Recycled Refuse International Ltd.

Business Proposal

&

Cash Flow Projections

For

Infrastructure Investment

In a

Composite Waste Management Solution for

Jersey, equivalent to

100,000 tonnes per annum

To submit proposals to address the burgeoning issues of alternatives to landfilling of Municipal Solid Waste through the use of proven technologies to

the

States of Jersey, the Channel Islands

The RCR Group Consortium Working

for a Greener and more Sustainable Environment

For Limited Distribution for Jersey, Channel Islands

This document contains information that is strictly commercial and confidential to ReCycled Refuse International Limited and its reproduction in whole or in part is expressly forbidden without the prior written consent of the Company.

Copyright 2008©

This document is based upon desktop analysis of legislation, policies and practices. Documentary and web findings have been tested. Written responses from the different jurisdictions have mostly been incorporated. The findings do not claim to be definitive or complete, but represent a snapshot' of waste management concerns, issues and actions as presented to Jersey . They are presented in good faith to facilitate better and more coordinated waste reduction practices.

Prepared by

Dr Anthony Haden- Taylor

ReCycled Refuse International AG

Poststrasse 6, CH6300 Zug Switzerland

Email: Chairman@rcrinternational.com  

web: www.rcrinternational.com

www.rcrusa.com

0. EXECUTIVESUMMARY 5
   1. INTRODUCTION  5
   2. BENEFITSTOJERSEY  10
   3. MUNICIPALRESPONSIBILITIES  13

1.5 TECHNOLOGY  15

1.7 PUBLIC POLICY WASTE COMPARISON  17

2.0 GENERAL RESPONDENT INFORMATION  21

1. NAMEANDCONTACTINFORMATION  21
2. BUSINESSANDOPERATIONS  21
3. PROJECTHISTORY  23
4. PERFORMANCEDESIGNEXPERIENCE  23
5. EXPERIENCEWITHRCRSTAGTECHNOLOGY  24
6. ANNUALREPORTSFORPREVIOUSYEARS  25

3.0 DESCRIPTION OF WTE TECHNOLOGY  26

1. GENERALDESCRIPTION  27
2. TYPESOFWASTEACCEPTABLETOPLANT  34
3. PROCESSFLOW & MAJORCOMPONENTSLIST  39
4. CHARACTERIZATIONANDQUANTITIESOFMARKETABLEPRODUCTS  41
5. CHARACTERIZATIONOFPROCESSRESIDUALS  43
6. MINIMUMANDMAXIMUMFACILITYANDUNITSIZE  43
7. MASSANDENERGYBALANCEINFORMATION  44
8. CONSUMPTIVEWATERNEEDS  44
9. ANNUALAVAILABILITYDATA  44
10. FACILITYANDSIZELAYOUT  45
11. SITESIZEREQUIREMENTS  48
12. SITING,CONSTRUCTIONAND/OROPERATIONSREQUIREMENTSANDRESTRICTIONS  49
13. EXPECTEDORPREFERREDLOCATIONS  49
14. STAFFINGCHARACTERISTICSPERPLANT  50
15. PHOTOGRAPHSOFEXISTINGFACILITIES  51

0. STAGEOFTECHNOLOGYDEVELOPMENT 57
   1. PILOTPLANTINSHEFFIELDENGLAND1996-2000  57
   2. FULLSIZECOMMERCIALOPERATIONS2000-2005  57
   3. TECHNICALRISK  57

0. ENVIRONMENTALPERFORMANCE 59
   1. AIRQUALITYCONCENTRATIONLIMITSINUSANDEU  59
   2. REQUIREDPERMITS  60
   3. PROCESSFLEXIBILITYANDADAPTIBILITY  61

0. PROJECTECONOMICS 67
   1. WASTEPROFILE  67
   2. CAPITAL & PROJECTCOSTS  68
   3. NETTREATMENTANDDISPOSALCOSTS PERTONNE--YEARS1-12  69
   4. CASHFLOWYEARONE  71
   5. CASH FLOWYEARS 1-12  72
   6. CONCLUSIONS  73

0. BUSINESSANDFINANCINGAPPROACHES 75
   1. DETAILS  75
   2. MANAGEMENT  80
   3. PROJECTFINANCEANDPERFORMANCEBOND  80
   4. LOCALECONOMICEMPOWERMENTCONSIDERATIONS  80

0. ADDITIONALCONSIDERATIONS 82
   1. ENVIRONMENTALRISKS  82
   2. EVALUATINGWTETECHNOLOGIES  83
   3. NIMBYISSUES  84
   4. SOCIAL CHARTER, CAREER ADVANCEMENT AND EDUCATION ON SITE AND OFF SITE 85

0. EXECUTIVE SUMMARY
   1. INTRODUCTION

Municipal  solid  waste  (MSW)  is  defined  by  the  OECD  as  waste  collected  by  municipalities  or  on  their  order.  It  includes  waste  originating  from  households,  commercial  activities,  office  buildings,  institutions  such  as  schools and government buildings,  and small businesses that dispose  of waste at the same facilities used  for  waste  collected  by  municipalities.  North  Americans  have one of the highest per capita  generation rates in the world.

