DUBLIN’S POOLBEG incinerator is facing further delays following an admission by Dublin City Council that it will be unable to make a decision on the future of the project next month.
Assistant city manager Séamus Lyons said it was likely the decision would be deferred until next year, despite the council “continually exhorting” the developers to proceed with the project.
The contract between the council and the plant’s developers, US waste firm Covanta, has been “under review” since September 2010, following the failure of the council to meet all its conditions.
The review was to be completed by May 2nd last, but the council in April said it would wait until after Minister for the Environment Phil Hogan had made his decision in relation to levies on incineration.
In July Mr Hogan dropped the levies on incineration proposed by his predecessor John Gormley which would have made the incinerator unviable. However, the council decided it would not make a decision on the future of the plant until November, but hoped to resume construction before the end of the year.
Mr Lyons has said this is no longer a realistic prospect, due to difficulties Covanta was having securing finance for the project.
Construction of the incinerator began in December 2009 but was suspended in May 2010 due to the failure of the council to secure a foreshore licence for a water cooling facility for the plant.
Under the terms of the agreement with Covanta the council could not force the company to develop the plant from its own finances if certain conditions, including securing the foreshore licence, were not met by September 4th, 2010.
“When the opportunity for them [post-September 2010] to say they would only proceed when they were able to secure borrowing for the construction, they jumped at it,” Mr Lyons said in a briefing document to councillors.
Covanta was in discussions with its banks with a view to securing a loan to fund a proportion of the construction costs, Mr Lyons said, but this was proving difficult because of “the situation with banks lending generally and more specifically lending for projects in Ireland”.
Even if the banks were willing to lend at the moment, the uncertainty in terms of regulation and legislation around waste generally in Ireland over the last three to five years has caused the banks to be “extra cautious” he said. “As things stand, therefore, we are continually exhorting them to resume construction but it is unlikely that it will happen till next year.”
Fine Gael councillor Paddy McCartan said the development of the plant was looking increasingly unlikely. “Nothing is going to happen in the near future to make the banks more likely to lend money, particularly in the absence of primary legislation. And one has to question whether a plant designed 10 years ago should go ahead even if the money is in place.”
