The incinerator debt: A bad deal for towns of Gipuzkoa

  • This autumn contract for the first phase of the Zubieta incinerator will be granted by the Gipuzkoa Residues Consortium. And this autumn several town councils will have access to the study drawn up by the Consortium. The project's costs, more than one thousand million Euros, and the demanding conditions set in terms of paying them, will turn the sustainable residue management which those councils have been using until present on its head. Are people prepared to leave a debt like that to their descendants?

Urko Apaolaza Avila @urkoapaolaza
2016ko urriaren 04a

When many citizens were counting how many days it was to their holidays, or how many days before starting their summer jobs, Gipuzkoa Residue Consortium (Gipuzkoako Hondakinek Kudeaketa - GHK) put a red ring around a day on the calendar: the 28th of July. They chose the penultimate day of the school year to take the most important decision of the year, passing the conditions for granting the contract for the management and building of the incinerator.

   The anti-incinerator movement ­– made up of both the peaceful, striking Gipuzkoa Zutik protest, and GuraSOS association and groups of critical doctors protesting about health – put the people in charge at Gipuzkoa Provincial Government in a difficult situation at the start of the summer. Perhaps GHK had thought that most people would be on the beach by the end of July – the company promoting the Zubieta project is a public one, set by the the Provincial Government and groupings of municipalities – but, even so, hundreds of people gathered in Donostia waving white stars and the slogan Zuen negozioa, gure minbizia ('Your Business, Our Cancer'), protesting that "it is one of the biggest wastes of money in the history of Gipuzkoa".

   While that was all happening, several less-noticed movements were taking shape in several towns after finding out about the incinerator project for 200,000 tonnes of refuse.

On 28th July hundreds of people gathered in Gipuzkoa Plaza, Donostia, to protest about the steps taken to build the GHK incinerator at Zubieta. The waste consortium wants to grant the contract for the infrastructure this autumn. (Photo: Argazki Press)

 

Modern Words, Old Formulas

Refuse management is the responsibility of town councils, and they grouped together to deal with it. The refuse consortium, GHK, was set up in 2007 for building the incinerator. This centralising process was accompanied by privatisations. According to the consortium's plan, the incinerator and people's refuse will be run for 35 years by the winner of the contract. The people responsible at the provincial government have described it as a public-private partnership.

   This description is an old, well-know formula. The company will appropriate a public service and, if it is not profitable, the public authorities will guarantee their profits, even if that means not offering people other basic services to do that. The people defending water in Thessaloniki know a lot about that, as do the citizens of Chile who want to get their pensions back from private hands, and people who drive through the Artxanda tunnel, and all the tax payers in Bizkaia.

   Before GHK held the decisive July meeting, we heard about the heavy load which was going to be put on the people of Gipuzkoa in the press: it will have a cost of more than one thousand million Euros, with 10.5% interest for the company, an unsustainable quota which is based on prices rather than use… Is there anybody who would like to join a club like that?

   A report drawn up by consultants Deloitte for the consortium made it even clearer how they want to link the town councils to the incinerator. The ten-page assessment states that the building and debt created by the Zubieta project will have to be paid "as a matter of obligation and priority", before covering any other payments, by the town councils of Gipuzkoa over a 35-year period.

We heard about the heavy load which was going to be put on the people of Gipuzkoa in the press: it will have a cost of more than one thousand million Euros, with 10.5% interest for the company

The private company which runs the incinerator will have even further “safeguards” in order to guarantee its refuse business. If a town council were not to pay the rate imposed, the provincial government would "remove" that money under some other pretext: town councils' largest funding comes from provincial government sources on a yearly basis. Furthermore, they will not be able to sell their refuse to anybody else, even if it is a cheaper, better solution. What about if they decided to leave the consortium? They would still have to pay the debt, as well as the damages to other town councils caused by their leaving.

   But if joining is possible, so is leaving. The contract has not yet been awarded, and several town councils have said that they will consider that possibility. They are towns which have taken important steps in refuse management, which have very high recycling rates, whose inhabitants create few kilos of refuse and which have been held up as models by European institutions more than once. "Usurbil recycles more than 83%, why wouldn't we consider that option?" says mayor Xabier Arregi.

   Usurbil (6,000 inhabitants) is very close to the place where the Zubieta incinerator is to be built, and its citizens have campaigned actively against it. They have arranged a referendum to be held from 21st to 23rd October, the first to be held in Gipuzkoa about the incinerator: "We will take the result into account", says Arregi, "because what the citizens say is a direct order for us".  The council passed the motion on the 26th of July, saying that Usurbil has no place in Gipuzkoa's "institutional refuse architecture", and it decided to set up a committee in order to examine from technical, legal and economic points of view how to leave San Marko Consortium. The committee will present its report "in two months' time at most".

