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Waste Management.

Dáil Éireann Debate, Thursday - 22 February 2007

Thursday, 22 February 2007

Questions (7, 8)

Oral answers (60 contributions) (Question to Minister for the Environment, Heritage and Local Government)

I will call on the Deputies who tabled questions to the Minister for the Environment, Heritage and Local Government regarding the proposed incinerator at Poolbeg in the order in which they submitted their questions to my office.

Ruairí Quinn


Mr. Quinn asked the asked the Minister for the Environment, Heritage and Local Government whether he has been informed by Dublin City Council that the company that has been awarded the contract to build a waste to energy incinerator plant at Poolbeg, Dublin, has informed Dublin City Council or his Department that it will not proceed unless new financial terms are agreed; and if he will make a statement on the matter.

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John Gormley


Mr. Gormley asked the asked the Minister for the Environment, Heritage and Local Government the Government’s position on incineration and, in particular, the proposed incinerator for the Poolbeg peninsula; the status of the procurement process; if, in his view, Dublin City Council can proceed with the incinerator, which up until now has been supported by the Government; and if he will make a statement on the matter.

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I propose to take both questions together.

I thank the Deputies for raising this issue. The waste to energy plant concerned is being procured as a public private partnership, PPP, by Dublin City Council acting on behalf of the four Dublin local authorities in the context of the regional waste management plan for which the relevant local authorities have statutory responsibility.

As Members are aware, this project is the subject of applications by Dublin City Council for planning permission and a waste licence. These are matters for An Bord Pleanála and the Environmental Protection Agency, respectively, which are statutorily independent in the exercise of their regulatory functions.

Given the intention to use a public private partnership to deliver the project, my Department was required, in line with public policy, to be satisfied that the procurement process was properly conducted in accordance with national and EU requirements and this was done. Signing off on the public private partnership constitutes the extent of the Department of the Environment, Heritage and Local Government's involvement in this regard.

On 19 February 2007, Dublin City Council informed my Department that, following a change in ownership, the selected service provider for the project has been seeking significant changes in the financial and commercial terms originally agreed. As these changes would not comply with the terms of the original procurement under the strict conditions required by the PPP process, it is not open to the council to accept the changes and the procurement should be terminated and a new procurement process commenced.

My Department understands that the council is informing the service provider of its position at a meeting tomorrow morning. Dublin City Council will continue to have responsibility for taking the project through the planning and waste licensing processes already under way.

It remains the Government's policy to support local authorities in implementing the internationally accepted approach to waste management. This embodies a waste hierarchy in which waste prevention, reuse and recycling are the primary objectives and thermal treatment with energy recovery is preferred to landfill for the management of residual waste. The siting of any individual installation is not a matter in which the Government plays a role. As Members are aware, that is a matter for the local authorities promoting a particular project. Site selection is very much a matter for the sponsoring authority and is not a matter which is either cleared with, or promoted by, the Government.

I wish to ask the Minister a number of questions. May I take it that Dublin City Council, as the sponsoring local authority on behalf of the four local authorities, will be required to terminate the existing contract with Elsam and that, consequently, the comprehensive planning process in train will be aborted and we will be obliged to start all over again? Do any implications for financial confidentiality arise from the fact that the Minister informed the Tánaiste and Minister for Justice, Equality and Law Reform of this matter? He in turn announced the collapse of the project. Does the Minister consider that he acted responsibly in this regard and would courtesy not have required him to inform all the public representatives?

Can he explain why, as recently as approximately 4 p.m. yesterday, Mr. Matt Twomey, the assistant city manager with responsibility for the management of this project, informed the media that the project was going ahead? Given the comments of the Minister and Mr. Twomey, may I take it that, notwithstanding the collapse of this particular contract, Dublin City Council, while acting at the behest of the Government, is committed to providing an incinerator on the Poolbeg site?

I will respond to the Deputy's questions which encapsulate the core issues in this regard. As Deputy Quinn is aware, the PPP process is highly specific, detailed and case-specific on an individual basis. Once a PPP process has been entered into, there is very little latitude, which is proper and appropriate. The Department's role is to ensure that PPP compliance is in place and after the submission, as the Deputy is again aware, the National Development Finance Agency provides the necessary financial certification. In the circumstances that present themselves to Dublin City Council, unless something dramatic was to happen overnight, the project and Elsam, or rather the Danish oil consortium which has effectively taken it over, will be out of the picture. Once a project is certified as being in compliance with the PPP, all the arrangements pertaining to that project must be continued. Otherwise it constitutes a different set of situations.