The generation of MSW directly reflects upon the consumption patterns and wasted resources. MSW is collected from households and trucked to landfills, composters or incinerators. Although some of the landfills are managed to mitigate  impacts  on  the environment,  there  is  still  the potential  to  contaminate groundwater,  soil  and  air.  In addition, landfills use large tracts of  land,  which  in  densely populated  areas  are  becoming  a rare  commodity.  Incinerators, which require less land, inevitably cause  the  depreciation  of  the surrounding  land  value  due  to

lowered air quality.

WASTE GENERATION

In 2006 population of Jersey was 84,200 people and the MSW generated in 2006 was 87,500 tonnes of MSW is produced in Jersey annually. In addition, agriculture accounts for 13,000 tonnes, of which 1,000 tonnes are plastics and the balance green waste composted at La Collette, along with a further 12,000 tonnes of green waste made up of grass cuttings, hedge-trimmings and  the  like  generated  twice  yearly  under  the  Island's  compulsory branchage / hedge-trimming scheme which amounts to a further 25,000 tonnes.

The first three principal waste streams are:

1. Domesticwaste 33,000tonnes,
2. Commercialwaste  29,100tonnesand
3. Inertindustrialwaste 25,400tonnes.

The fourth and biggest waste stream arise from industrial, construction and demolition activities; and this amounts to 315,000 tonnes, aggregating to 427,500 tonnes per annum, to which should be added around 250 tonnes of  clinical waste and more than 2,000 tonnes of seaweed and beach and street sweepings which are dumped at La Crête Quarry, making a grand total of 429,750 tonnes per annum.

Residential and commercial wastes have been combined for the purpose of this business model. However, the other categories of waste are all to be treated  within  the  same  Recursive  Recycling  facility  and  will  be comprehensively  and  compliantly  treated  and  disposed  of  leading  to  a diversion from landfill of close to 95% of all wastes whilst achieving a 98% recycling rate.

WASTE COLLECTION

There are serious issues with the collecting, transporting and processing of

MSW because of the nasty odour associated with the waste which has both a high moisture content and also a high organic content.

We would propose siting a number of static compactor units around the island both in the residential and commercial areas where MSW could be

disposed of into an enclosed compactor unit  that  is  deodorized  and  can  hold more than 10 tonnes of MSW. It avoids the  collection  and  transportation  of rainwater, windblown litter is no longer a problem,  odour  is  reduced  if  not completely  eliminated  and  vermin  are unable to  feed  on  the  high  organic content.

Based on the total MSW generation rate of 87,500 tonnes in 2006 the cost

per tonne for collection would be £32.00 and disposal of MSW £38 within the island would be the equivalent to £70.00 per tonne. It is anticipated that branchage material and potatoes will be delivered to the process plant.

RCR would propose to provide a quantity of static compactor units. These eliminate litter, vermin, insects, odour and reduces vehicle movements. The compactor unit can be fitted with equipment that is capable of lifting and emptying small wheeled waste bins, if this is needed for certain locations in small markets.  

The  unit  can  be  located  to  provide  a  "through wall" chute loading direct from  a  supermarket  or  high  volume  waste  generator,  or  can  be  located  in  areas  with  narrow  streets  where  regular  compactor collection vehicles could not  easily enter or maneuver. Also in small  villages or areas where there are few  people  but  waste  has  to  be  centrally  located for collection and a clean and proper service has to be provided.

Each compactor unit is fitted with a wireless signaling device that  will  communicate  with  RCR's  central  management computer and the Fleet Manager's fax machine with a Pick Up Request. It is automatically sent when the unit is nearing capacity  and  at  the  same  time  generates  a  management

report. The signal reports on the units activity and advises on the level of capacity reached on a timed frequency basis. It is fitted with a remote diagnostic maintenance monitor for the hydraulic system, notifies need of service  along  with  oil  levels  and  oil  temperature  to  ensure  optimum, effective and safe operation of the remote compactor unit.

