Is this a contract with the devil?

Posted June 23, 2012

Janet Laird, Executive director of Planning, and Building, Engineering and Environment informed Ward 1 Coun. Jim Furfaro of the cost of the 900 tonnes of wet waste from Hamilton.

You remember the stuff had to come from Hamilton, why?

Doesn’t Guelph have enough of the wet waste to feed the operational test to begin in July? Guelph’s wet waste collected in plastic bags is a no-no.

Consider that the amount of wet waste coming from Waterloo also does not meet the feedstock requirement for the crucial test. The test will determine if the plant meets the capacity level contained in the contract.

So, here’s how it works. AIM Environmental, general contractor Maple Reinders’ division, in charge of negotiating supply contracts, is paid $79 a tonne to deliver the Hamilton waste to the compost plant. However, the real cost is a $60 per tonne tipping fee paid to the city.

So the cost of this test, experiment, or whatever, to the city is $17,100.

Why is the city paying anything to confirm the plant is meeting its operating projections according to the contract? It is up to the contractor to deliver a plant that meets the terms of the contract.

Apparently not, as this break-in period has lasted 10 months.

To put it in plain terms, the cost of carrying a $33 million project is $1,650,000 per year at five per cent.  During the time this plant has not performed since last September it has cost an estimated $1,370,500 in interest.

Are we getting nickel and dimed because the contract to build the plant was mishandled and oversight ignored?

The reasons for bringing waste from Hamilton for this test is unclear.

It fits into the murky world of the real operating costs of this $33 million project. The city has steadfastly refused to disclose the operating costs of the plant once it is fully operational.

It has been estimated the real cost of operating the plant is $340 a tonne. That’s a long way from $79 a tonne for tipping fees.

Then Ms. Laird revealed the terms of the contract to receive wet waste from the City of Waterloo.

The contract called for Waterloo to deliver 20,000 tonnes of material to the plant.

AIM, the general contractors sales arm, negotiated the deal and it contains a “put or pay” clause. This requires Waterloo to pay for 20,000 tonnes whether they use it or not.

Here’s the stickler. Waterloo is only able to contribute 10,000 tonnes currently. The “put or pay” clause doesn’t kick in until next year.  It seems the supply of feedstock is uncertain and the City of Guelph must guarantee the required flow of wet waste to the plant.

And that supply contract is held by AIM Environmental, not the city.

Here’s the kicker:  The city is contractually obligated to supply adequate tonnage so the plant can operate at full capacity. And to whom are they obligated? Aim Environmental, the subsidiary of Maple Reinders and operators of the compost plant..

It appears that Maple Reinders has a grip on the compost plant that taxpayers own but cannot control.

It’s time for the city to reveal all the terms and conditions of this multi-corporation waste management contract. Burying the details among a select group of elected and non-elected officials is close to demanding an independent inquiry.

What are the plans to dispose of the tonnes of composted material the plant is supposed to manufacture?

Here’s a suggestion. When the automated waste pick-up truck comes down the street emptying the curbside bins, another truck follows and fills the bins up with fresh compost.

Soon Guelph would be the most composted city in the world. Another first!

Miz Laird, you have some ‘splainin’ to do.

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1 Comment

Filed under Between the Lines

One response to “Is this a contract with the devil?

  1. paulphelan

    The current council for the most part and the mayor are all wet waste are they not?????

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