Philipsburg:--- Members of the island council posed several critical questions to commissioner of environmental affairs regarding the waste management project he submitted to the island council for approval on Monday.
The council member's wants to know what would be the impact of the project to the people of St. Maarten and its ultimate costs to St. Maarten. Commissioner Theo Heyliger in his presentation to the island council said members of the council were given two letters informing them on the solid waste project which elucidated the concerns and history of the project, as well as the procedures government followed thus far. Heyliger said members of the council were also informed on the objective of the solid waste project and the most favorable proposal for the Solid Waste Management and Processing Facility. He said they were also informed of the present state of affairs and planning of said project. Also included was the choice of location and the facilities that are to be built as well as the contracts of the legal services provided by HBN law and the financial services by KPMG.
However, members of the council still believe that Heyliger did not provide them with adequate information pertaining to the procedures they followed.
Island council member Leroy Petrus De Weever wants to know why the negotiations with the French side did not continue and why did the two French side companies did not bid on the project. De Weever said he wants to know why the negotiations failed between the two sides and felt that if this channel was used St. Maarten would have saved money and the people on the Dutch side would have had less impact since the garbage would have been burnt on the French side of the island. He asked the executive council to provide the council with evidence which would show that the Dutch side exhausted their efforts to cooperate with the French side. De Weever said if the council cannot provide the evidence then it is clear that the current government would be wasting government monies.
The councilman wants to know based on the calculations made on the lifespan of the dump exactly how many more years St. Maarten has to use this area for garbage disposal.
De Weever also wants clarity on the five member advisory committee and their background as it relates to solid waste disposal and alternative energy generation. He said based on the information provided by the commissioner the advisory committee said that they analyzed four companies while the two French side companies they said informed them in writing that they would not submit any proposal. Based on that statement the island councilman said he wants an explanation as to why would the committee spend time and money to analyze two companies that would not participate in the bidding. De Weever also poked holes in the explanation given to the council concerning the thermal processing unit and wanted to know if there were other solutions to be considered when it comes to the processing of solid waste.
Questions were also posed on the effects this plant would have on GEBE and the amount of electricity the Solid Waste Management Facility would provide to St. Maarten. The council members also wants to know if the people of St. Maarten would get any sort of relief since GEBE would get at least 8 mega watts of electricity from the garbage disposal process. The council also asked the executive council to provide more details on the financing and their choice of law firms. He said based the documents provided to the council it claimed that the contractors chosen were the cheapest. He said he wants to executive council to take note of the Chinese proverb in mind that states "Cheap things no good and good things is not cheap."
One of the key concerns posed to the executive council came from members of the council that are supporting the current coalition government. Island Council member Louie Laveist wants to know who took the decision to place such a facility in Cole Bay or Cape Bay. He asked if the people of the area were consulted and if they were informed on the negative effects such a facility would have on their neighborhoods. Laveist made clear that he was not informed and no one consulted with him when they were making the plans for such a facility in his neighborhood. The councilman declared that over the years Cole Bay has seen a number of land butchers and not developers and he wants to make clear that the people of Cole Bay/ Cape Bay does not want anymore butchers in their area.
While councilman Rudolphe Samuel said while everyone understands the need for such a facility due diligence much be done. He said even members of the second chamber made mention to the fact that St. Maarten does not have a proper waste management facility in place during the debates of the Kingdom Charter. Samuel said he is aware such a project would have negative effect but also noted that the process must move forward in the interest of St. Maarten and its people. While Senator George Pantophlet reminded the council of the Queens statements regarding the dump when she last visited St. Maarten. The island council meeting has since been adjourned to May 7 to give the executive council enough time to respond to the questions posed.
Below are some other information the executive council provided to members of the island council regarding the facility.
1. History of the land filling solid waste.
For years the landfill at Pond Island has been the official repository for practically all the waste streams produced in St. Maarten. The explosive growth of the local population and the tourist industry has brought an increase in most of the waste streams (e.g. construction and demolition-, household -, commercial waste). The disposal of garbage has historically been occurring with limited control and management. Due to hurricane Luis in 1995 and the large waste streams resulting from the clean up and reconstruction activities, the limited space led to a critical situation at the landfill. Plans were designed for remodeling and reorganizing the dumpsite including a containment dike around the waste dump area. These plans were executed in 1998. The highest level of the landfill is approximately 12.00 meters + SMP. The finished parts of the landfill (waste dump) are covered with a layer consisting of a mixture of sand and silt.
