Waste projects will be financial debacle: critics
Building separate centres on island makes little sense, they say
The mantras of city officials for the past decade that Montreal must treat its own organic waste within the boundaries of the island and that it must build waste processing centres in different neighbourhoods for the sake of “geographic equity” will lead to a financial debacle for Montreal, critics are predicting, as the city prepares to award contracts for the first three processing facilities.
A clause in the call for tenders for the first three centres is also being blamed for discouraging competition.
“There’s no question that it leads to far higher costs,” former Westmount mayor Peter Trent said Thursday of Montreal’s choice to build two composting centres, two biomethanation centres and a pretreatment centre in four locations in the eastern, western, northern and southern parts of the island rather than build one large facility off-island. The project, financed by all municipalities on the island, has been in germination since 2008.
As the Montreal Gazette revealed two weeks ago, the city received a single bid for an omnibus contract to design, build, operate and maintain a composting plant in Rivière-des-Prairies—Pointeaux-Trembles borough and a single bid to design, build, operate and maintain a biomethanation plant in Montreal East.
The sole bidders on those two contracts are the only competitors for a contract to design, build, operate and maintain the third facility in St-Laurent, a composting centre.
The city hasn’t declared the winners yet. It’s unknown whether the selection committees that are evaluating the bidders’ qualifications and proposals in each call for tenders have opened the bidders’ price envelopes yet.
A waste-management industry insider, who wished to remain anonymous out of fear of economic reprisals from municipalities, said the lack of competition already suggests that the prices will be high.
And one clause in the specifications appears to have discouraged potential bidders, he contends.
The clause, buried in the 5,000 pages of the call for tenders for the St-Laurent plant, forbids bidders from forming a consortium to submit an offer.
“But in our industry, the guy who builds the site, the guy who sells the technology and the guy who operates the site are three different guys,” said the insider, who is a specialist in composting.
“So if they don’t have the right to form a consortium, then one of them has to take the lead and the risk for the other two, who become subcontractors. So what happens? He takes bids from subcontractors and adds a very high margin as a financial buffer.”
The two bidders on the three contracts are La compagnie de recyclage de papiers MD and SUEZ Canada Waste Services.
The Montreal Gazette contacted Veolia, a global firm that operates more than a hundred wastemanagement facilities, including organic waste, in North America alone, to ask why it didn’t bid on Montreal’s call for tenders.
“We decided not to respond because a whole set of technical, administrative and financial clauses didn’t meet the requirements of our group,” said Stéphane Mailhot, director of communications for Veolia Canada. The company informed the city of its decision, he added. The consortium clause was one issue, he said, but there were other clauses. “We didn’t feel all that comfortable to pursue it.”
Montreal’s debacle with a $355.6-million water-management contract, cancelled in 2009 following a devastating report by the city’s auditor general concerning irregularities, may explain the city’s decision to forbid consortiums from bidding on the organic waste plants, the industry insider suggested.
However, the auditor general had faulted Montreal for combining two projects — one to install water meters and the other to do engineering work to install valves on the city’s underground water network — in a single contract, which led to the inevitable creation of consortiums and limited competition.
The auditor general’s lesson was for the city to break up large-scale projects into sub-projects with separate contracts to promote competition, not to ban consortiums as such.
Meanwhile, the industry insider agreed with Trent’s prediction that the cost of the project is driven up because of the politicians’ mantra to process waste on the island.
“Officials are on a whim to have composting done on the island of Montreal because it’s bad to export waste,” he said.
“That’s their opinion. But when you’re on an island like Montreal and you want to transform waste into compost next to an airport or on a residential neighbourhood where the houses are worth $500,000, it’s possible it will cost a fortune to build the composting centres because they have to be armoured (to not create irritants for what’s around them).”
Moreover, the insider said it’s a fallacy to argue processing waste on the island will save on trucking material because most of the compost that will be produced at the island’s plants will end up being hauled offisland to rural areas anyway.
“It won’t be the people of Montreal who will use the compost,” he said. “It’ll be farmers who live in the countryside. Why don’t you do the composting in the countryside next to farms?”
As well, wood chips, which have to be mixed with the organic waste to create compost, will have to be trucked in anyway, the insider said.
“It’s like deciding that we need to grow wheat on the island to make all of the bread for everyone on the island who eats bread,” he said. “We can’t function that way. You have to marry the countryside and the city. We buy our food made in the countryside and we can return our food remains to the countryside and have it transformed there to reuse on their fields.”
In fact, a 2012 study commissioned by Montreal on the potential market for the compost to be produced at its future organic waste treatment centres concluded that most of the compost will be shipped off-island.
Lawns, golf courses, cemeteries, municipal parks and other land on the island offered a theoretical potential use of 135,350 tonnes of compost per year, said the study by the firm Solinov. But the theoretical potential dropped to 27,000 tonnes per year when all of the constraints on use of the compost were taken into consideration.
Given Montreal’s planned composting centres were expected to produce 80,000 tonnes of compost from the organic waste that’s collected on the island, the study said, nearly two-thirds of the compost would be used off-island.
The city hasn’t answered the Montreal Gazette’s latest questions on the composting centre calls for tenders. And Youssef Amane, spokesperson for the city executive committee, hasn’t responded to requests for an interview. Members of the executive committee have been on vacation.
For Trent, who retired from politics in 2017, the affair has the odour of an aborted $300-million giant incinerator the island’s mayors planned to build in the east end in the early 1990s, all because the philosophy was for each region to process its own trash.
“It’s perhaps bureaucratically satisfying to treat garbage where it’s generated,” he said.
“But it’s illogical.”
It’s like deciding that we need to grow wheat on the island to make ... bread for everyone on the island who eats bread.