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by Haiti Grassroots Watch
For more than two years, teams of U.S.
and Haitian businesspeople have been working on massive
public-private business deal: a factory that would transform
garbage from the capital into electricity, a resource so rare in
Haiti, only 30% of the population has access.
But the Phoenix Project
involves a technology potentially so dangerous that it has been
outlawed in some cities and countries. It would also commit
Haiti to a 30-year contract.
The project emerged following
the Jan. 12, 2010 earthquake. U.S. businesspeople said they came
up with the idea because they wanted to take part in the
reconstruction but “do more than make a profit.”
“We want Haiti to be energy
independent,” explained a Haitian representative of the U.S.
firm, International Electric Power (IEP) of Pittsburgh, PA. The
representative, a well-known businessman, agreed to speak with
Haiti Grassroots Watch (HGW) only if his name was withheld,
saying he had critical words for some actors who he says are
trying to block the project. “We invested millions of dollars,”
he said. “It will be a shame if we have to abandon it.”
Ashes to Ashes
Phoenix and its 30 megawatt (MW) plant is
the brainchild of IEP and a “Waste to Energy” or WtE project. At
first, IEP was planning a 50 MW installation, which would also
use locally excavated “lignite” or “soft coal.” In many
countries where garbage is too “organic” or has too much liquid
content, coal or another fuel has to be added in order to raise
the caloric level of the burn. However, because coal-burning is
going out of vogue due to its contribution to global warming,
the lignite option was dropped, and IEP scaled back to a 30 MW
plant.*
Presented as a project that
will create “2,000 direct jobs and 8,000 indirect jobs in Haiti”
and that will “bring efficient solutions to various key problems
facing Haitian society today,” Phoenix is not a non-profit
enterprise. It is a business, a public-private partnership,
where the state will own 10% and the private entities will own
90%. In addition, the state – through the publicly-owned
Electricity of Haiti (EDH) – will promise for 30 years to pay
for the upkeep and operation of the factory and to buy
electricity “on demand,” according to IEP. Finally, the
government will donate 400 hectares north of the capital for the
factory site.
Founded in 2005, IEP has never
built an incineration plant. However, according to its website,
it is involved in one bio-digestion project and two wind
projects, one of them in Haiti. IEP says it will sub-contract
the factory construction to the Spanish firm Ros Roca, which
built a similar plant on Mallorca in that country.
IEP needs at least US$250
million to build the plant, according to Edward Rawson, vice
president of the company. In an email interview with HGW in
December 2012, Rawson said IEP is on the point of getting that
financing from the U.S. government’s Overseas Private Investment
Corporation (OPIC), which guarantees low-interest loans to U.S.
companies working in foreign countries. According to Rawson,
OPIC has “expressed interest in investing as a senior lender.”
However, he added, the agency is waiting for the results of an
IEP-sponsored study on the environmental impacts of Phoenix,
being carried out by the British firm Atkins.
The Pennsylvania business added
that the UN Environment Program (UNEP) is also doing a study,
this one for the Haitian government.
Asked for details, the UNEP’s
Andrew Morton responded, on Jan. 9, 2013: “Yes, UNEP is
conducting an independent review on behalf of the Government of
Haiti and in cooperation with International Electric Power. The
review is ongoing and the process is confidential.” Morton added
that the study could take another three to six months, but that
once completed, “a public report” will be published.
Haitian officials support Project
Phoenix
Project Phoenix falls right into the
government’s vision for energy, according to the Minister
Delegate for Energy Security, René Jean Jumeau.
“The project is part of our
Action Plan for the Development of Electricity,” he told HGW in
an interview on Oct. 10, 2012. “We aim to build factories that
will turn trash into energy all over the country. The
transformation of garbage into electricity will allow us to
achieve two objectives. The first is increase our energy output
and the second, linked to the first, is to better handle our
waste situation.”
The director of the capitol
region’s trash agency agreed. “Once this project is going, we
will have a much cleaner metropolitan region,” said Donald
Paraison, head of the Metropolitan Service for the Collection of
Solid Waste.
With the two major agencies on
board, IEP and the Haitian government signed two agreements in
May 2012, and they have already prepared the legal documents for
the eventual public-private business, known as a “Société mixte
anonyme” or “Anonymous Mixed Company,” in Haitian law. But the
project is blocked.
Rejections and Objections
IEP officials note that it appears the
Haitian government can’t move forward on the project, even
though it will be almost entirely privately financed.
“We are waiting on approval
from the multinational donor community,” Rawson said, because of
the project’s “size and complexity.”
IEP’s representative in Haiti
was more direct. “Certain ‘friends of Haiti’ are against the
project,” he sniped. “And the Haitian government is like a
child. It is afraid of moving forward because there were certain
objections to the project. Until those issues are addressed, it
won’t move ahead, because it is afraid it might lose its foreign
aid... But we are not giving up.”
In fact, the project was
rejected twice by the Interim Haiti Recovery Commission (IHRC),
formerly responsible for approving and coordinating all
reconstruction projects. It never approved Project Phoenix.
Shut down since October 2011,
there was nobody from the IHRC available to discuss the dossier.
However, a staffer at one of the International Financial
Institutions (IFIs) who was a consultant to the commission at
the time (in other words, a staffer from the World Bank [WB] or
the Inter-American Development Bank [IDB]) agreed to speak with
HGW on the condition that his or her name not be revealed, since
staffers are not allowed to speak with journalists without
express permission.
A second IFI employee who was
also aware of the dossier told HGW: “both the WB and the IDB
studied the project and both of them rejected it because it
would be terrible for Haiti.”
More recently, the IDB’s Gilles
Damais told HGW that since the Bank is not part of the project,
it “will issue neither an approval nor a disapproval.”
