Environment committee votes to end Plasco deal

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Matthew Pearson, Ottawa Citizen

The city’s environment committee voted Tuesday to formally terminate Ottawa’s contract with Plasco — a crucial first step in severing ties with the homegrown clean-tech company, which filed for creditor protection last week.

The committee also voted to give city manager Kent Kirkpatrick the necessary authority to terminate the lease for Plasco’s Trail Road demonstration facility and to develop a plan for finding a replacement technology to deal with Ottawa’s residual residential waste.

But some councillors and members of the public urged the city not to rush into anything and instead fully explore other options to increase the city’s diversion rates, such as increased uptake of the green bin program, especially in apartment and condo buildings.

“I don’t want to rush this. I don’t think we need to rush this,” said Rideau-Goulbourn Coun. Scott Moffatt.

Although it has raised more than $300 million over the years, Plasco was unable to secure financing for its commercial plant by Dec. 31, missing its third and final deadline under a 20-year contract with the city that would have paid the company $9.1 million a year to take as much as 300 tonnes of garbage a day.

That final missed deadline opened the door for the city to walk away from the contract and explore other options.

Early last month, the city posted a Request for Information for residual waste management technologies and received 37 submissions from places as far away as Korea, Japan, Germany and Spain, as well across Canada and the United States.

Meanwhile, Plasco applied for creditor protection on Feb. 10, laying off 80 employees.

Such protection enables a debtor company with liabilities in excess of $5 million to obtain a court order to try to reach a compromise or arrangement with its creditors.

Plasco has $80.5 million in assets and more than $115 million in liabilities, city solicitor Rick O’Connor told the committee Tuesday.

Although the committee voted in favour of terminating the agreement with Plasco, that can’t officially happen immediately due to a stay of court proceedings, which is in effect until March 11, the city’s lawyer said.

Plasco has 18 months to decommission its site. The company will not be required to pay rent during that time and has provided a $300,000 decommission security. The city can use the money to complete the decommission of the site should Plasco fail to do so.

Kirkpatrick told the committee that he’s “comfortable” taxpayers won’t be on the hook for any additional costs related to decommissioning the site.

In terms of what’s next, committee chairman David Chernushenko said the city must first complete the green bin program review, which is expected to conclude later this year.

That report should give council a better understanding of what the waste is that needs to be dealt with, so council can then look for proven technologies designed to process that waste, Chernushenko said.

But he, too, added part of the focus must be on diverting as much garbage as possible from the city’s Trail Road landfill, which is expected to last until 2042.

“We shouldn’t pre-judge that council will decide on a technology and decide to enter into a contract on it,” Chernushenko said.

Kitchissippi Coun. Jeff Leiper said he doesn’t want council to simply replace Plasco with a Plasco-like technology, while Somerset Coun. Catherine McKenney said the city should take a few years to seriously focus on boosting diversion rates before considering a new technology.

“There is so much more we can be doing,” she said.

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