The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A waste-to-energy provider yesterday said there was “no way” that Renew Bahamas could generate enough revenue from waste recycling to finance the New Providence landfill’s remediation.

JP Michielsen, Stellar Energy Group’s chief operating officer, told Tribune Business that the landfill manager’s call to re-negotiate its five-year contract with the Government proved waste-to-energy was “the only viable” economic solution for the facility.

“We’ve said this from day one,” Mr Michielsen told Tribune Business. “The only viable option as far as the economic side, the true value, is if it [the landfill] goes to waste-to-energy and compacts the materials sitting there as fuel. It’s the only way to have a more viable business there.”

He suggested that Stellar’s proposed $650 million waste-to-energy plant, an offer to the Government that remain on the table, could happily co-exist at the landfill with Renew Bahamas’ materials recycling facility.

Pointing out that recycling was key to generating the ‘fuel’ used by waste-to-energy plants, Mr Michielsen added: “We have no problem working with Renew as they well-versed in the recycling side. We can co-exist and share this site with Renew Bahamas.”

He argued that a waste-to-energy plant, supplying electricity to the newly-formed Bahamas Power & Light (BPL), was the only way that the New Providence landfill could generate sufficient revenues and cash flow to cover the costs associated with remediating the 100-acre site.

A waste-to-energy plant, apart from dealing with a significant volume of incoming waste, much like Renew Bahamas’ materials recycling plans, would also consume suitable ‘fuel’ materials already on-site. This, in turn, could help to reduce the recurring fires impacting surrounding businesses and communities.

“That would cover all costs related to remediation and sanitation,” Mr Michielsen told Tribune Business of a waste-to-energy plant.

“Right now, there is no way Renew Bahamas can break even with the amount of money they’re getting from recycling. I know that because I’ve run the numbers thousands of times.

“If they are mandated to manage and remediate the landfill, it is absolutely imperative for them to break even. Stellar has always said the only way a viable business can operate is if it involves waste-to-energy.”

Stellar Energy’s $650 million waste-to-energy proposal was knocked off course by the well-publicised ‘Letter of Intent’ (LOI) controversy, which ultimately resulted in the resignation of former parliamentary secretary in the Ministry of Works, Renward Wells.

Despite subsequently receiving little to no encouragement from the Christie administration, it has stubbornly refused to quit, and remains ‘in the game’ where the landfill is concerned.

Stellar Energy will also have received a confidence boost from this week’s developments, with Renew Bahamas seeking to re-negotiate a contract costing it “millions of dollars” in losses.

The Government, for is part, has hired an accounting firm (see other article on Page 1B) to assess Renew Bahamas’ financial condition and projections, and determine whether the company’s demands are justified. It is also shopping around for alternatives in case the relationship with Renew Bahamas breaks down.

While Mr Michielsen’s remarks may seem self-serving, other groups who had an interest in managing the New Providence landfill had previously told Tribune Business much the same - that they could not see how Renew Bahamas’ recycling venture could generate the necessary revenue to do all that was required at the facility.

The Waste Resources Development Group (WRDG), the four-strong Bahamian consortium featuring Bahamas Waste, Impac, Wastenot and United Sanitation, always believed that a waste-to-energy solution - or something similar - was required for the landfill. It is understood that they received this advice from their UK engineering consultants, Mott McDonald.

The Government, though, has to-date resisted a waste-to-energy solution for the landfill. Kenred Dorsett, minister of the environment and housing, in a recent release said the BEC reform process meant such a facility was ‘off the table’ when proposals for the management contract were being assessed.

Tribune Business understands that waste-to-energy is still not in the Government’s thinking with regard to the landfill, even though PowerSecure has now been selected as BPL’s management firm, with a mandate to explore renewable energy options.

Gerhard Beukes, Renew Bahamas’ president and chief executive, has also previously expressed doubts about the feasibility of waste-to-energy, arguing that not enough is yet known about the landfill’s waste streams to determine whether the correct ‘fuel’ is present in sufficient quantities.

Mr Michielsen. meanwhile, expressed amazement at Mr Beukes’s admission that numerous factors “unknown” to Renew Bahamas now meant the company realised its original model, business plan and financial projections were invalid.

“Don’t you think you would do due diligence and FEED (front-end engineering design) studies yourself before a major deal is signed?” Mr Michielsen asked.

“I don’t understand how somebody could go into a long-term contract not knowing what the ‘in’s’ and ‘out’s’ are, and what the true needs are.

“I don’t understand Mr Beukes’s comments on that point. That’s just bad business on Mr Beukes’s part.”

In fairness to the Renew Bahamas chief, Tribune Business was present last year when he addressed a Bahamas Society of Engineers (BSE) meeting, in which he sought the advice of locals and their expertise on the many “unknowns”.

He conceded that the company did not know everything, especially given that the New Providence landfill has been a problem at least 40 years in the making. Its size also means that getting a handle on all its problems takes time.