Recycler’s collapse has cost $1m so far

ABOUT $1 million of Victorian ratepayers’ cash has been wasted since the collapse of recycling giant SKM, according to the Greens.

The party says costings by the Parliamentary Budget Office shows the crisis has slugged the 33 councils affected with a bill of about $270,000 a week since SKM stopped accepting recyclables on July 25. It totals about $1.08 million. On Wednesday, Cleanaway announced it acquired about $60 million of SKM’s debt and could buy the company.

“The report shows that the current situation is financially, as well as environmentally unsustainable, so it is welcome that Cleanaway has stepped in,” Greens leader Samantha Ratnam said yesterday.

“SKM’s closure has exposed to us all how poor our recycling system has been in Victoria and just how little of what we put in our recycling bins is actually recycled.”

Its collapse has resulted in Australia’s recycling industry plunging into a worsening crisis, with tonnes of recycling being sent straight to landfill.

The recycler announced it had gone into receivership with $100 million worth of debts.

“The acquisition of the debt will allow us to work with the receivers to examine viable options for SKM,” Cleanaway chief executive Vik Bansal said.

“If a sale process is undertaken and if we are successful in purchasing any assets, we will return the assets to a sustainable footing.”

KordaMentha has also been appointed receivers to manage the business.

While SKM’s collapse was predicted, it was largely triggered by China’s decision to stop accepting overseas waste.

As a result, Victorian warehouses are full of unprocessed rubbish, while other recycling is being sent to landfill.

The State Government has promised councils $11.3 million to ease pressure, but it has refused to axe the landfill tax.