector operators offered a significantly better service at lower cost to households than the authority. In short, this was a win-win case for householders and for the environment. Similar examples can be found in many other locations across Ireland. That was also backed up by Mr. Justice McKechnie’s ruling in the High Court.
The proposed Poolbeg incinerator threatens the positive consumer and environmental developments that Dublin has witnessed in achieving waste management goals. It also will impact on infrastructure throughout the country as it tries to fill its massive capacity. The four Dublin local authorities, led by Dublin City Council, propose to construct an incinerator at Poolbeg which will have a capacity to burn 600,000 tonnes of waste per annum. In late 2009, the IWMA commissioned an independent environmental consultancy, SLR Consulting, to undertake an independent review of the level of waste that would be available for the Poolbeg incinerator assuming realistic growth rates and recycling rates. The findings of this research — it is available on the web — show that from this date until 2037 the level of waste available tor incineration at the facility at Poolbeg will never exceed 300,000 tonnes per annum, based on EU established growth criteria.
The incinerator proposed for Poolbeg is, therefore, grossly oversized relative to the available waste market. The IWMA cannot understand why the size of the incinerator has increased to a 600,000 tonne capacity when the initial tender called for by Dublin City Council was for a facility with a maximum size of 400,000 tonnes. Building an incinerator with an excess capacity of more than 300,000 tonnes will have a significant negative effect on waste management in the Dublin region and further afield.
The facility will hurt recycling rates. Once commissioned, the oversized incinerator will only perform one function. Every day for 25 years it will burn waste, and fuel must be found to feed the facility. To operate at capacity this incinerator must suck up waste that private operators are currently recycling, and also future material that can be readily recycled using alternative technologies that is currently found in the black bin from across the Dublin region and other parts of the country. This will have a negative environmental impact and reduce the positive gains already achieved. I suspect it may give rise to us missing the recycling level targets set by the EU.
In recent years private waste operators invested in a range of new technologies to manage waste. Our members invested more than €500 million in the past ten years developing facilities here. These options include mechanical and biological treatment and more efficient and effective recycling. The proposed incinerator is so oversized — relative to the available waste market — that it will dominate the market, driving other operators out of business and making other technologies obsolete. This would be a significant backward step in terms of reuse and recycling which are higher order activities in the waste hierarchy above that of incineration.
As part of their investment in new technologies for waste management, waste operators now employ thousands of people in collection, sorting and processing all types of waste. The Poolbeg incinerator will be so dominant that, if constructed at its proposed scale, it will wipe out alternatives to incineration, turning waste management operators into waste couriers who simply will collect and transport the unsorted material to Poolbeg. This will inevitably lead to job losses. We suspect 1,000 job losses directly, and probably another 1,000 outside of that — in total, 2,000 more jobs gone.
In common with most of the rest of the country, the waste market in Dublin is becoming competitive and this has benefitted consumers, the environment and employment. These benefits are threatened by an oversized Poolbeg incinerator.
In addition, the IWMA believes the taxpayer is at considerable risk from this project. Dublin City Council has entered into a contract whereby it has guaranteed to supply 320,000 tonnes of waste to the operators of the Poolbeg incinerator. If this level of waste is not reached then the local authority must pay compensation that, we understand, may be in the order of €80 to €100 per tonne. This has resulted in the Minister for the Environment, Heritage and Local Government estimating that the taxpayer may have to pay up to €18 million in penalties for every year the incinerator is in operation. This would amount to €450 million over the lifetime of the project and we consider this to be total madness.
This could be examined in more detail if Dublin City Council released in full the details of the contract it has entered into with Covanta and Dong Energy. However, to date the local authority has refused to do this, and will not even release the contract to the Department of the Environment, Heritage and Local Government which has responsibility for waste. A contract of such importance to the taxpayer should be open to scrutiny. What secret is being hidden by not releasing this contract and its details?
Based on its scale, this incinerator must draw waste from outside the Dublin region. The ongoing costs will be underwritten by the Exchequer and the taxpayer. However, the officials in Dublin City Council are only responsible for the Dublin metropolitan area, and yet the plant they are developing will have a national impact. Given the consequences this facility will have on a national level, it is astonishing that the contract continues to remain shrouded in secrecy under lock and key in Dublin City Council.
While these costs represent a huge risk for the taxpayer, the IWMA also believes the expenditure already committed to the development of the Poolbeg incinerator should be examined in more detail. The Dublin city manager recently stated that the local authority has spent €120 million in the development of the Poolbeg incinerator to date. This expenditure does not include plant equipment or building construction and at this stage the site is empty. The IWMA is astonished that Dublin City Council could have spent €120 million on what is effectively an empty site. As a point of reference, an IWMA member company is in the process of developing an incinerator which will be completed within the next two years and has cost the promoter the princely sum of €6 million to get to the same stage as Poolbeg for a similar facility, that is, 20 times less than the spend to date by Dublin City Council.
Of the €120 million expenditure thus far, €22 million has been spent on professional and consultancy fees on the project. It has been reported that one firm, RPS received a significant proportion of these fees. This is the same firm which was employed as consultant in the development of the Dublin waste management plan and the initial strategy identifying incineration for the Dublin region. This firm has also been put forward by Dublin City Council to justify the incinerator development in recent days even though it has a considerable financial interest in the Poolbeg incinerator proceeding. This is quite inappropriate on the part of the local authority which is responsible to the taxpayer, not its consultants. The IWMA therefore views the €120 million spend as an example of the cavalier and wanton waste of taxpayers' money by Dublin City Council. If the Poolbeg incinerator continues in its current form then further hundreds of millions of euros will be spent in the development of a facility which is not appropriate for our city and which will do untold damage to recycling in Dublin for generations.
The IWMA has lodged several complaints with the planning enforcement division of Dublin City Council as we believe the local authority has not complied with a number of planning conditions. These conditions were set by An Bord Pleanála and should be policed by Dublin City Council. We do not believe IWMA members would get away with this attitude.
The IWMA has also lodged a formal complaint with the European Commission as we believe the guarantee to provide a minimum of 320,000 tonnes of waste annually to the Poolbeg incinerator amounts to a State aid. We have requested that the European Commission examine this aspect of the agreement. In addition, we believe this State aid allows Dublin City Council, with Covanta and Dong Energy, to exploit the market at marginal cost driving competition out of the market before again increasing prices during the tenure of the contract to the detriment of consumers. As is obvious from other monopolised markets, one large player will eventually profiteer at the cost of the consumer.
It is worthwhile noting that Mr. Justice McKechnie found against Dublin City Council in a judgment delivered on 21 December. In this case, which involved an IWMA member company, Mr. Justice McKechnie found that Dublin City Council had abused its dominant position in the capital's waste market and based on his judgment, also said that the planned Poolbeg incinerator was "not free from uncertainty". I will quote from the uncensored, unapproved document I have here. It states that "in the course of the hearing a number of draft reports prepared by RPS and Dr. Francis O'Toole were handed up to the court, which contained comments written by the respondents indicating which parts of earlier drafts were acceptable to them, and either deleted or reworded those parts which would not have supported their position". He goes on to say that "such massaging of reports which were in their edited versions later released publically is a strong indicator to me of unacceptable influence in a process supposedly carried out in the public interest". We suspect this is simply the first tranche of massaging that has been done. What other massaging may have occurred in respect of getting to this point? That is a critical item for us.
Proceeding with this project in its current form entails serious, long-term, negative consequences for waste management, Dubliners and for taxpayers throughout this country for at least the next generation. Therefore, the IWMA urges that this committee examine this project in detail before any further moneys are squandered on a development which, simply put, is not fit for purpose.
