Orgaworld Contract: Ottawa - Video
Orgaworld Contract Video Transcription:
Why was it necessary to go before the environmental review tribunal at the start of the program? The answer to this is quite simple, Orgaworld needed to protect the city of Ottawa, to ensure that the Ministry of Environment gave us the licenses to receive the threeway streams that they had contracted us to deliver. Orgaworld was awarded a competitively tendered contract to build a high tech facility to process 100,000 tons of source separated organics with a putter pay of $80,000.
Source separated organics is defined in the contract as kitchen waste. The plant was successfully constructed to provide the capacity to produce 100,000 tons of SSO on an annual basis. Orgaworld commissioned the plant in January of 2010 and has been continuously processing SSO on behalf of the city with no disruptions.
The city has not provided consistent delivery of SSO throughout the year. Quantities delivered from the city range from a high of over 9,000 tons per month to just 2,200 tons per month. The contract that was signed with Orgaworld provided three separate scenarios. Scenario one is a current scenario, where we are processing SSO delivered to us that does not include plastic bags, diapers or pet waste. Scenario two would permit the delivery of SSO in plastic bags. Scenario three would provide for SSO being delivered in plastic bags as well as the receipt of diapers and pet waste. Scenarios two and three would both increase the convenience to Ottawa taxpayers to participate in this program which in turn would result in significantly increased volumes. This has been our experience of processing waste in York and Toronto, where plastic bags, diapers and pet waste are included.
Currently, the Ottawa plant is not designed to process waste in plastic bags. This would require a further investment in Orgaworld to bring our plant up to that capacity. This is a situation that we currently have in our other Ontario plant in London, Ontario, where plastic bags are accepted.
At the beginning of this process, waste is separated from the plastic bags so that they become part of the residual and are not incorporated into the compost that is produced by our process.
Orgaworld was surprised and disappointed with the recent ruling of the arbitrator. The arbitrator's ruling clearly agreed with the position of Orgaworld, that peak leaf and yard waste is not to be included as part of the city contract. It further clearly made a distinction between kitchen waste as SSO and leaf and yard waste. For some reason, which we do not understand, the arbitrator still concluded that peak leaf and yard waste could be included in the contract with SSO. It's for this reason that Orgaworld will be appealing this ruling.
I believe it's important to remember that the audit recently conducted by the city auditor was of the city of Ottawa's SSO program in terms of how it was designed, developed and delivered. This was an audit of the city processes, it was not an audit of Orgaworld. Orgaworld was never interviewed by the city auditor until after the audit was complete. At the last moment, the new city auditor toured the London and Ottawa facilities to gain a better understanding of how our plants operate but we were not interviewed as part of the audit process. It was for background purposes only.
The contract is very clear about cancellation of the contract for convenience. Schedule ten of the contract specifically identifies the cost of exiting the contract to the city through years one through ten. At this point in time, if the city of Ottawa was to choose to exit this contract, the cost of doing so would be an excess of 56 million dollars. It's important to remember that this was a competitively tendered contract, where Orgaworld invested over 25 million dollars of its own funds to build this facility to service the residents of Ottawa.
Orgaworld has consistently proposed to the city of Ottawa that it would be prepared to sit down and renegotiate the contract in terms of expanding the feedstock. Expanding the feedstock to include scenarios one or two or plastics, diapers and pet waste would increase the ease of use of the program and would promote increased participation. The benefit of this would be that, first of all, the city would very easily achieve its putter pay of 80,000 tons and secondly the peak leaf and yard waste would be able to be sent to Trail Road for processing at a greatly reduced cost for taxpayers.
Orgaworld currently processes all of the leaf and yard waste as well as the kitchen waste sent to its plant 42 weeks of the year. For the remaining 10 weeks of the year, five weeks spring and five weeks fall, peak periods, Orgaworld processes all of the waste it is permitted to under its daily ten inch allowance that can be safely processed. It is important to note that the density of kitchen waste is five times more dense than fall leaf and yard waste. As a result, the plant is being asked to process five times the volume than the plant was designed to process in the first place.