Government working to finalize ReGen negotiations with Dart

(CMR)  Phase 1 of the George Town landfill remediation is almost completed as work continues between the Cayman Islands Government and Dart to finalize project agreement negotiations and reach financial close, Premier Wanye Panton announced on Monday.

Mr. Panton was providing an update on the progress of the new Integrated Solid Waste Management System or “ReGen” project in Parliament. The project is a public-private partnership between the Government and Dart.

“In addition to steady progress towards financial close of this important national project, progress continues on capping and remediating the main mound at the George Town Landfill,” the Premier stated.

“I am pleased to be able to confirm to my colleagues and the country that Phase 1 of the landfill remediation is nearly complete. The final layer of soil will support the growth of grasses and shrubs that will provide an attractive, green surface that is also resistant to erosion,” Mr. Panton told Parliamentarians.

Capping began under the previous administration in March 2020 when an initial layer of fill was placed over the waste mound. In November 2021, this administration commenced construction of the engineered cap, including the geosynthetic liner and gas management system.

Mr. Panton credited the previous administration for their efforts to reach the commercial close on the project negotiations with Dart, with the signing of a project agreement on  26 March 2021. However, he said the Progressives had not painted an accurate picture regarding the level of work that remained after their administration signed that agreement.

“While there have been suggestions from the Opposition that our PACT Government inherited a project where the negotiations were essentially completed, and we just needed to get on with construction of the project, I want to make it absolutely clear that this simply was not the case.   In fact, Mister Speaker, I think it would be fair to say that nothing could be further from the truth,” he stated.

He pointed out that while a number of areas had been agreed upon, there were still a number of significant conditions precedent remaining to be negotiated when the previous administration signed that project agreement at the end of March 2021.

The 26 March 2021 Project Agreement, which the opposition approved just before the General Election,  envisioned a financial close target date of 30 September 2021. However, there were still outstanding items to be agreed upon, Mr. Panton said.

“It is my opinion that there is quite simply no way that the Project Agreement that was signed could reach financial close in the timeframe that was being promoted. Not unless one, or both, parties were prepared to make significant concessions on some key points in the negotiations.   Concessions that would run the life of the contract and, quite possibly, concessions that the people of the Cayman Islands would quite literally be paying for over twenty-five years of the system being in operation,” Mr. Panton added.

He said the project plans did not have any space allocated for the DEH to continue their solid waste collection operations and that the project agreement required the DEH to be relocated on a timeframe that, much like their projected financial close date, would be nigh on impossible to achieve.

“This was not a project that was ready to move to construction, and frankly, I think it is unfortunate that it was presented to the public that way,” he said.

Mr. Panton said a review of ‘ReGen, Cayman's Energy & Recycling Centre' by the Office of the Auditor General found that it did not represent value for money and identified opportunities to address and try to mitigate this as the negotiations are being finalized.

“I would like to reassure my colleagues in this Honourable Hous, and the people of the Cayman Islands, that we are committed to taking every step that we can to address this concern and ensure that this incredibly important and much-needed national project is a value for money proposition for the country, and meets our needs now and into the future,” Mr. Panton promised.

As negotiations continue, that projected timeline to financial close has shifted slightly from 31 October to the end of November 2022.

The Premier also sought to clarify that the “last estimated cost” for the facilities was not $105 million, as was stated by the Leader of the Opposition recently, but was projected to cost at least CI$205 million when the contract was signed in March 2021. This was an increase over initial cost forecasts that was tied to a decision to increase the capacity of the facilities in response to improved data regarding the amount of waste that would need to be treated.

He said. given the data, the previous administration's decision to increase the capacity of the facilities before signing the project agreement with Dart was a “sensible one.”

While cost is a concern, the Premier said his administration is working wherever possible to keep costs down despite global supply chain issues and procurement challenges.

“Our goal is to ensure ReGen represents a financially viable, long-term solution for sustainable solid waste management for all three of our islands.

Meantime, the Premier said the Environmental Impact Assessment – or EIA – for the project, which had been paused, has been restarted.