After the completion of these works the management of the landfill was outsourced to a private company. The landfill is currently better-controlled and all trucks entering are registered including the type and estimated volume of the waste.
Since the remodelling of the waste dump in 1998 it is known that the capacity of this dumpsite is limited. In 2008, the estimate for available space was calculated with as result that only a few years were left prior to achieving maximum capacity. Further expansion of the dump is not possible in light of maintaining a minimum water surface in the pond for its buffer function during heavy rains and hurricanes.
The need to start with a sustainable solution has become critical and urgent.
This project, focusing on a long-term solution, consists of the building of installations to process the different waste streams that arrive at Pond Island. The main goal of this project is to start the processing of waste in an environmentally safe manner. The Government wants to bring a sustainable and long-term solution for the waste problems of St. Maarten by contracting a party to design, finance, build, own, operate, and transfer a Solid Waste Management Processing Facility (SWMPF) at Pond Island. Government's objective is to achieve a minimum 95% reduction of the disposal of all the waste streams into the landfill.
The Executive Council received various propositions for solution of the solid waste problems of St. Maarten.
After evaluating all information the Executive Council decided in 2008 to include the input from the private sector in solving the solid waste management and environmental problems of St. Maarten.
2. Tender procedure.
In February 2008 the tender procedure for the realization of a new solid waste processing facility was initiated via announcements in the local papers, inviting companies to express their interest in making a proposal to finance, design, build, own, operate and transfer such a facility.
In March 2008 ten companies submitted their Expressions of Interest (EOI's). Out of the ten a total of four companies (one American, two French and one local) were selected and invited in June via a Request for Proposal (RFP) to participate in the tender procedure.
Although efforts have been made to tender and realize a combined facility with the French side of the island, this could not be accomplished. However the RFP documents require the facility to be in conformity with the environmental EU standards, making it possible for the facility to receive and process solid waste from the French side at a later stage if needed.
A five member Advisory Committee was installed by the Executive Council in May to coordinate the tender procedure and advise the Executive Council with regard to the selection of the most favourable proposal.
On June 25th 2008, an information meeting was held with representatives of the four companies.
A memorandum of information including questions and answers was sent to the four companies.
The four companies had to submit their proposals by October 23, 2008.
Two companies, the American and the local company, submitted their proposals. The other two invited (French) companies declared in writing to be unable to submit a proposal.
The local company also submitted two alternative proposals including options for waste collection and waste to energy, as was allowed in the tender documents (Request for Proposals).
The Advisory Committee reported their findings to the Executive Council in an Evaluation Report of the received proposals in December 2008. The Advisory Committee evaluated the (in total 4) received proposals based on the criteria as stipulated in the RFP and unanimously scored the proposal of the local company that included the waste to energy option as the most favourable solution.
Based on the visit of a comparable installation in Scotland and some additional information requested from the selected proponent, the Advisory Committee made its final recommendation in March 2009 with regard to the selected system.
In May 2009 the negotiations started with the Windward Roads NV (WWR) to negotiate a Design Built Finance Maintain and Operate (DBFMO) contract for the SWMPF.
3. Objective of the project.
Waste reduction of at least 95%
In the announcement, as well as in the tender documents (RFP), the requirement included a stipulation that at least 95% of all solid waste must be processed. The remaining maximum 5% of residual waste must be land-filled at the present dumpsite. To make room for this residual waste the tender documents require that the present landfill undergo mining and processing by a minimum quantity of 10,000 ton per year. This will result in a steady yearly reduction of the landfill. The extra space can be used for other purposes including reserved space for debris from disasters (hurricanes etc), if any.
Waste to energy
Waste reduction can take place via separation and recycling of parts of the solid waste, for example paper, plastic, glass, aluminium, steel, copper, tires, concrete, asphalt, wood. Furthermore, organic waste can be transformed into compost. Still the remaining part of the non recyclable solid waste will be bigger than 5% and must be processed, most probably via some kind of thermal processing. This thermal processing can produce energy that can be transformed into electricity.
As could be understood from the EOI's submitted by the companies and the questions asked before and during the information meeting, it could be anticipated that most of the proposals would consist of a combination of different processes including a thermal processing component. Depending on the inclusion of the different options the thermal processing component will be more or less extensive. If less extensive, the produced energy can be used for the processing facility only. If more extensive the surplus electricity becomes available as supply to GEBE's electricity network.
The most favourable proposal includes a thermal processing component resulting in a considerable amount of green electricity to be delivered to GEBE's network.
