Staggering cost of running city's incinerator

Letter to The Courier, Tuesday 18 October 2011

Sir, — Since Dundee City Council started to send waste to the DERL incinerator in 2000, it has spent £13,060,460 in gate fees (the fees charged to the council for each tonne of waste at the plant).
Sending the same amount of waste to landfill would have cost £20,120,906 including landfill tax. On the face of it, this would seem to vindicate the council.
However, when the council rescued the plant from bankruptcy in 2004, it took on the plant's debts, which stand at £42 million.
The plant continues to make a loss of £500,000 each year. Further costs related to the rescue bid included £lm to buy the plant, £2.46m on improvements and £3.3m in loans, adding up to a further £6.76m. In total, the DERL plant has cost Dundee City Council £62,320,461.
The DERL incinerator was Scotland's first private finance initiative project, and it has been very costly.
There is also the "level playing field subsidy" paid by the Scottish Government. Dundee, Angus and Perth & Kinross councils pay £28 for each tonne they send to DERL, with the Scottish Government paying another £28, making a total of £56 per tonne.
Altogether, since 2000, the three local authorities have burnt 635,070 tonnes of waste at DERL. This has cost them £17,781,960 (at £28 per tonne), with the same amount again from the Scottish Government.
To calculate the total burden on the public purse, we need to add together:
Debt taken on by Dundee City Council - £42,500,000; other costs - £6,760,000; gate fees - £17,781,960; government subsidy £17,781,960.
This gives a total of £84,823,920.
What a pity this was not invested in recycling.
Michael Gallagher.
33 Precinct Street,
Coupar Angus.