By Graeme McNaughton/The Oshawa Express
The Durham York Energy System is facing yet more delays before it is fully operational.
Originally scheduled to be up and running in December, a report prepared for a joint session of the region’s works and finance committees says it now likely won’t be until the final quarter of this year.
This would have the plant operational by September at the earliest, later than the expected August date reported earlier in April by The Express.
At the meeting last week between the two committees, councillors voted unanimously to approve further funding to cover costs associated with the delay. This includes up to $450,000 to extend a technical consulting contract with HDR Corporation; $250,000 for a retainer for law firm Borden Ladner Gervais for issues associated with commissioning the site and $365,000 to extend the contract with Stantec for monitoring air quality level.
Durham’s share of the payments, $1 million, will be pulled from the region’s Solid Waste Management Reserve Fund.
Ajax councillor Shaun Collier says that at this point, there is no way to know what the budget status of the project is as there are still outstanding costs to be determined.
“I have a lot of question marks as far as the financials and the conclusion (of the report) doesn’t say whether this project is still over or under (budget), and I guess that’s because there’s still a lot of costs that we don’t know,” he said during the meeting. “The land expropriation proceedings, we won’t know until 2016. The connection for Enbridge, we don’t know. The tunnel for CN, we don’t know yet.”
Originally, the budgeted cost for the natural gas hookup by Enbridge was budgeted for $200,000, but was bumped to $4.89 million in February.
Cliff Curtis, the region’s works commissioner, says he estimates the cost overrun to be around $10 million “on the high end.”
Since mid-January, Covanta, the company building and eventually operating the incinerator site, has been contractually obligated to pay the region $10,000 per day until the site is fully operational to help cover additional costs.
Collier expressed his concern that this wasn’t going to be enough, saying he imagines that money “getting eaten up fairly quickly.”
“I’m having trouble digesting that this $10,000 will cover all of these costs, all of the waste and any other miscellaneous that could be out there,” he later said.
Oshawa councillor Nancy Diamond says that she, like Collier, is concerned that the money being paid by Covanta will not be enough to cover the costs being incurred by the region for the delay.
“My concern has been what is the delay costing us against what revenue will hopefully be received,” she said. “Saying we’re getting $10,000 a day is one thing, but in the first quarter and even assuming Covanta pays, what is it costing us?”
Curtis says the region has sent its first invoice to Covanta for $1.1 million for the first three months of delay, but has not yet received payment.
Regional chair Roger Anderson, however, says he isn’t as concerned with the timetable if it means the site is operating correctly.
“I’d rather be a year late and right than on time and wrong. I have a problem with us being late,” he said during the joint committee meeting.