by Haiti Grassroots Watch (Haiti Liberte)
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.
A typical street in downtown Port-au-Prince, where mounds of garbage,
vendors,
and pedestrians battle for space.
Photo: Jude Stanley Roy/HGW
A garbage-powered plant in Mallorca, Spain, built by the company which
IEP says would build
Haiti's proposed plant.
Photo: Ros Roca
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