Clutha hopes to turn costly landfill headache into multimillion-dollar revenue machine

A SOUTHERN council will now investigate converting a landfill liability into an asset, following a decision on Thursday last week. Clutha District Council began looking at options for its Mt Cooee landfill in Balclutha last February, following news it could run out of capacity within months. Projections at the time suggested that could lead to potential costs of $157,000 a month for exporting rubbish to out-of-district landfills. An extension to consents in April last year provided a stay of execution for the council, but updated projections during its May meeting this year showed the landfill would spill over by August 2027. However, during Thursday’s meeting, staff presented councillors with a solution that could turn the landfill into a multimillion-dollar revenue generator for the district. In a report prepared by infrastructure strategy and delivery group manager Donna McArthur, staff provided a draft cost-benefit analysis of waste-export and landfill-extension options. Although requiring further investigation of a formal business case, extending Mt Cooee to include a gas capture unit could generate $18.7 million in revenue over 25 years, the report said. By contrast, the transfer station option, which would involve closing the landfill and exporting rubbish out of district, would cost ratepayers $47.8m during the same period. Taking other factors such as the relative construction and operational costs into account, extending the landfill became a viable, potentially cheaper option, the report said. “Current modelling suggests that the landfill cell option has the potential to generate approximately $18m in revenue (in the form of ETS levy credits for gas capture and destruction) over a 25-year working life. “A landfill cell is a more dynamic financial and operational model. Government landfill and emissions-related levies are intentionally set at a level that it penalises landfills who are not proactive and encourages initiatives such as landfill gas capture. “If landfill gas capture is designed, budgeted and operated well, it can reduce the net cost of operating the landfill and may generate revenue over the 25-year life of the cell and well beyond. Over time, that benefit can be used to offset wider waste costs and reduce the long-term cost exposure for ratepayers.” Although a transfer station had lower set-up costs, whole-of-life costs were lower for a landfill extension, the report said. “The transfer station option has lower capital cost, but it leaves council exposed to external transport costs, external gate fees and the pricing decisions of receiving landfill operators and uncertainty of long-term resilience of our ability to fund and manage waste long term.” During discussion, councillors appeared broadly in favour of a revenue-generating option. Operating a gas-capture landfill meant Mt Cooee could also take out-of-district rubbish from other councils, generating a further potential revenue stream, Cr Larry Frost said. Cr Dane Catherwood said, although he had questions over debt-funding for capital works, he saw long-term potential in the landfill as a revenue-generating asset. Councillors voted to begin a formal business case for the project, while assessing detailed project costs. richard.davison@odt.co.nz

Clutha hopes to turn costly landfill headache into multimillion-dollar revenue machine

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