Liberals reveal $1.7 million trigeneration cost blowout

City of Sydney Liberal councillors have made the startling claim that Council was last week asked for an additional $1.7 million for the City’s trigeneration scheme.

Liberal councillors Edward Mandla and Christine Forster said the costs were to cover engineering and design consulting for Cogent, the company that is building the trigeneration scheme. As a result, consulting costs have now gone from $1.1 million to $2.8 million.

Initially, Crs Mandla and Forster were reluctant to share the figures due to commercial confidentiality agreements that restrict the dissemination of information on trigeneration. But they later revealed the cost blowout.

“This blowout of over $1.5 million, simply for consulting fees to be paid to Cogent, is absolutely incredible,” said Mr Mandla. “It is not the domain of local government to be providing electricity and one of the main reasons is the cost of it.”

Mr Mandla and Ms Forster have deep-seated opposition to trigeneration, labelling the costs incurred by the scheme as unacceptable.

“The size of this project is huge – it is worth over $400 million,” said Ms Forster. “Due to the size of this project costs will inevitably blow out and we have seen it happen here recently.

“Trigeneration is simply not the most efficient method of electricity production.”

Living Sydney Councillor Angela Vithoulkas did not divulge statistics but is concerned about trigeneration cost blowouts. “If I could say how much has been wasted on trigeneration, we would be horrified,” she said.

Although Ms Vithoulkas expressed her support for trigeneration, her main concern was with financial management. “I am not opposed to the project overall. What concerns me is the lack of fiscal management and transparency to the ratepayer with such a large project,” she said.

Nonetheless, an official spokesperson for the City of Sydney said costs for the trigeneration project remained under control.

“The interim trigeneration master plan of 2010 estimates that a trigeneration network … would cost $440 million. This estimate has not changed,” the spokesperson said.

The City of Sydney spokesperson emphasised despite the high costs incurred for trigeneration, the scheme would be beneficial in the long-term. The spokesperson said the capacity of trigeneration – 360 megawatts – would be reached by 2030.

“Trigeneration plants are super-efficient local energy generators that can supply precincts or clusters of surrounding buildings with low carbon electricity, heating and cooling,” the spokesperson said.

A devout supporter of trigeneration, Greens Councillor Irene Doutney remained optimistic the short-term cost blowouts, which she said were minimal, would be worth long-term gains.

The Liberal councillors and Ms Vithoulkas were also highly critical of the commercial confidentiality agreements surrounding the trigeneration project.

Ms Vithoulkas said the public was not adequately informed how their money is being spent on Council projects.

“Confidentiality agreements mean that when there is poor financial management and poor fund expenditure with the trigeneration project, they are hidden from the ratepayer,” said Ms Vithoulkas.

Ms Forster was also measured in her comments and was conscious of not sharing information that crossed the lines of confidentiality agreements. “I’d have to carefully refer to the minutes of the last meeting to see if there were cost issues,” said Ms Forster before sharing cost blowout figures.

Ms Forster was forced to defend herself last month against allegations she failed to declare a conflict of interest during her vote against the City of Sydney’s trigeneration plans in November.

Former City of Sydney Greens Councillor Chris Harris complained that due to Ms Forster’s employment as the Asia Oil news correspondent for Platts – a specialist news service catering for the Oil industry – it represented a conflict of interest on the matter. Ms Forster dismissed the allegation, arguing her role as a journalist had given her “in-depth knowledge of the Australian gas industry”.

The official City of Sydney spokesperson said Council was transparent in its dealings on trigeneration. “The City’s trigeneration project to produce low-carbon energy has been completely transparent with regular reports to Council throughout the course of the project,” the spokesperson said.

Ms Doutney was of the same opinion as the official City spokesperson. “It has not appeared as if confidentiality agreements have covered up any aspect of the project,” she said.