Poolbeg flames out

It has emerged that the chief executive of the NDFA, Brian Murphy, wrote to Dublin City Council city manager John Tierney earlier this year informing him that the approval was “null and void”, and that a new set of approvals would have to be obtained for the project to go ahead. The project has been beset with problems over the past 18 months, with the US energy firm Covanta admitting that it was struggling to obtain project finance to build the 600,000-tonne waste-to-energy incinerator. The US company is an equal partner in the venture with Dublin City Council, which has already spent EUR 81 million on professional fees and land acquisition as part of the project.

The NDFA informed the Dáil’s spending watchdog, the Public Accounts Committee, of the move last week. The agency took the decision given the changes which have occurred in the structure of the deal between Covanta and Dublin City Council in recent times. Fine Gael TD Eoghan Murphy said that, in light of the NDFA’s decision, there was “no longer a guarantee that this project is value for money”, and that the requirement for a new value-for-money approval would raise significant questions about the scheme. Dublin City Council said it could not comment. Meanwhile, the state’s local government audit service (LGAS) has said it will probe a EUR 10.1 million overspend by Dublin City Council on a land-swap deal related to the Poolbeg project. The local authority paid more than EUR 22 million to a civil engineering contractor to construct new premises for Westway Terminals Hibernian Ltd, which was moving from its original site in Ringsend to facilitate the development of the incinerator.

However, it later emerged that the council had originally agreed to pay just EUR 11.9 million for the work. An audit carried out by the LGAS has discovered that the local authority “did not procure their own consultant but relied on reports and invoices produced” by Westway’s own consultants. The consultants were appointed in an agreement between Dublin City Council and Westway, according to the LGAS. The total cost of relocating the firm from its one-hectare site came to EUR 31 million. The LGAS has now requested a “detailed report outlining the reasons for the difference between the original tender and the final account”.

Source: Sunday Business Post

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