However, in his emails to HGW,
IEP’s Rawson repeatedly gave the impression that the IDB, the
WB, and other institutions will be involved, saying they have
been “engaged.”
Risks and doubts
In the telephone interview, the first IFI
staffer outlined the principle objections to the project: a lack
of transparency and the potential commitment of the state in an
activity where it is already losing millions of dollars.
In fact, the Phoenix Project
was presented without any open bidding process. IEP chose its
partners without any government supervision. For example, the
Spanish company Ros Roca will build the factory, Boucard Pest
Control will be one of the firms collecting garbage, and the
Atkins company is carrying out the environmental impact study.
“We haven’t been able to move
forward yet because there are international partners who want to
make sure the project is carried out in a manner that is
transparent, competitive and unbiased,” Minister Delegate for
Energy Security, René Jean Jumeau, confirmed.
More worrying for critics is
the financial commitment EDH and the government would make for
the next 30 years. Phoenix is a “Build, Operate, Transfer” or
“BOT” project, where the investors get paid to run the factory
during a period of time. They will “make money on their
investment and then leave,” the IFI employee told HGW.
“The project is a big liability
for the government,” he added, noting that the Haitian
government doesn’t have the capacity to manage the existing
electricity system. Indeed, a recent IDB report claims that
“[t]otal electricity losses are close to 70% of electricity
production with commercial losses representing estimated revenue
loss of US$161 million/year for EDH.”
IEP recognizes the challenge.
“After 1986, there was a popular movement that became populism
and then turned into demagogic governments. All of that cost the
country dearly,” the IEP’s local representative said, adding
that the “bad governments” allowed the population to make
illegal connections to the grid in order to maintain their
popularity.
By signing an accord with the
IEP, the state and EDH will promise to pay a private (and mostly
foreign) company for 30 years. Port-au-Prince has already
experienced what happens when the state misses a payment. The
lights go out.
Environmental questions
The Phoenix Project also has two main
challenges at the environmental level.
The first concerns Haiti’s
trash. According to many studies and sources, Haiti’s garbage is
too “organic” and moist, EDH’s Ronald Romain recognized. "Our
garbage doesn’t have the necessary calorie level” for an
incineration-power plant, he said.
To assuage doubts, IEP did a
two-month study that it claims proved “we have the calorie level
we need,” the local representative said. But, like the
environmental impact study being done by Atkins, it was paid for
and supervised by IEP. Thus, its results are not reliable. HGW
did not receive a copy of the report.
But another 2010 study – “Haiti
Waste-to-Energy Opportunity Analysis,” done by a private firm
for a U.S. government agency – raises many questions about IEP’s
claims. Looking at three technologies for turning garbage into
energy – combustion or incineration, gasification and
biodigestion – the report took a clear position.
“The waste stream in Haiti is
estimated to contain between 65% and 75% organics,” the report
notes. “Food waste typically does not make a good fuel or
feedstock for combustion or gasification systems. This is
because the waste has high moisture content.”
The last challenge for
Phoenix’s proponents concerns the health and environmental
risks. Because they are so great, there is a global
anti-incineration movement that has even reached cities like
Washington, DC. The reasons? Incinerators can emit a cocktail of
hundreds of poisonous chemicals and heavy metals like mercury,
arsenic and lead.
According to GAIA, the Global
Alliance for Incineration Alternatives, “in some countries, like
Mexico, Brazil, Chile, and Argentina, there are state or
provincial laws, or municipal ordinances, which prohibit the
burning of trash.”
Nevertheless, the local
representative of IEP said the Phoenix installation would not
have any negative effect on the environment or on health. “After
the trash is burned, the emissions will be treated using a
sophisticated filtering system,” he said. “This will allow us to
remove the dangerous and sometimes valuable heavy metals. Our
emissions will be less toxic than those coming from the existing
electricity plants… and less toxic than the smoke that comes
from the open-air burning of trash, also.”
But anti-incineration groups
like GAIA say “even the most technologically advanced
incinerators release thousands of pollutants that contaminate
our air, soil, and water,” citing numerous studies to prove
their point.
Will the bird emerge from the ashes
again?
The future of the Phoenix Project is not
certain.
EDH operates at a loss, and two
studies remain unfinished. OPIC has not yet given the green
light. In addition, many wonder if a government that cannot
prevent the illegal felling of trees and use of Styrofoam dishes
(banned since last year) can adequately supervise an
incineration plan.
IEP claims it has the interest
and even the support of many actors inside and outside of Haiti.
But HGW discovered many reserves. And many risks.
The IFI employee thinks that
all the criticism means that perhaps “the project will die on
its own.” Perhaps.
Or perhaps, if Haitian and
international authorities continue to meet behind closed doors,
to carry out projects without transparency, and to insist on
speaking anonymously, this Phoenix, like its namesake, will be
reborn from its ashes.
* Note: IEP notes that lignite is not
definitely off the table, according to executive Edward Rawson
in an email addressed to HGW on Dec. 10, 2012: “[T]he creation
of a [lignite] mine and exploitation in partnership with the
Government of Haiti remains part of the current agreement
between IEP and GOH. This may eventually lead to the development
of a power plant near Maïssade.” The local IEP representative
added: “The foreigners refuse to let us use lignite because it
pollutes too much. However, in their countries, they use coal…
In fact, coal is what made Pittsburgh rich, for example!”
Haiti
Grassroots Watch is a partnership of AlterPresse, the Society of
the Animation of Social Communication (SAKS), the Network of
Women Community Radio Broadcasters (REFRAKA), community radio
stations from the Association of Haitian Community Media and
students from the Journalism Laboratory at the State University
of Haiti. |