Cost of solid waste processing
The present processing of solid waste via a "sanitary" landfill is clearly the cheapest solution. It has become also very clear that this kind of processing results in quite some environmental problems such as uncontrolled fires and pollution of the environment.
The processing of solid waste in an environmentally responsible manner via a processing facility will be considerably more expensive. Cost reduction via re-use of residues and alternative energy production is therefore not only most welcome but most probably a must in order to keep the costs to the population and business community within a reasonable range.
Cost savings through alternative energy production
A facility that makes optimal use of thermal processing may produce up to 8 Megawatt of green energy.
This represents a considerable income from the green energy production, reducing the cost of the solid waste processing, while at the same time reducing the amount of heavy fuel for electricity production by +/- 12% and the green house gases by about 70,000 ton CO2 per year.
Thermal processing and environment
At present, thermal processing can take place well within the relevant environmental standards applicable for air, (open and ground) water and bottom pollution. The RFP documents require the facility to be in accordance with EU standards with regard to air, water and soil pollution.
Consequences of energy from waste for GEBE's power production
It is evident that the supply of extra power to GEBE's power network comes with technical and financial consequences. However, examples of solutions are available all over the world. Considering the developments in the energy markets, it is recommended that GEBE implement alternative (green) energy sources.
Government and GEBE will work together to realize this alternative energy source.
4. Description of the most favorable proposal for the SWMPF
Windward Roads B.V. submitted the most economically and environmentally advantageous proposal, consisting of a batch process thermal gasification technology,
The gasification system will use an advanced thermal treatment process using proprietary batch-process thermal gasification technology, called the Batch Oxidation System™ (BOS™). In the process, variable organic wastes will be converted to energy and other usable products without sorting or pre-processing the materials to be converted.
The plant will treat a.o. household and commercial waste, medical- ship- and airline waste, and various rest products of the C&D recycling plant, as well as car wreck recycling and bulky domestic waste recycling.
Initially a total of 5 BOS-trains were proposed to be installed in the solid waste treatment plant.
Each train consist of 4 primary gasification chambers, a secondary combustion chamber and a heat boiler. The heat boilers will produce super heated steam, which will be used to drive a steam turbine and generate electrical power.
The system includes individual emission control systems on each train with continuous emissions monitoring and instantaneous feedback for flue gas treatment.
Construction and Demolition recycling system (C&D system)
Other types of waste such as yard waste, waste originated from construction and demolition, and the contents of the existing landfill will be sorted by the C&D system into sand, bricks, wood, ferrous, non ferrous, paper and cardboard, plastics and residue.
The C&D plant consists of the following elements: star screens, air separation, magnets, and manual sorting as the last stage of the recycling to retrieve the remaining recyclables.
Based on the recent weight and caloric value analyses, resulting in higher quantities of waste and lower caloric waste values, WWR proposes to amend the design of the BOS installation into 3 BOS trains including 2 shredder installations, to optimize waste density and increase BOS-installation capacity and process flexibility. These changes have also changed the investment and operation cost, own electricity consumption, electricity production and consequently the gross and net service fee.
5. State of affairs and planning
In May 2009, the Executive Council selected one of the proposals of Windward Roads NV (WWR) as the environmentally and economically best solution for the processing of the solid waste, as proposed by the tender advisory committee. Subsequently WWR was invited to develop and negotiate the DBFMO contract in cooperation with the Island Government. It is expected that this contract can be finalized in the second quarter of 2010.
To finalize the DBFMO-contract the independent cost quality advice of KEMA is needed. In this respect the Council is referred to letter dated April 13, 2010 to the Island Council with regard to the answers to the questions posed by the Central Committee.
As soon as KEMA has submitted the report, the draft DBFMO contract can be finalized and the entire project can be presented for approval to the Executive and Island Councils.
6. Location of the SWMPF
In the tender documents the new SWMPF is located at Pond Island just to the South of the present dumpsite and to the North of the Public Works yard.
WWR had submitted an alternative proposal for the SWMPF to be located on land reclamation in the eastern section of the Cole bay. However it has become clear that WWR had not included the necessary financing for the realization of this alternative location.
The department of VROM has worked out a proposal with regard to the choice of location for the SWMPF. VROM advises to continue the procedure as planned with the SWMPF on Pond Island and simultaneously investigate the financial feasibility of eventually two facilities on two locations, one on Pond Island for the mining of the landfill and one in Cole Bay for the processing of regular waste.