   The same motion was passed in Oiartzun and Zaldibia, as well as in Hernani, the town council itself taking on responsibility for the report in the latter. Speed and tempos are variables which have to be taken into account with regard to this issue: companies are able to present their offers for the contract over the next few weeks and the consortium wants to award the contract for building at the end of October.

Protest of Gipuzkoa Zutik movement (Photo: Dani Blanco)

 

Enormous economic burden

It is difficult to foresee how the exit of those town councils would affect GHK's internal balance, but it is clear that more weight would fall on the remaining members in terms of building and maintaining the incinerator. And, according to a document which ARGIA has had access to, the foreseeable economic burden is far from inconsiderable.

   One of the participating town councils has carried out a simulation to see how much each of the town councils would have to pay each year over 35 years. To carry it out, they took the 'conservative' figure of one thousand million Euros, believing that companies will make offers below that in spite of the fact that many are convinced that the project's final cost will be far higher than that: Deloitte itself has the figure at 1,406 million Euros.

  

In Hernani, according to the Zero Zabor (‘zero waste’) group, the town council can pay for its door-to-door refuse collection service using the 780,000 Euros it will have to pay each year for the incinerator.

To give an example from the simulation, Donostia will have to contribute 7.4 million Euros every year until 2051 to have its refuse burned, which is around three times what it spends on Tabakalera. Zumarraga will have to pay a total of thirteen million Euros over the period, which is the same amount that Arcelor is asking from the Basque Government in order to keep its steel plant open. The town in Gipuzkoa with the lowest number of inhabitants (Gaintza; 120 inhabitants) will take on debt of 167,000 Euros from now on. In Hernani, according to the Zero Zabor (‘zero waste’) group, the town council can pay for its door-to-door refuse collection service using the 780,000 Euros it will have to pay each year for the incinerator. And the group has made some further calculations for Hernani taking several pieces of data into account.

   In Hernani,  it is six years since they set up the collection system with refuse being classified at its point of origin. Since then, the recycling percentage has been higher than 57%, and compost is also collected from most areas of the town. However, as in other towns with such results, GHK punishes such efforts rather than rewarding them: the consortium has raised its rates for refuse by 11% and those for organic waste by 77%. And even so the incinerator would be much more expensive for Hernani than its current system: twenty-one million Euros more expensive.

   "The GHK management model isn't sustainable for anybody, and still less so for town councils which are doing things well", states one of the Zero Zabor group's work documents about Hernani. "The model which has been developed over the last six years, and which has achieved such good results, will be turned on its head in no time". The people of Hernani will notice it in their health and services, in the loss of positions of employment - according to studies carried out by Manu Robles Arangiz Foundation, 7,000 jobs could be created in the Basque Autonomous Community and 900 in Navarre if all waste materials were classified at their point of origin - and also feel it in their pockets and in the debt which the incinerator will leave them with, the waste disposal charge which each family pays the town council every year going up from 95 to 300 Euros.

Abuztock, anti-incinerator festival in Donostia-San Sebastian (Photo: GuraSOS)

 

On March 2nd the mayor of Ermua, Carlos Totorika, asked the consortium (although Ermua is in Bizkaia, it is also part of Debabarrena) how much it would cost the town to leave the consortium, in the belief that it would be cheaper to take their waste materials to Zabalgarbi. GHK gave its price and the deputy responsible for the environment, Jose Ignacio Asensio, told them it: 9 million Euros. He included the debt which the institution has run up until present – amongst other things, the famous swaps which it signed with some banks ­– and also the expenses involved in building the Zubieta incinerator and running it over the next two decades, even though the contract for that work has yet be granted.

   That disproportionate figure was a clear message to anybody who might want to leave GHK. However, the Zero Zabor group in Hernani has checked several sources and found out that the amount for Hernani would be somewhere between 1.4 million and 2 million Euros. In fact, it is highly doubtful whether including future investments and debts in the calculations is legal. The group believes that "it is worth managing it ourselves and leaving GHK. Carrying on would be the ruin of Hernani”.

            So one of the main tasks for town councils which wish to leave the consortium is going to be building up their legal fortifications. It does not seem that finding the technical solution for dealing with refuse in the future will be so difficult in technical terms, the amount involved being less than that of some other towns. Those who remain in the consortium will have to face not only the debt left by the incinerator, but also the unknown factors in the project's second phase.

[This article was translated by 11itzulpen; you can see the original in Basque here.]


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