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The Decision in Guelph vs SUBBOR

In 1998, with great fanfare, the City of Guelph and Super Blue Box Recycling Corp (SUBBOR) entered into a partnership whereby the city would be a full-scale test site for SUBBOR's municipal waste trea...


In 1998, with great fanfare, the City of Guelph and Super Blue Box Recycling Corp (SUBBOR) entered into a partnership whereby the city would be a full-scale test site for SUBBOR’s municipal waste treatment technology. SUBBOR built a $20 million facility and the federal government invested $5 million in the project. The facility was designed to sort municipal solid waste, anaerobically digest the organics and produce recyclables, peat and gas (to generate electricity).

Nine years later, the public-private partnership (P3) between the forward-thinking city and innovative technology company is dead. A judge’s ruling in the summer of 2007 confirmed the end. (See Cover Story, page 8.)

For municipalities leery of partnering with new technology/environmental firms, and for environmental entrepreneurs desperate for a willing host for a full-scale demonstration of their great idea, it might seem that all is lost. But it is not.

What went wrong?

With any failed relationship, it’s possible to point to what went wrong and learn from the mistakes. In 2002, the city asked SUBBOR to prove that the technology was working at full-scale. When proof wasn’t forthcoming, the city sent a letter to the company terminating the relationship. The details are more complex, but that’s the macro perspective for the falling out. That the company was unable to show the city that the system worked at full-scale lies at the heart of the failed relationship, and the judge’s decision appears to support that.

The city’s successful relationships

The City of Guelph is to be commended for embracing made-in-Canada innovative environmental technologies. The city has demonstrated that partnering with an emerging technology company can be a win-win situation. The partnership is with Lystek International Inc. is proof that Guelph can be a good partner.

Lystek was formed in 1999 as a means of commercializing biosolids waste treatment technologies developed at the University of Waterloo. In cooperation with Guelph, over a three-year period Lystek was able to successfully develop its biosolids treatment and processing technology through bench-scale, pilot-scale and full-scale testing.

Proof of the successful relationship can be found in the fact that Lystek has a full-scale commercial process up and running in Guelph. It’s now looking to build facilities in other Canadian municipalities.

Frank Hovey, President of Lystek, believes the successful relationship between his company and the city is a case of being at the right place at the right time. The city needed a solution for its biosolids disposal challenge and Lystek needed a municipal partner for pilot-scale and demonstration-scale testing. He also mentions good communication between the parties, plus the successful performance of the technology.

“At the end of the day, the system has to perform,” remarks Hovey. “Our full-scale commercial system in Guelph produces 11 dry tonnes a day of ‘Class A’ biosolids.”

SUBBOR’s successful relationship

SUBBOR is the Toronto-based subsidiary of Eastern Power Ltd. Gregory Vogt, a University of Toronto engineering science graduate co-founded Eastern Power with his brother, Hubert, and Herman Walter in 1986. As engineering consultants in the energy and environmental fields, the trio was convinced that a profitable business could be developed by using methane from landfills to produce electricity.

When Eastern Power cut a deal with the City of Toronto to build, own and operate a power plant at the city’s Brock West landfill, the utilization of landfill gas to create electricity was in its infancy in Canada. The venture with the City of Toronto at Brock West landfill was so successful that they agreed to do the same at Keele Valley landfill.

Eastern Power’s Brock West Power Plant in Pickering produces 28 megawatts of electricity and the Keele Valley Power Plant in Vaughan has 32 megawatts of capacity. At one time, the power plants were the world’s second and third largest landfill landfill-gas fueled power plants. Now such systems are becoming common.

Conclusion

I could write the typical clichs about having open communication, measurable milestones and a dispute resolution process in place when entering into a P3, but everyone knows these things already. My biggest fear about the Guelph/SUBBOR case is that it might cast a chill over the creation of P3s at a time when they are desperately needed in Canada. The advantage of a municipality utilizing made-in-Canada innovative technologies far outweighs the disadvantages. One setback between a city that has shown it can work with the private sector in other ventures and one environmental company that has shown that it can work with a municipal partner should not end the pursuit of solutions that are better for the environment and more economical.

John Nicholson, M.Sc., P.Eng., is a consultant based in Toronto, Ontario. Contact John at jnicholsonjr@rogers.com


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1 Comment » for The Decision in Guelph vs SUBBOR
  1. M Reilly says:

    The Lystek technology has not been functioning full scale in Guelph.
    They process about 15 percent of Guelph’s sewage sludge biosolids.
    That is less than 60 days per year.

    The other 85% is trucked to landfill as dewatered sludge solids.

    Landfilling protects farmland from the toxic metals and chemicals in Lystek processed sludge. It also protects the taxpayer’s wallet, since the hydro demands and chemical costs for Lystek processing adds up.

    Although Guelph has been primarily relying on landfill for at least the past 5 years, Lystek is in an aggressive campaign to promote their technology and licence facilities that they own themselves.

    Lystek continues to suggest that Guelph has a full scale operation.

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