‘Most expensive compost plants in this universe’
Sources: bids to run first three centres are 50% above estimates
Montrealers should brace themselves because the city is preparing to build the most expensive organic waste treatment centres in the world, sources are warning.
The bids to design, build, operate and maintain the first three of five centres that the city has been planning to build for a decade have come in at 50 per cent above the city’s estimates, say sources who are familiar with the results of the calls for tenders.
If the administration of Mayor Valérie Plante decides to award the contracts, their combined price based on the bids will be about $332 million, the sources indicated.
The cost of the three facilities would be close to the $344 million the city estimated last year as the price of all five centres.
“They’re probably the most expensive composting plants in this universe,” said one of the sources, who works in the waste management industry, and who spoke on condition of anonymity to avoid jeopardizing his business.
The three facilities include two composting centres in the boroughs of St-Laurent and Rivièredes-Prairies—Pointe-aux-Trembles and a biomethanation plant in the suburb of Montreal-East. Biomethanation is a process that turns organic waste into biogas.
The city received a single bid in two of the calls for tenders and two bids in the third, as The Montreal Gazette has reported.
La compagnie de recyclage de papiers MD and SUEZ Canada Waste Services are each the sole bidder on, respectively, the composting plant in R.D.P.—Pointeaux-Trembles and the biomethanation plant in Montreal-East.
The two companies are the only competitors for the contract in StLaurent.
Each contract includes the cost of operating and maintaining the facility by the winning bidder for five years.
The sole bid on the R.D.P.– Pointe-aux-Trembles plant came in around $92 million, the sources said. That’s double what’s in the city’s 2018-2020 capital works program, which currently lists the expected total investment to build and open the facility, including past and future expenses, as $46.9 million. It was previously projected to cost $23.7 million.
The sole bid received on the biomethanation plant in MontrealEast is about $130 million, the sources said. The latest capital works program projected the total investment in that plant at $72.8 million.
And the price of the contract for the St-Laurent facility is expected to be around $110 million based on the bids received, the sources said.
Yet the 2018-2020 capital works program lists the total investment to build and open the St-Laurent facility as $65.3 million, including past and future expenses. It was listed as $58.8 million the previous year, and was initially projected to cost $45.9 million.
The city refused to discuss the bid prices. A spokesperson said the prices are confidential at this stage of the call for tenders process.
At the political level, Plante’s office has not responded to repeated requests for interviews about the composting centre project.
Meanwhile, word has filtered out about the high bid prices.
Jean-Louis Chamard, an environmental consultant and waste management expert who is working with four industrial firms that are opposed to the city’s chosen site for the composting plant in St-Laurent, said he predicts the Plante administration will have to increase taxes to finance the composting facilities.
His clients are neighbours of the site and are worried about increased traffic from garbage trucks.
“I’m not convinced that citizens will be very interested to see an increase in their taxes so they can sort their garbage into a third bin (for composting),” Chamard said. “Some people, yes. But I don’t think the majority of citizens will agree with it.”
He said he heard from a contact at the city that the “prices are extremely high,” and that elected officials have to decide whether to move ahead with awarding the contracts.
“With the choices the city made in the call for tenders, with the constraints, it was obvious it was going to cost more. It was written in the stars,” he said.
Veolia, a global company that operates more than a hundred waste management facilities, including organic waste, in North America alone, said earlier in August that it decided not to bid on Montreal’s organic waste plant contracts “because a whole set of technical, administrative and financial clauses didn’t meet the requirements of our group.”
In 2013, the city under thenmayor Michael Applebaum passed a loan bylaw to borrow $170 million to cover the cost of four of the five centres. The total price was estimated at the time at $237.5 million, which was supposed to include the cost of acquiring land for the composting centres and decontamination.
The Applebaum administration approved the choice of the site for the St-Laurent facility, at 9091-9191 Henri-Bourassa Blvd., at that time.
The city expropriated the site at a final cost of $18.46 million. The site is double the area that’s needed for the composting centre. As well, the city will have to pay to demolish the building on the site and decontaminate the land.
The city launched the public call for tenders for the three facilities more than a year ago while Denis Coderre was still mayor. The bid deadline in each case was postponed multiple times, so the envelopes were only opened this year.
In 2016, Coderre revealed that the price of the five installations had risen to $288 million.
A year later, in 2017, he said the overall price tag for the five centres was pegged at $344 million. The Coderre administration said $135.6 million of the cost would be financed by grants from the provincial and federal governments.