The Cebu City government has formally terminated its contract with the Philippine Bio-Sciences, Co. Inc. for the construction of the waste to energy demonstration project at the Inayawan Sanitary Landfill.
Mayor Tomas Osmeña claimed he was disappointed because the company did not follow the terms of their agreement.
On June 12, the mayor wrote a letter to Samuel West Stewart, president and chief executive officer of Philbio, informing him of the city’s decision to terminate the agreement.
“Effective immediately, the aforementioned memorandum of agreement is deemed terminated for failure of the Philbio to fulfill its roles and obligations as stipulated under Section 9— ‘Termination of Agreement,’” Osmeña said in his letter.
Specifically, he cited that the company failed to conduct a timely demonstration that the 100-kilowatt pilot power plant facility has the capacity to produce the desired energy output.
Likewise, Osmeña added that Philbio failed to submit a feasibility study for the main project within the two-year exclusivity option.
“Since these inactions have proven detrimental to and have delayed implementation of the city’s waste management plans, we have no other recourse but to serve this notice,” Osmeña stressed.
During its regular session last Wednesday, the City Council has confirmed the mayor’s decision to terminate the agreement.
The city has signed a memorandum of agreement with Philbio on January 19, 2006 for the construction of a model plant for the waste to energy facility at the Inayawan Sanitary Landfill. The demonstration project was inaugurated in November last year.
The biogas pilot power plant was designed to treat and reduce the garbage dumped at the city’s landfill by converting it into gas that will produce electricity.
But several months after the project’s launching, Osmeña announced the city may no longer push through with the project because he finds it disadvantageous to the city.
He said the offer of Philbio is not acceptable because with a share of only 15-percent of the company’s annual gross sales, the city would be at a disadvantage.
The mayor also said that there is an issue of incompetence because the firm is not performing its job.
Osmeña also said earlier that talks between the city and PhilBio were disrupted after Ricky Beltran, its manager for the Visayas, resigned from the company early this year.
The mayor said with the termination of the contract with Philbio, the city would open the project to other interested contractors that can give a better offer. — Wenna A. Berondo/LPM