Waste facility contract, concerns and review by Auditor General | Loop Cayman Islands

The content originally appeared on: Cayman Compass

The Cayman Islands Cabinet recently approved an extension to the financial close deadline and long-stop date for project agreement negotiations between the Cayman Islands Government and Dart for the development of ReGen, Cayman’s energy and recycling centre. This extension will allow the new government more time to understand the project, including how it continues to meet the country’s needs. It will also give the Office of the Auditor General an opportunity to complete its audit review of the contract signed by the previous government in March 2021, just before election.

New long stop date

According the government, the new deadline to obtain financial close is now no later than October 31, 2022. The long-stop date will three months after the proposed financial close date i.e., no later than January 31 2023. If the necessary conditions have not been completed by this date, the agreement may either automatically be terminated or one of the parties may the right to withdraw. Without sight of the detailed provisions of the contract, however, it is unclear whether any such termination would result in the new government having to pay a large penalty, which (if applicable) could put a negative impact on the public purse.

Pluses and minuses for the Ministry of Sustainability

Regarding the pluses of the ReGen facility, Ministry of Sustainability and Climate Resiliency Chief Officer, Jennifer Ahearn, noted that ReGen will deliver a number of environmental, social and economic benefits for the country.

Ahearn said:

Once complete, the ReGen facilities will reduce greenhouse gas emissions, contribute to our national renewable energy target, improve recycling performance and divert up to 95% of our waste from being landfilled, contributing significantly to our efforts to cultivate a lasting legacy of sustainability in the Cayman Islands.

While studies have confirmed that, in fact, Cayman could see a 95 per cent reduction in landfill waste, the question remains what gases will be released by the waste management facility and whether or not they will be harmful to the environment.

Exacerbating the concerns, there is still no Clean Air Act in the Cayman Islands that sets out local standards for clean air, in particular for waste management facilities which may produce toxic gases. Residents would need this type of legislation in place to ensure that any gases being released by the facility do not impact their health and that they have legal remedies in particular circumstances. In terms of accountability, such standards would ensure that there are local standards that waste facility operators and others must follow, rather than just international guidelines which might not be enforceable locally.

Garbage will continue to pile up in the meantime

Even with relevant legislation in place to protect residents, it may take years for the waste management facility to be in full operation. This means that, during this time, Cayman’s nearly 70,000 residents and millions of visitors over the years will continue to contribute daily to the landfill. The amount of garbage produced during this period could be significant, perhaps creating another Mount Trashmore (which will likely by the case, especially if recycling efforts are not amped-up during this time).

The problem of waste management is not limited to Grand Cayman either; the concern extends to the Sister Islands and must be addressed there as well. The Minister for Sustainability and Climate Resiliency, Wayne Panton, acknowledged this in relation to the benefits of the waste management facility, saying that “for ReGen to benefit everyone in the Cayman Islands, it’s important to ensure plans are in place to provide sustainable waste management for Cayman Brac and Little Cayman.” Cayman Brac and Little Cayman cannot therefore be left out of the equation.

Commitment to sustainability

In addition to the government’s sustainability goals, it was reported that Dart President Development Delivery & Infrastructure, Cameron Graham, said Dart is committed to delivering the ReGen project and achieving the sustainability benefits associated with a modern energy recovery and recycling centre.

Cabinet’s decision means we can restart work on the Environmental Impact Assessment for the ReGen project and progress important negotiations to achieve financial close by the new deadline.

We look forward to moving the project forward in partnership with the Cayman Islands Government. A cleaner, greener Cayman Islands benefits us all.

Graham shared.

Auditor General’s review

As with the Dubai Expo “leak” and resulting controversy, it is expected that the waste facility project will undergo a review by the Office of the Auditor General over the next couple of months. However, instead of the Auditor General’s report being “leaked” this time around, it should be released to the general public for full transparency. This will allow members of the public to weigh-in on any issues raised by the Auditor General and hold the government accountable.

It should also be noted that it was reported that the Governor’s Office has also committed to requesting a further review of the financials through the Foreign Commonwealth & Development Office, however, this additional review is not anticipated to impact project timing.