As for whether the planning process will be aborted, that does not necessarily follow. As the Deputy is aware, the planning process pertains to a project rather than to its financial elements. Similarly, the Environmental Protection Agency processes are quite separate from the PPP process.

As for informing a fellow Minister, I find it astonishing that I should withhold information from anyone. Had Deputies Quinn and Gormley or any other Member asked me what was the position, I would have provided them with the up-to-date information.

How were Members to know?

I have always been forthcoming to Deputy Gormley and other Members. I believe in being open and that would have been a reasonable process.

Does the Minister honestly expect Members to believe the Tánaiste had so much time on his hands in the past three days that he decided to give the Minister for the Environment, Heritage and Local Government, Deputy Roche, a call to ascertain what was happening in respect of the incinerator?

That is what happened, more or less.

Coincidence or not, as it happens I was talking to the Tánaiste on an entirely unrelated project.

While I believe the Minister, millions would not.

That is somewhat unfair. Deputy Quinn knows me sufficiently well to know that had we been engaged in conversation together, I would have shared any information I had with him. I do not believe that would be improper and that it would be bizarre not to so do.

As for Mr. Twomey's comments yesterday, the city council will hold its final meeting tomorrow morning with Elsam, or its successor company, DONG — a most inappropriately named company — which appears to have a different focus. The process will not be completed until that meeting is held. However, I would be less than frank with Members were I to suggest that I believed something will change between now and tomorrow morning. The reality is that Elsam, the financial partner, and its successor, Danish Oil and Natural Gas, DONG, have sought significant changes. As they are not in line, it would not be appropriate for those changes to be agreed. Therefore, I see the financial package put forward. Where does that leave us? It is open to Dublin City Council to seek another partner.

Let us get this very clear; clarity is absolutely necessary because we are dealing with local people who have legitimate fears about this project. Is the Minister stating the oral hearing which is part of the planning process and the EPA licence process can go ahead? Is it the case that the council can seek other partners subsequently? Can planning permission and a licence be given and new contractual arrangements entered into subsequently? The impression given yesterday by the Minister for Justice, Equality and Law Reform was that the incinerator project was not going ahead. From what the Minister for the Environment, Heritage and Local Government stated today, that was a misleading impression. The statement by Mr. Matt Twomey that it was still on track was far more accurate. Will the Minister tell us whether the planning process and EPA licence process are going ahead?

I presume the Deputy knows the planning and EPA processes which are entirely stand-alone and independent are in no way related to the financial side of any arrangement.

Yes, they are.

No, they are not. In this particular——

Under the PPP, they are.

In this particular——

The risk is with the applicant — Elsam, not Dublin City Council.

The Deputy and I know that An Bord Pleanála and the EPA will not look into that aspect of the project.

Regarding what Mr. Matt Twomey stated yesterday, as I stated, he was carefully reflecting the precise position because until such time as the meeting takes place tomorrow at which the company which succeeded Elsam is finally told the position, it is still theoretically in the deal. The company has stated it is not able to meet the terms of the PPP and the reality is that it will be out of the PPP tomorrow morning.

The point I made is that I want clarity. If the company seeks arrangements which are not to the satisfaction of Dublin City Council, can the planning process and licensing process go ahead? That is the question.

I wish to add a supplementary question in the interests of efficiency. Is it correct to state the application was made by Elsam, not Dublin City Council? Under the PPP process, Elsam takes the risk of the conditions which might be imposed by An Bord Pleanála and the EPA. Tomorrow, if it emerges the new owner of Elsam has decided not to proceed with the contract, what will be the point of proceeding with the planning process which will cost taxpayers and individuals a lot of time and money? Surely it is aborted and we must go back to the drawing board on whatever facility might be located somewhere in the Dublin region.

Will the Minister confirm the workability of public private partnership schemes? Is it true they have become extremely intricate from the point of view of private participation? Has this intricacy impacted in any way on this enterprise and proposal? With the points raised by Deputies Quinn and Gormley, I wish to ask the Minister as a matter of curiosity in what context did he convey to his colleague in government the perceived outcome of the project at the time and what was his reaction? Was he disappointed? Was the Minister disappointed? Did they slap each other on the back and say it was wonderful?

