$70M waste-to-energy facility to rise in Naga
By Jason B. Neola
NAGA CITY — The city government here is embarking on novel approach to address its garbage disposal concern which stakeholders describe as “the first of its kind in the Philippines.”
The project, costing $70 million, was formally launched January 15, this year, at the Avenue Square Convention Hall under a build-operate-transfer (BOT) scheme.
Groundbreaking rites were held at the Balatas dumpsite earlier in the morning which was led by Naga City Mayor John G. Bongat, with DILG Secretary Jesse M. Robredo, former Naga City mayor, as guest of honor.
Energy Undersecretary George Yorobe, a Nagueno, and other regional and provincial officials from the DENR, EMB, as well as local sectoral representatives were also present to bear witness to the important occasion.
Realization of the project is anchored on three documents: the contract for the establishment and operation of a waste to energy facility which was executed by and between the City Government of Naga and the Korean-based CJ Global Company on May 20, 2010; a supplemental contract and its approval by virtue of Sangguniang Panlungsod Resolution No. 2010-281 which was signed last
August 24, 2010 to ratify the two contracts.
Technically dubbed “Waste to Synthesis Gas Project,” the facility will convert the city’s solid waste to electric energy through melting-gasification, the first to be introduced in the Philippines.
Yeon-Joo Choi, chairman of the CJ Global Co., Ltd., said the German technology-based process, which is environment-friendly, will generate low-priced electricity which “our company will be made available to local electric cooperatives and/or other existing power distribution utilities.”
Gasification, not incineration
City Councilor D.C. Nathan A. Sergio, who is also the chair of the SP Committee on Environment and Energy, said the $70 M facility will transform solid waste and biomass into electricity using the process of gasification. “[The product] is green energy, sourced purely from waste.”
“Unlike ordinary incineration, gasification is zero-waste and there will be no toxic-fume emission or effluent that will go to the grounds or run to any body of water,” Sergio said.
Mayor Bongat said apart from electricity, the process can also produce asphalt and methanol as by-products which can be used for road construction and fuel for motor vehicles, respectively.
The facility would generate an estimated output of 18 megawatts of electricity from the approximately 200 tons of solid waste generated daily by the city’s 27 barangays.
Oscar P. Orozco, head of the City Environment and Natural Resources Office, said the city is now studying certain propositions that will facilitate the inclusion of the Metro Naga towns in the project.
Metro Naga towns are the 14 neighboring municipalities of the city which have been collaborating with each other under a “big brother, small brother” development alliance.
Metro Naga mayors who attended the formal launching signified interest in disposing their waste to the facility despite the tipping fees that will be collected from their respective municipalities.
The supplemental contract, which was executed with Mayor Bongat on behalf of LGU Naga, modified the profit sharing provision of the original contract that says: “…the CJ Global shall remit to the city the amount equivalent to 5% of its net profits before income tax, generated from its operation of the facility…” which shall be due and demandable not later than April 30 of each year.”
The provision was changed under the supplemental contract. Instead of the 5% of its net profit, the new provision requires: “…the CJ Global to “remit to the city the amount equivalent to 1.5 percent of its gross profits, if higher than 5% of net profits before income tax, generated from its operation of the facility…”
The provision also stated that the corresponding amount of money to be remitted “shall be due and demandable not later than April 30 of each year” within the 20-year efficacy period. Review of the profit sharing agreement will be made after five years.
Mayor Bongat underscored: “The city government is trying to do the best way it can so that the venture will become mutually beneficial to the interest of both parties, which include the constituents of the city.”
Engr. Joel P. Martin, chief of the City Solid Waste Management Project, said the waste-to-energy facility which will be constructed either in Barangay Balatas or Barangay San Isidro, here, has formally shelved the proposed establishment of Materials Recovery Facility (MRF) in the neighboring Magarao town.
The Naga-Magarao MRF partnership proposal, started in 2007, has drawn protests from the residents of Magarao.
Presently, the city is looking for a suitable site with no less than four hectares in size inside the city’s territory.
A member of the city council expressed apprehension in locating a site adjacent to or near the present Balatas dumpsite, considering the mushrooming of residential districts and commercial establishments near the area.
He said problems on land use and zoning might occur in the near future if the facility would be situated in Balatas.
‘More beneficial to the city’
The selection of the CJ Global as partner in the establishment of the facility was made possible thru an endorsement by then Mayor Jesse Robredo to the Sangguniang Panlungsod.
In his June 29, 2010 letter to the Sangguniang Panlungsod, Robredo explained that CJ Global’s proposed agreement was “found by the City Legal Officer to be more beneficial to the city” as it offers higher share in economic gains, preference to local labor and contractors, and commitment to provide cheaper power rate for Naga.
Robredo also mentioned other factors in favor of CJ Global such as: projected creation of secondary industries that will be created from by-products of the gasification process like methanol for LPG supply for Naga and for household, commercial and transportation needs and the provision to ensure full compliance with environmental laws and commitment to ensure the safety of the public.