Plasco garbage deal under scrutiny

The City of Ottawa should be open about its proposed garbage-processing deal with Plasco Energy Group given Plasco's technology is not yet proven at a large-scale commercial level, according to at least one business expert.

City staff and Plasco worked out a 20-year-deal that calls for Plasco to take on 300 tonnes a day of residential waste at a cost of $83.25 per tonne.

The deal is contingent on Plasco completing construction of the waste-processing plant by 2016 and securing financing by 2013.

On the surface, the deal appears safe for the city in that the company bears all the business risk, according to Mike Miles, the director of the MBA program at the Telfer School of Managment.

Experts calls Plasco deal an 'experiment'

But he said the whole deal is something of an experiment and Plasco benefits by acquiring a high-profile customer in order to market its service far and wide.

Because of this, he thinks the city should be open with other municipalities looking to follow suit.

"If the national capital goes for a deal like this...then the implication is that Plasco can go to other cities of the country and say 'Ottawa is doing it...why not you?'" said Miles.

"If I was the City of Ottawa...in the contract that I sign with Plasco one of the clauses I'd want in there is [that] any data available in terms of financials and viability would be open data...for any other city who came to the city and asked for the data."

Plasco plans to process garbage through "plasma gasification," a process that involves heating shredded garbage to very high temperatures in the absence of oxygen so the waste does not burn.

Large-scale 'plasma gasification' yet to be proven

Steve Aplin, vice president of energy and environment at HDP group, also questions some of Plasco's assumptions and calculations and said the technology will need to back it up.

"Of course they've gone with optimistic projections," said Alpin. "They'll have to prove that they can do it."

If Plasco is unable to process the city's waste at any time after the fifth year of operations, then the city can reduce the amount of waste it sends.

Councillors on the environment committee will hear from Plasco and city staff again Monday before council debates the details Wednesday.