I do not ask the Minister to divulge Cabinet secrets. Other colleagues would have been equally interested in the outcome. I ask for my own reasons. I detected a certain reluctance to answer questions on a different matter to which I drew the House's attention this morning.

I wish to return to the point made by Deputy Gormley because it is important to have clarity. It is a major project which raised serious concerns in the local area. A huge number of people object to it. Many of us questioned placing the incinerator in the locality because of all the traffic it would bring to the area. It is important there is absolute clarity within the next 24 hours and that the Minister, the local authority, public representatives, the general public and residents understand exactly what is happening and where they stand. If Elsam pulls out, considering the local authority spent so much time and effort on the project, does the Minister know whether it can be compensated for all the money spent on the project to date?

To make it easy, what I want to know is this. Can the planning and EPA licence processes be continued if Elsam pulls out?

I will take the points in sequence. Regarding the planning process, Deputy Quinn asked an important question. I understand Dublin City Council is the planning applicant and promoter of the project. It chose the site. As Deputies know, the Department does not have a role in that issue. I was careful throughout the debate not to make a comment on the site. Neither did I make a comment germane to the planning process because, as the House understands, as Minister, I cannot become involved. It would be wrong for the Minister of the day to involve himself or herself in commentary on an ongoing planning process. I do not wish to mislead the House in any way. I understand that unless Dublin City Council withdraws the planning and EPA applications, they will proceed and can proceed. They are not in any way tied to the financial arrangements.

Regarding the question raised by Deputies Gormley and Eoin Ryan, to be absolutely clear, Dublin City Council reached its arrangements with Elsam after the PPP process. Once the project was certified to be in compliance with the PPP process and having received the necessary clearance, the city council went to An Bord Pleanála and the EPA for a license. The council still has the prerogative to pursue both matters. The questions were fairly put and I want to be fair and clear in my answers.

In parallel, Elsam and the council had discussions on the financial side. As we now know, Danish Oil and Natural Gas, DONG, took over Elsam. It is a completely new corporate entity and does not share the same core focus as Elsam. If it wanted to progress with the project, it would require significant changes. Those changes are not possible under the PPP process. That is what Dublin City Council will notify to the company. In the circumstances that will arise from tomorrow's meeting, the council will have little option but to judge that, acting on the advice of the client's representative for the PPP, it will have to inform the successor to Elsam that it cannot make those changes.

To return to the question asked by Deputy Durkan, Members of Cabinet speak to each other all the time. It would be rather bizarre if, when members of the Cabinet are speaking to each other, they do not converse on matters of topicality. I find the question strange.

I do not find it strange it all.

I do not know what the Deputy is referring to from this morning but it was not in this context, as far as I know.

It might be.

It would be very strange if Cabinet members did not speak to each other on issues of mutual interest. As the conversation was on the telephone I was not slapping the Tánaiste's back, nor was he mine.

It is just as well the Minister did not try it on the telephone.

It is clearly a case of a single-party Government.

I thank the Minister for his reply. I will be going back to constituents, as will Deputy Quinn and others. The Minister can correct me if I am wrong but can we now state clearly to them that the planning process and the licence application can go ahead as is? Are there commercial arrangements that may be changed as a result of tomorrow's meeting? Can they now look for new commercial arrangements or even a new partner? Is that the case? The Minister can answer by indicating "Yes" or "No."

There are three separate questions and "Yes" is not the answer to all three. It is not possible to answer all of them either in the affirmative or the negative. The planning and EPA processes are independent processes which have started and can proceed.

They can proceed.

I will not speculate on whether the agency which promoted them will withdraw.

With regard to the second question, I have made clear the point about the public private partnership process. Deputy Quinn would understand my point but Deputy Gormley does not have that experience. I do not state this in a patronising way. The PPP process is very exacting, and properly so. If any significant change is made in the process, the promoter body of the process — Dublin City Council in this case — has no option but to indicate to its partner that the issue cannot be agreed. In those circumstances, Dublin City Council may seek another partner.

Deputy Durkan asked another question unrelated to my slapping the Tánaiste on the back.

I asked about the intricacies of the public private partnership.

Yes, it was a fair question. Such a partnership is very intricate because the process, by its nature, requires that a decision be made under a specific set of circumstances. It is therefore appropriate to be pedantic in terms of the fulfilment of all the detailed requirements of the PPP.

