Up to 2400 tonnes of recycling material will be trucked to Christchurch for processing after the launch of Dunedin's new kerbside collection service next year because of delays building a recycling plant near the Green Island landfill.
The Dunedin City Council this week confirmed Hall Bros, one of four companies involved in providing the new kerbside collection service in Dunedin from next year, had run into difficulties financing the planned recycling plant.
The problems emerged last month and a new financial backer had already been found, but it meant the building would be delayed by "two to four months", council water and waste services manager John Mackie said.
That meant about 600 tonnes per month of recyclable materials, other than glass, would have to be trucked to Christchurch from the launch of the new collection service on February 28 until the recycling plant was ready, possibly not until June, he said.
Glass recycling would still be sorted on the collection truck before being transferred to containers and taken by rail to Auckland as planned, he said.
Hall Bros was part of a consortium of four companies led by EnviroWay, a division of EnviroWaste, that earlier this year secured the $24.8 million, seven-year contract to provide the new collection service.
As part of the deal, Hall Bros was to finance and build the shell of a building to house the new material-recovery facility on land the company owned near the Green Island landfill, Mr Mackie said.
Another partner, Fullcircle - part of Carter Holt Harvey - was to equip the building, while Cargill Enterprises provided labour.
Hall Bros owner Doug Hall declined to comment yesterday and Mr Mackie would not discuss details, saying it was "their private business".
"But their source of revenue that they were going to invest in this didn't pan out and they had to withdraw from the role of being landlord," he said.
A new development partner, The Richardson Group Ltd, from Invercargill, had been brought in instead to finance the building, which would still be built on Hall Bros' land, Mr Mackie said.
Councillors at Monday's infrastructure services committee meeting would be asked to approve a four-month extension to the end of the collection contract, to from February 28 to June 30, 2018, at a cost of $1.2 million, Mr Mackie said.
That would raise the overall cost of the new service to $26 million, but Mr Mackie said the council had already budgeted for that amount in its long-term planning, to ensure the service could continue until the end of the 2017-18 financial year.
The council would still receive rebates from the sale of the recycled materials trucked to Christchurch, but negotiations were continuing with EnviroWay over who would pay trucking costs, he said.
"They are looking for support in that area. We are saying `No, that's your risk'," he said.
Mr Mackie could not say what the cost would be yesterday, but "back-loading" - making use of empty trucks returning to Christchurch after deliveries - would help reduce costs.
He hoped the negotiations would be resolved "before Christmas".
"We want to get it sorted pretty swiftly."
Kerbside collection:
• New black bag, blue bin and wheelie bin collection service to be launched on February 28 next year.
• Cost $63 per household, paid by uniform annual charge.
• Financing problems mean planned recycling building next to Green Island landfill delayed by "two to four months".
• Collection service to start as planned; non-glass recyclables trucked to Christchurch until recycling building ready.
• About 600 tonnes per month; possibly 2400 tonnes over four months.
• Cost of trucking not yet known; negotiations continuing over who will pay.