For more information is referred to the elucidation of VROM as attached to the letter.
When the project is presented for approval to the Island Council the evaluation of the location alternatives will be included in the presentation.
7. Private tender with HBN Law for legal services
For the realization of the SWMPF through a DBFMO contract the following legal services must be performed:
- Drafting of the Island Ordinance for the collection and processing of waste and the production of energy from waste required for the implementation of the Legal Framework, which will de done in consultation with the Island Territory of St. Maarten and other stakeholders, including GEBE; namely:
• To, subject to the approval of GEBE, draft a proposed amendment of GEBE's general terms and conditions as far as required within the Legal Framework;
• To draft a model agreement for the sale of electricity produced from the waste by the Waste Management Concessionaire to GEBE
- To assist the Island Territory of St. Maarten in connection with the evaluation of the proposals to be received in connection with the solid waste management processing facility at Pond Island, in particular the review and possible correction of drafts submitted for the DBFMO contract and assistance with the conclusion thereof;
- To draft other ancillary documentation.
Selection of law firm
Instead of entering into a public tender procedure HBN Law is proposed for the performing of these services for the following reasons:
- HBN Law has a proven record of relevant experience in this field and were a.o. involved in the recent implementation of the fee structure for the harbour of St. Maarten;
- HBN Law office on St. Maarten is the only law firm on St. Maarten being part of a much bigger law firm with more than 25 lawyers in the Antilles and Aruba and a cooperation agreement with the big Dutch law firm Pels Rijcken & Drooglever Fortuijn (Legal counsel to the state of the Netherlands); HBN Law can therefore deliver their services in time with required quality, while time and quality are of the essence;
- Because of HBN Law's relevant expertise and experience in the field, HBN Law can offer the services relatively cheap;
and last but not least
- HBN Law presented an unique solution for the problem of the collectability of the solid waste fees.
HBN Law was requested to submit a proposal for these services in November 2008. HBN Law submitted a proposal for these legal services for a total amount of Naf. 252,000.
8. Private tender with KPMG Corporate Finance
For the realization of the SWMPF through a DBFMO contract the following financial services must be performed:
- Develop a financial model for tariff provision
- Support with the evaluation of the proposal selected by the Advisory Committee
- Assist with the clarification process before starting the negotiation phase
- Assist with the negotiation process for the development of a DFBOOT contract
- Finalize the business case
KPMG Corporate Finance was requested to submit a proposal for these services in November 2008.
KPMG Corporate Finance submitted a for these financial services for a total amount of Naf. 316,339.
Selection of Corporate finance advisory firm
Instead of organising a public tender for these services, KPMG Corporate Finance is proposed for the performing of these services for the following reasons:
- KPMG Corporate Finance has a proven record of relevant experience in the field of advising governments on concession projects internationally, in the Netherlands Antilles and around the Caribbean and were a.o. involved in the recent implementation of the structuring and financing of large infrastructure concessions like the Airport in Curacao and the Cruise Port Facilities in St. Maarten
- For the first half of 2008 KPMG Corporate Finance was the leading PPP financial advisor internationally, having closed 17 transactions with a capital value of € 10.8 billion
- They have ample experience with large and complex waste projects.
- They can rely on a broad range of multi skilled team with proven experience in structuring concessions and waste in both public and private sector as well as ample experience with the development of PPP contracts.
9. The independent cost quality engineering study by KEMA
In the second letter the answers are given to the questions posed by the Island Council members in the meeting of the Central Committee of February 1st 2010.
In addition to the scope of works as described in the TOR and KEMA's proposal, the Executive Council proposes to have KEMA technically and financially compare the proposed BOS installation with alternative gasification systems suitable for Sint Maarten's waste volume and circumstances. Taking into account the extra work included with this scope expansion and considering eventual extra and unforeseen costs it is proposed, as was suggested by councilman L. De Weever, to raise the budget for this ICQE services with Naf 45,000 to in total Naf. 355,000.
In concluding and with reference to the island ordinance "Financieel beheer' the Island Council is hereby requested:
- to ratify the procedure that has been followed thus far with regard to the tender of the SWMPF
- to retroactively approve the private tender with HBN Law
- to retroactively approve the private tender with KPMG Corporate Finance.
- to approve the proposed private tender with KEMA and to forego the public tender procedures in the interest of St. Maarten in accordance with article 17 of the island ordinance on Financial Management and approve the revised budget of Naf. 355,000.