This remote device does not require any land telephone line and completely eliminates  pick  ups  of  partially  filled

compactor units; it eliminates employee

physical  checks  on  the  units;  it  also

eliminates  false  capacity  readings

normally  caused  by  temporary  jams  or

surges;  any  seasonal  changes  in  use,

capacity issues are eliminated as the unit

is  monitored  and  reports  independently

when it is nearing capacity; timely pick-up

and  replacement  with  an  empty  unit

avoids  build  up  of  waste,  or  litter  and

scavenging by informal waste pickers, animals or vermin.

COLLECTION CHARGES AND TIPPING FEE APPLIED WITHIN THIS PROPOSAL

It would be the intention of  Recycled Refuse International  (RCR)  to  provide  a  fleet  of  new  vehicles  to  create  an  island wide unified collection  service, rather than the four  separate systems operated by  various  of  the  parishes.  Twenty-two  (22)  new,  modern,  very  fuel  efficient  environmentally  compliant,  compactor  vehicles  that  would replace the aging fleet  of  vehicles  currently  being  used and would demonstrate  a  significant  saving  over  existing  collection  charges.  

And provide a seamless collection service throughout the island.

The Gate Fee (or Tipping Fee) for the RCR STAG proposal would be £32.00 per tonne and the proposed Collection Charge would be £38.00 per tonne.

OVERVIEW

The States of Jersey have determined to follow the lead of the Isle of Man and embark upon an unpopular route of purchasing an incinerator that will involve a budget expense of just over £80,000,000 (with inevitable cost over runs if history where to be repeated) taking into account the cost of dismantling  the  existing  incinerator.  The  proposed  location  is  to  be  La Collette near the waterfront development.

It is widely accepted by experts that incineration today  

is very clean and effective and with minimal emissions  to atmosphere given the expensive and efficient stack  cleaning  equipment.  It  is  also  recognized  that  incineration  is  only  a  75%  disposal  solution  with  around 3% representing highly toxic fly ash and 21%  to 22% bottom ash, which is removed from the grate  of the incinerator. According to the management of  the  incinerator  and  States  Officials  the  present  arrangements for disposing of fly ash is to specially  designed pits that are monitored and managed at La  Collette. The bottom ash is also deposited at La Collette and when asked recently, Pubic Services estimated that there would be around 5 or 6 years of ash disposal capacity at La Collette before that facility or disposal option had been exhausted.

The States of Jersey have not located an alternative disposal site for this ash. They have not held public consultation or instituted a search for a suitable disposal site for what will be around 25,000 tonnes of toxic ash

every  year.  An environmental  impact study  would  need  to  be carried out – a minimum of one year for winter and summer  precipitation rates, the determination of vulnerability  issues  to fauna  and  flora  and  of ground  or  surface  water proximity, air quality and finally  proximity  of  the disposal site to residential settlements.

If the public estimates given by Mr. John Richardson are correct, then it would appear that with a lead time of two years or so for the delivery of the incinerator there would be only a maximum of four years storage facilities available for ash. Nothing has been said to address the issue of disposal of ash beyond the date when La Collette is considered at capacity. Equally Mr. Richardson  has  remained  silent  on  the  state,  capacity,  condition  and operating cost of the special storage pits for the fly ash. The disposal of fly ash does represent a very significant issue since EU regulations do require a 5:1 mix of concrete or bitumen to the fly ash, which would place a huge burden on existing disposal arrangements.

Recent media comment reporting statements made by Jersey officials would indicate that the island would be delighted to strengthen its approach to the management of its MSW and as such would like to undertake a "Zero Waste Initiative" that will culminate in an integrated solid waste management plan for  Jersey.  As  a  consequence  Jersey  would  like  to  improve  its  MSWM (Municipal Solid Waste Management) services and provide better value for money for those services that it currently provides in serving the population and in that respect there is a need to review and refine a global waste management strategy has been developed.

The  RCR  STAG  Recursive  Recycling  is  a

technology-based  solution  that  is  capable  of

extracting as much as £50 per tonne for every

tonne of MSW, which is currently being buried. All

of the various components within the Recursive

Recycling suite of technologies are covered by

world patents, have hundreds of reference sites

around  the  world  in  varying  locations  and  are thoroughly tried, proven and tested. Typically an unsustainable practice is to recover plastic bottles, bale them and ship then to the UK for onward shipment to China for a fraction of its true value.

Also  as  part  of  that  Initiative,  Jersey

would  like  to  implement  its  strategy

through  contribution  of  private  capital,

given their reluctance to borrow additional

funds  and  with  the  transition  period

approaching  in  respect  of  the  overhaul

and radical changes in States tax revenue

collection  of  0:  20,  as  well  as  through

public private partnerships. Respectively,

Jersey has to consider the conditions, and

capacity of the Municipal Administration in

order to be in a position to manage the private involvement in an efficient and reliable way. This overview report provides the tools for the Municipal Administration to implement its MSWM strategy and to be active in its changing role.

