New waste-to-energy contract before Guam Legislature - KUAM.com-KUAM News: On Air. Online. On Demand.

New waste-to-energy contract before Guam Legislature

by Mindy Aguon

Guam - Settlement discussions between the Government of Guam and Guam Resource Recovery Partners has resulted in a settlement and a new proposed waste-to-energy contract that is up for legislative approval.

A new contract has been negotiated between Guam Resource Recovery Partners and the Guam Economic Development Authority.  For more than a decade the original contract signed back in 1996 was tied up in litigation.  According to news files, the company eventually lost its legal battle to uphold the validity of the incinerator contract due to a liquidated damages provision that was deemed illegal by Guam's high court.  But GRRP argued that the contract itself was fine and could be reworked. The previous administration however never responded and in 2011 the company claimed a breach of contract to renegotiate a service contract to iron out the details of the relationship between the government, the company and a waste to energy facility for the island. The suit sought $20 million in damages.

The superior court ordered the parties into mediation and the discussions resulted in a mediated settlement that Taitano says is more favorable to the government than the previous contract.

In a letter to Speaker Judi Won Pat, GEDA administrator Henry Taitano wrote that significant components of the new waste-to-energy contract and project include:

- Chevron will partner with GRRP to finance and operate the WTE facility
- Based on the project proposed by GRRP and Chevron, the life of the Layon landfill will be significantly extended, avoiding hundreds of millions of dollars in costs necessary to build additional cells at Layon
- The new WTE contract does not obligate the government to deliver a minimum guaranteed tonnage
- The new WTE contract does not contain a liquidated damages provision as was so problematic in the 1996 version.

Taitano stresses that the most important part of the new contract is that it is subject to the approval of the Guam Legislature as the island's policymaking body.

In previous interviews GRRP representative Dave Sablan told KUAM News that they wanted to propose buying the Layon Landfill in the new contract as the company intended to turn the waste into ash.  Taitano would not disclose details of the contract at this time because the matter is under litigation and Sablan could not be reached for comment as of news time. A copy of the new contract was not included in the transmission to the Legislature.

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