The deal between Dublin City Council and a private firm to build and operate an incinerator at Poolbeg in Dublin is likely to be abandoned, Minister for the Environment Dick Roche said last night.
Mr Roche intervened in the controversy over the proposed incinerator, which was prompted yesterday by claims by the Tánaiste and local TD Michael McDowell that the project had "collapsed". The claim prompted a swift rebuttal by Dublin City Council, which said the project was "still on track" and would be going to An Bord Pleanála for a full hearing. The council said it was in "negotiations" with the company that had won the contract about a request for new financing arrangements for the facility.
The firm, Elsam, is now owned by Danish Oil and Natural Gas (DONG), who refused to comment on the negotiations when contacted by The Irish Times.
In a statement last night, however, Mr Roche said Dublin City Council had contacted the department earlier this week to state that DONG had sought significant changes to the contract.
He said it was "not open to Dublin City Council to accept the changes and the procurement would need to be terminated and a new one commenced.
"Assuming that the service provider confirms it is unwilling to meet the original conditions Dublin City Council will commence a new procurement process."
He also confirmed that it was he who had briefed Mr McDowell on the development. However, he added that Dublin City Council was still proceeding to An Bord Pleanála with the planning application and to the EPA for a licence to operate the facility.
Last night Mr McDowell said he stood over earlier claims that the plans for an incinerator in his Dublin South East constituency had now collapsed.
He said DONG was now unwilling to provide full financing for the facility, as in the original agreement, but instead would provide financing of just 25 per cent. It had also sought to introduce a new US-based firm, Covanta, to operate the facility.
He said that as a result the "project board had on February 16th agreed that this procurement procedure should be terminated and a new one commenced as soon as possible, and that the city council were advising DONG Energy accordingly."
"Therefore it's fair to say that the agreement has collapsed," he said.
The plant, which will take in up to 600,000 tonnes of rubbish annually, would be the biggest waste facility in the country if constructed. This will include almost all of the waste from households and businesses in the greater Dublin area which currently goes to landfill.
The incinerator has been opposed by almost every candidate in Dublin South East, including Mr McDowell.
In a statement yesterday afternoon, the council rejected any suggestion that the proposed incinerator was in jeopardy.
"The waste-to-energy project for Dublin is still going ahead," assistant city manager Matt Twomey said.
Yesterday, Mr McDowell was accused of being "politically desperate" by local Labour TD Ruairí Quinn, who accused him of issuing a "panic statement not based on any verifiable fact".
Local Green Party TD John Gormley called on Mr McDowell to identify the source of his information.
"Michael McDowell owes it to the local community to clarify where he is getting the information that allows him to confidently announce the collapse of this project, even though as far as Dublin City Council is concerned it's all systems go," he said.