Jersey is in need of an environmentally compliant and cost effective solid waste  management  system  to  ensure  better  human  health,  safety  and sustainability. The system needs to be safe for workers and safeguard public health.  In  addition  to  these  prerequisites,  an  effective  solid  waste management  must  be  environmentally  sustainable  and  economically feasible. It is quite difficult to minimize these two variables, environmental impacts and cost simultaneously.

The balance that needs to be struck is to reduce the overall environmental impacts of waste management as far as possible, within an acceptable level of  cost.  An  economically  and  environmentally  sustainable  solid  waste management system is effective if it follows an integrated approach i.e. it deals with all type wastes from generation and its disposal. The integrated approach must be based on a logical hierarchy of actions.

The steps, in order of priority, which must be taken by Jersey, are as follows:

• Minimize the production of waste or source reduction

• Maximize waste recycling and reuse

• Encourage waste processing

• Promote safe waste disposal

Modern accepted practice is to process MSW to recover, recycle and reuse as much as possible rather than maintain historic practices of landfilling. In this context Jersey is encouraging enterprises to set up processing plants.

Furthermore, Jersey is presented with the advantageous option of seamless  integration of additional, and currently separate, waste streams including Household  Hazardous  Waste  (HHW),  medical  waste,  liquid  toxic  waste, sewage screenings, end-of-life tires, agricultural waste and yard debris, end of life vehicles (ELV), used oil, and end of life electrical equipment (WEE) whereby all materials are processed and recycled into beneficial products and in full compliance with pertinent European and Jersey legislation.

This business proposal is based on

the  construction  of  one  (1)  RCR

STAG Recursive Recycling Municipal Solid  Waste  (MSW)  treatment

facilities, one (1) C&D and clean inert

materials (including glass) recycling

station;  one  (1)  end  of  use  tire

deconstruction plant; one (1) waste oil recovery and re-refining facility;

one  (1)  regulated  medical  waste

treatment facility and clinical waste disposal unit; one (1) inert industrial and hazardous waste disposal facility: fragmentizing and deconstruction of end of life electrical equipment and end of life vehicles to process all of the domestic, commercial and light industrial waste, all agricultural wastes, all branchage  material,  waste  or  unsuitable  potatoes  that  is  disposed  of annually within Jersey.

In this Business Case Model, the basic project concept and the economic feasibility of the project is examined. In addition a fleet of 22 new collection vehicles and remote static compactors and vehicles to uplift and move these mobile waste facilities around the island.

2. BENEFITSTOJERSEY

The immediate benefits to Jersey resulting from the implementation of the project described herein are:

• No outlay of public funds for implementation

• Jersey will attain highest true recycling rates for large municipalities in year one and throughout the term of the proposed MSW management Public Private Partnership

• Complete risk mitigation via AAA Performance Guarantee/bond (100%)

• Public-Private  Partnership  (PPP)  entitles  Jersey  to  permanent representation on the board of directors and unencumbered access to complete information on waste disposition and finances with an absolute guarantee of transparency, accountability and value for money

• Jersey need not implement additional and expensive separate curbside collection for recyclates. There is also no obligation on the waste generator (domestic, commercial or industrial) to source segregate their MSW as the entire MSW stream is accepted at the RCR STAG Recursive Recycling facility and once treated in the autoclave is sanitized as a matter of course and optimized for resale at the waste treatment plant. As RCR receives no monies from landfill, its only incentive is to realize profits from recycling

back into the market

• Arms-length  participation  eliminates  liability  and  risk  to  Jersey  –  a complete divestiture of risk through effective privatization of MSWM.

• The majority of the proposed Gate or Tipping Fee of £32 per tonne and £38 collection fee per tonne paid by Jersey will be returned to Jersey at the end of each audited accounting period through the Public Private Partnership mechanism of transparent and equal profit sharing from the operation of the RCR STAG plant (after deduction of 10% for the IRR on RCR's own risk equity) with an indicative net waste treatment and disposal costs for Jersey of a net £6.31 per tonne. This net cost of £6.31 in the first year is after paying the States of Jersey a profit share of £5,573,194 (assuming all off-take prices can be secured within the local market).

• Current costs on prevailing collection and disposal contract is £90.00 per tonne and are set to increase. This proposal will provide for a Gate Fee of £32 per tonne and a collection charge of £38 per tonne equivalent to a combined £70 per tonne and aggregating to £6,125,000 in the first year of operation and the payment of the profit share of £5,573,194 that would reduce the actual cost of collection and disposal of waste for Jersey to £551,806 for the first year of operation or just a combined collection and disposal cost of just £6.31 per tonne.