The point being made by the Deputy was whether there is much flexibility in the PPP, as there is in other types of contracts. It would be fair to state there is not. The PPP process is a very exacting process which must go through various clearances. An agreement is made between the partner — the public body promoting the project — and the other institutions or developing bodies involved. It is a necessarily complex process that does not allow for any large degree of flexibility once the process has commenced. It is fair to say that is the case.

The Minister can correct me if I am wrong but my understanding is that the original tender invitation was for a design, build and operate PPP process. I take the Minister's word that the formal applicant was Dublin City Council, but the specification and design of the plant was the responsibility of Elsam because Dublin City Council does not have that capability. I am trying to think this through.

I see the point being made by the Deputy.

If the process goes ahead to a specific design and build specification, whatever about the commercial operation, is the Minister indicating that Dublin City Council will have a specifically designed plant parented by a company that has now basically abandoned it? Will Dublin City Council have the responsibility of offering this out for auction or tender to a yet to be determined operator which would be asked to come in to run a plant which it had no part in designing or specifying? Does the Minister seriously believe the market will respond to this?

One of the first of my points was that the planning process surely had to be aborted if the synergies implicit in a public private partnership were lost. This is where bodies are invited to tender for a design, build and operation process, with people having control over the design and the ability to see the economies of its operation. If I understand the Minister correctly, he is saying that Mr. Matt Twomey can get planning permission for a plant designed by a certain company, which has now gone off the pitch, and proceed to offer this for tender by anybody to operate the plant on that basis.

We may need time to reflect on this and I do not necessarily expect the Minister to have all the information. If that is the case we could end up with nobody tendering to run somebody else's child. We could end up with An Bord Pleanála and the EPA, among many others, wasting much time proof-reading something that will never fly because there will never be a new pilot to fly it.

Can the Minister find out what the case is? It will be clarified if tomorrow's outcome is as the Minister anticipates. I know he cannot comment on that.

If it comes to the point of Elsam walking away, then it is back to the drawing board. We should not waste more money. An Bord Pleanála personnel are up to their tonsils trying to deal with major infrastructure and it would be the height of irresponsibility to allow this project to proceed in the knowledge that it would never fly.

Would the Minister agree that he would be better able to answer these questions in 24 hours than now? Clearly a meeting tomorrow will clarify many of the points we are trying to raise tonight.

As a relative outsider having some passing interest in such matters, my immediate reaction, having listened to the Minister's replies to various questions, is that I would not be as conclusive on what is likely to happen. Did the Minister convey to his ministerial colleague some other information that we do not know about which would have led him to a conclusion? Did the Minister and the Tánaiste come to a conclusion between themselves? We have a facility in my constituency.

This is political points scoring.

It is a very good point.

It is not.

It is, and the Deputy might be interested in it as well. I remind the House that I have a passing interest in a similar case, as my constituency provides facilities of a similar nature for the greater Dublin area. Landfills are causing some problems currently.

The Deputy's constituency will have to take much more.

I assure the Minister we will not be taking very much more. We have had our quota.

I have a specific question. The Minister stated today that the public private partnership process is very exacting and case specific. Is it also site specific?

I do not want to speculate on what will happen tomorrow. Deputy Quinn has put the points very fairly to me but it really would be no more than speculation, which would be unhelpful, and I wish to deal with facts.

I agree with Deputy Durkan that there is a problem, or even a crisis, with waste in this country. Although we have acted phenomenally through recycling and reduction etc., we still have millions of tonnes in residual waste. If it is not to be dealt with by thermal treatment, it will go to landfill, the worst of all options. I agree with the Deputy on that.

Deputy Gormley asked whether the issue was site specific, but in this case the planning and EPA application was site specific.

I was asking whether the PPP was site specific.

I am not being flippant, but whether the PPP is site specific is not the issue.

It is. I am asking the question.

The PPP is site specific because this case is mentioned.

However, the issue is not whether the PPP is site specific, but whether the planning is site specific and who will comprise the financial elements.

The Minister signed the PPP.

On that point, Deputy Gormley and his party are used to throwing out remarks that become the truth if they are not denied. The Deputy knows as well as every Deputy that the Minister of the Department responsible for the agency proposing the PPP merely ensures that the PPP falls within the criteria. If the Deputy wants to be truthful with his constituents, he will not mislead them on that fact.

Site specific.

Written Answers follow Adjournment Debate.