December 15, 2011
From Ottawa Mayor Jim Watson’s blog:
Yesterday Council faced an important decision – our business deal with Plasco Energy and I wanted to share the thoughts I expressed during our deliberations:
In 2005, a small company – Plasco Energy – with eight employees at the time approached the City with a unique approach. They had technology to take garbage right off the back of the truck, without pre-treatment or drying, and convert it into electricity. This company proposed to create energy from waste – with lower emissions to air, water and land than putting the same garbage in the landfill.
But the City made it very clear to Plasco – and Plasco understood right from the start, that the municipality could not be asked to take a risk on the cost of developing new technology. Of course, we are interested in having that new technology and better results for the environment. But these risks are for the private sector to take – these risks are NOT for the taxpayers or residents to take. We would never allow the people of Ottawa to assume the multi-million dollar risk for the development of a new technology.
Back in 2005 Plasco set out to prove its potential with a demonstration plant paid for by private sector investors. They also set out to prove to the ministry of the environment that very low emission levels could be achieved. Finally, they set out to prove that they could get investors to build a full commercial plant without a capital contribution from the City.
In 2008, the City of Ottawa agreed to provide waste for the demonstration project. Many Councillors present on the current Council supported that decision. In return, the City would get preferential terms for being an early adopter of the new technology.
Today, Plasco has grown from 8 people to more than 150 employees all here in Ottawa. It has spent more than $150 million in our community and in our Province over the past five years.
Furthermore, Plasco has created some of the most desirable kind of jobs for any city to attract – in engineering, process design, high-end fabrication and new technology innovation. They have attracted the kind of innovative jobs and innovation that have the potential to grow a new industry, to diversify our economy and potentially make a global impact.
This company has attracted more than $250 million in new investment in Ottawa since the City first sat down to consider a joint venture opportunity. Investment capital is coming here from across the country and around the world: $45 million from Canada; $52 million from California; $25 million from the Midwest US; $75 million from New York City; $25 million from London and $10 million from the balance of Europe. And these investments are not coming from venture firms who take long-shot bets, but from private equity funds that invest in solid companies with high growth potential – respected companies.
So what we have here is a potential world player, home grown in Ottawa, with whom our municipality is looking to partner with no up-front risk to us. Over the course of the last year, we have spent a lot of time discussing how we can diversify our local economy away from its traditional reliance of the Government of Canada. We have also lamented the loss of thousands of high technology jobs in our City.
So is all our talk about supporting the diversification of our economy just talk, or are we serious about it?
If we are serious about it, and I believe we are, then now is the time to say “YES” to this opportunity. We cannot be a bystander on this opportunity. Given the opportunity to be the first municipality in the world to conclude an agreement with PLASCO, a homegrown company that is poised to become very successful, I am in complete support.
This is a business deal from which the City will benefit as Plasco successfully moves to large scale commercialization. The City will benefit by sharing in Plasco revenue, it will benefit by increasing the life of our landfill, and it will benefit directly through increased economic diversification. And let me tell you I have seen my share of divisive and never-ending debates about where to locate “the next landfill” in our community.
No one wants the next landfill anywhere near their neighbourhood. Nor does anyone around this table want to think about where they will find the quarter of a billion dollars required to locate and build the next landfill facility in our City.
With this proposed agreement, the environment benefits on all counts from day one. And the City maintains its commitment to increased diversion and recycling as core elements of our City’s environmental policy.
Our City Manager has lead some very hard-nosed negotiations – exacting improvements across the board to the City’s position in relation to the original agreement signed back in 2008 with Council’s full endorsement.
For our residents’ sake and for our City’s sake, I hope Plasco is successful. And if Plasco is not successful – and let me repeat that I really do hope this local start-up succeeds – then not a cent of taxpayer dollars will go into the facility. The risk to the City is near zero. The benefits to our residents, our taxpayers, our City and the environment are numerous and long-lasting.
For the original blog post, please click here.