• With the current true cost of waste collection and disposal of £90 per tonne, that would have to increase significantly if a waste-to-energy plant were to be ordered and commissioned the estimates for its cost can be simply computed at 5% financing cost on £80,000,000 = £4,000,000; 5% capital amortisation on £80,000,000 = £4,000,000; Operating cost as put forward by Depute Guy de Haye is £38.00 (a highly improbable number given the issues of ash disposal, stack cleaning which in itself is estimated globally at around £40 per tonne for stack cleaning alone) which would be £3,325,000. The total would appear to be £11,325,000 and assuming 87,500 tonnes (on a like for like basis with this proposal) are of the order of  £129.44  per  tonne  and  this  figure  would  not  include  the  cost  of collection. Current costs borne by the island for disposal of branchage are estimated at an additional £1 million, which would add further to the proposal waste budget. Inevitably cost of living indexation to those costs would see this charge rising to in excess of £150 per tonne within five years.

• Over 12 years of operation with a current true cost for Jersey of £130 per tonne and the proposed combined collection and processing fee of £70 the estimated net savings for the States of Jersey would be £111,324,252. (please see Section 6.6)

• Jersey will be able to lead by example in meeting and exceeding goals for recycling requiring at least 50% of all MSW being diverted from landfill with more than 95% diversion being achievable in optimum conditions.

• The  Partnership  will  be  able  to  displace  more  than  83,125  tonnes  of carbon dioxide annually (worth £184,000) through the implementation of this project (carbon dioxide is a greenhouse gas that contributes to global warming). This figure relates to the amount of electricity generated within the RCR STAG plant to handle the net parasitic load for the plant and equipment operation and export to the national grid. Carbon allowance

"credits",  called  Certified  Emission  Reductions  (CERs)  or  Emission Reduction Units (ERUs) arising from the Clean Development Mechanism (CDM),  which  allows  countries  to  finance  emission  reduction  projects. Greenhouse Gas (GHG) mitigation is now an important factor involving the use of biomass to generate electricity, cogeneration, to replace fossil fuel for use in boilers or in the avoidance of dumping biomass in landfills. These credits can help project participants, in this instance the island, to meet their GHG reduction targets and represent a means of acquiring additional revenue and making a significant and visible contribution to Climate Change.

• As much as 150 jobs created in construction and implementation phase

• More than 54 permanent jobs created for the plant; with job sharing this figure could substantially increase. With a 24-hour working day work shift lengths could be split to shorter periods of say, 4 hours, with committed flex-time  employment  this  will  enable  single  parents  to  re-enter  the workplace. Assistance will be given to enable single parents of either gender to re-enter the workplace with the provision of an on site crèche facility (if appropriate).

• In addition it is proposed that RCR provide a fleet of new environmentally compliant  MSW  compactor  collection  vehicles.  With  a  daily  waste generation of 400 tonnes and a twice-weekly collection there will be a new fleet of 22 vehicles that will require a driver and crew of 3, thus generating 86 jobs for MSW collection.

• The Company's Social Charter as an equal opportunities employer will guarantee  career  advancement  and  academic  achievement  through selection on merit of candidates within the work force to attend university or advanced college courses that will lead to academic recognition and commensurate increased remuneration packages, promotion opportunities and  general  career  advancement.  The  Company  will  work  with  State Universities  to  fund  foundation  courses  in  environmental  science, awareness and sustainability (see section 8.4) as a diploma, bachelors or masters degree course. RCR will provide free education grants will be awarded on merit to meet all or a proportion of such education. More importantly gender specific employment deprivation will be eradicated with emphasis on encouraging young females and mothers to work and if necessary job-share to enable that employment to be viable and practical for the employee where children may be an obstructive factor. A crèche will be incorporated into each process plant.

• £66,395,000 inward investment over 12 months that includes one (1) RCR STAG Recursive Recycling MSW treatment plants; one (1) C&D recycling stations with integrated C&D derivative densified concrete production; one

(1) end of use tire deconstruction plant; one (1) waste oil recovery and re- refining facility; one (1) regulated medical waste treatment facility and clinical waste disposal unit; one (1) inert industrial and hazardous waste disposal facility and a fleet of 22 new vehicles and 4 static compactor units.

• States of Jersey enjoy GST and employment tax revenues from nearly £41,923,547 per year "Green" business sales turnover.

• The  island  enjoys  Best  Available  Technology  (BAT)  and  Best  Practical