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$600m Plant's Principal: No Waste Tender Needed

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

and NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The principal behind a controversial $600 million waste-to-energy plant proposal has told Tribune Business there is “no need” to put this project out to competitive public tendering, arguing that this was already taken care of by the BEC reform process.

Dr Fabrizio Zanaboni, Stellar Energy Group’s managing director, told this newspaper that the public tender issued last August for the proposed BEC restructuring had permitted the submission of proposals by groups seeking to provide third-party power generation to the Corporation.

Disclosing that Stellar was one of the initial 13 bidders to submit proposals for BEC, Dr Zanaboni said his group merely “took advantage” of this and there is therefore no need to open up waste-to-energy to rival bidders.

In comments likely to cause some controversy with groups who had submitted their own waste-to-energy proposals for the New Providence landfill, under both the former FNM and now-PLP government, Dr Zanaboni said: “SWTEB (Stellar Waste to Energy Bahamas participated in last August’s RFP (request for proposal) for energy reform, one of the 13 Proposers, under the section ‘ancillary proposals’, relating to renewable energies connected to the BEC privatisation.

“Our proposal envisages a ‘hybrid’ waste-to-energy plant which can run also on other traditional fuels in case of emergency.”

He added: “Personally, I do not see the need to do a specific RFP for waste-to-energy, since the energy reform already gave scope to such add-on sections, and we have taken advantage of such opportunity.”

Dr Zanaboni, in his e-mail to Tribune Business, appeared to attempt to justify his stance by pointing out that Renew Bahamas, the company selected to manage the landfill, had not been forced to contest a competitive tender either.

“Neither, I would add, has the Government bothered to call an RFP to select Renew Bahamas as waste manager,” he added.

However, the controversial Letter of Intent (LOI) signed between the Government and Stellar, and Dr Zanaboni’s comments, go against what the Christie administration promised to a 100 per cent Bahamian group and other waste-to-energy proposals - that there would be a competitive tender to select the best project.

Ginny McKinney, Waste Not’s Bahamian principal, said previously: “They [the Government] said there was going to be Renew Bahamas, and then there was going to be a tender process for waste-to-energy and we could put in a bid again when it got there.”

The Stellar LOI also contradicts the Government’s stated policy of holding-off on any decisions about renewable energy until the BEC process was concluded.

Meanwhile, Dr Zanaboni said APP Tectronics had completed the $200,000 study on whether the New Providence landfill could generate enough, and the right type of waste, to fuel the Stellar proposal last November.

He said the study had “resulted in a test-proven net output of 74.75 Mega Watts (MW) out of a statistically significant sample taken from the local landfill, as performed in APP’s plasma gasification test unit in the UK”.

The size of the “statistically significant” sample was not divulged, and Tribune Business sources suggested that APP does not have a fully-functioning municipal solid waste-to-energy facility - just a testing unit near Swindon in the UK.

Meanwhile, in a bid to sell his project over Renew Bahamas, Dr Zanaboni said: “We strongly believe that starting with a waste-to-energy plant will result in significant synergies with the selected power generation company, and that as a result waste-to-energy should be placed at the front burner of the energy reform process.

“Our plant would also generate over $110 million of fuel savings for BEC, assuming a 75 MW net output (25 per cent of New Providence’s current average demand of (electricity).”

And in a possible effort to get Bahamian waste services providers on side, Dr Zanaboni added: “Our position vis-�-vis Waste Not and the other members of the landfill coalition (BRER) is that we will welcome synergies with such companies, since they are important players and we see significant synergies between our respective roles.”

Ms McKinney, though, again questioned yesterday the size of the projected investment, amount of power to be produced, and technology set to be employed by Stellar.

She told Tribune Business, that BRER’s proposal anticipated just $26 million in fuel savings to BEC, adding that the group had been focused on using proven technology that would 
“guarantee the Bahamian people something that works for 25 years”.

“We’re not a proving ground for technology,” she added. “The cost [of the Stellar project] seems exorbitant for such a small place and volume of waste.”

Another waste industry source, speaking on condition of anonymity, said they had been advised Stellar would need 3,000 tonnes of garbage per day - double its own 1,500 tonne estimates - to generate the 75 MW in energy it was forecasting.

Meanwhile, high-level government sources told Tribune Business that there was “more than meets the eye”, and “more to come out” on the Stellar LOI and its signing.

Several sources suggested that Renward Wells, the Ministry of Works’ parliamentary secretary who signed the document, was being made the “fall guy” and “sacrificial lamb” over the affair.

They questioned why Mr Wells, a long-time Ministry of Works engineer before entering politics and highly-regarded by his colleagues, would ignore a protocol/procedures he knew well and sign something ‘above his pay grade’ without getting authorisation from higher up.

Several observers suggested the key to the mystery likely lay with the as-yet unnamed Bahamian investor group that has partnered with Stellar, especially given that Dr Zanaboni said they played a key role in getting the LOI signed.

Opposition leader, Dr Hubert Minnis, said yesterday that the LOI controversy sends a “bad message” to potential investors, questioning who were the Bahamian partners involved with Stellar.

Speaking with Tribune Business, Dr Minnis said Stellar Energy was only just incorporated in February 2014. This conflicts with Stellar’s own PR, which revealed its presence as a company with a Bahamian presence and offices in Nassau back in November 2013.

“What I want to know is who are the lawyers, who is representing this company? Who are the Bahamians involved? This company was just incorporated in February of this year,” said Dr Minnis.

A Letter of Intent is effectively an ‘agreement in principle’, which normally means numerous other conditions have to be fulfilled before such a project becomes reality.

“Mr Wells didn’t have the authority to sign the document,” Dr Minnis added.

“He is a very intelligent man. He knows the protocol. For him to do that suggests that there was involvement from higher up. He should resign. If he does not resign the Prime Minister should make him resign.”
Dr Minnis added: “It sends a bad message to investors when you have a parliamentary secretary signing a document he has no authority to sign. Any legitimate investor would know what to do.”

Stellar Energy’s plans were first brought to the fore last November when Tribune Business reported exclusively that the company was offering to build and operate a plasma waste-to-energy plant at the New Providence landfill, creating 400-500 full-time jobs in the process.

Dr Zanaboni at the time said Stellar Energy’s integrated solution offered the Bahamas far greater benefits than proposals which were then being considered by the Government.

The Christie administration has since selected Renew Bahamas as its preferred landfill manager, with some local waste services providers - who had offered similar proposals - slamming the Government for its secrecy.

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