ZUSOK's business defect
By Aleksander Nowacki
When U.K.-based glass giant Pilkington set up a joint venture with the government to operate a glass mill in the historic town of Sandomierz in 1993, its engineering department surely did not realize the trouble it was in for.
Ever since the mill's opening in 1962, its emissions have been destroying the stonework of some of the country's oldest and most attractive monuments and affecting the health of the local inhabitants. So when, after two years of operation, Pilkington Sandoglass started the first float glass plant in the country - a new technology that produces high quality glass for cars - the authorities imposed stringent environmental protection requirements.
Pilkington's engineering department in the U.K. developed a new fuel-efficient solution on account of the difficulty in meeting the local authorities' stringent environmental requirements. The so-called float furnace uses natural gas and produces lower nitrogen oxide emissions and ground-level pollution as well as less noise. The new technology is now being introduced in other Pilkington plants across Europe.
But while most manufacturers generally use cost-saving alternative methods to contain environmentally unsafe byproducts from factory production, municipal authorities often shun such solutions, businesspeople and environmental professionals say.
Municipalities frequently incur unnecessary heavy investment in such projects, as they tend to "think big" when it comes to the environment, they said. This trend is due partly to a failure to appreciate the business side of things and partly to a keen business sense, albeit specifically understood: the bigger the contract, the higher the bribe - that is the simplest way to explain many municipal investments related to the environment, according to Adam de Sola Pool, chief investment officer at venture capital fund Environmental Investment Partners (EIP).
The Municipal Solid Waste Treatment Plant (ZUSOK) in Warsaw is another case in point. The first waste incineration plant in the country, ZUSOK was set up by the municipal government to eliminate some 650,000 tons of trash produced by the city each year. Despite the continuous protests of the local populace, who objected to the plant's location in the center of the city, the E46.2-million (zł. 200-million) plant was a flagship project of several administrations for 10 years until it finally opened in 2001. But authorities closed the plant after only one month due to technical difficulties.
Jacek Kaznowski, president of ZUSOK, insists that there was nothing unusual about this.
"Any major industrial plant needs time to improve its installations and solve minor technical problems as they emerge," he said.
But environmental industry professionals are unconvinced, and the once trumpeted project is today the butt of numerous jokes. Even the municipal authorities no longer seem willing to defend the project, leaving Kaznowski to fight a lonely battle.
"The plant is formally in operation, but you could not say that it is on an industrial scale," said Wojciech Zalewski of Warsaw's Environmental Protection Office. When asked to elaborate, he suggested that the plant's management should provide all the details.
"The plant is conducting normal operations on an industrial scale with 100,000 tons of waste processed each year," Kaznowski said, adding that municipal authorities may be misinformed as a result of their failure to appreciate the technical difficulties inherent in the process of reaching full capacity.
Kaznowski also said that the plant faces serious barriers to growth, though he claimed they were due to major legal loopholes.
While the thermal treatment of a ton of waste costs zł. 200, the market price is around zł. 90 or less, depending on the circumstances. Some dumps take in a ton of waste for as little as zł. 30, said Jerzy Ziaja, president of the Polish Commercial Chamber of Recycling. Neither ZUSOK nor recycling companies can compete with these dumping prices. But recycling businesses have in their favor the guidelines of both the European Union and domestic law, which single out recycling as the preferred way of dealing with the garbage issue.
"One person's waste is another's raw material," de Sola Pool said.
ZUSOK lacks such arguments because although thermal garbage treatment produces energy, it is hardly the best way of dealing with communal waste, which tends to have too little energy value, rendering the plant highly inefficient. While independent observers see the plant's inefficiency as evidence of the municipal authorities' lack of any business sense in setting up the plant, Kaznowski insists that an imperfect legal solution to the issue of waste ownership is to blame.
"Poland is the only country I know of where waste is owned by transport companies," he said. "They are able to dictate prices."
Kaznowski went on to say that, under current regulations, a potential investor is guaranteed neither a steady supply of waste nor stable prices.
"The question has got to be asked whether under the present legal system there is any space for the waste processing industry," Kaznowski said. He also defended his company despite the fact that alternative methods of waste management are much cheaper, making waste sorting facilities profitable to run at current prices.
It is impossible to solve the problem of waste management in the city through one method only, Kaznowski said. What is necessary is a whole series of measures, beginning with selective collection, sorting, recycling, processing and, as a last resort, storage. There is a place for thermal processing in this cycle, he added.
Critics say that the resounding failure which the Warsaw incineration plant has proven to be is a prime warning for municipalities not to undertake costly, overambitious projects.
But such a change in the attitude of authorities appears to be uncertain, as there are now new voices saying that plasma treatment of garbage - a new technology that uses plasma to produce energy from incinerated garbage - can be an alternative to burning trash.
Kaznowski, however, warns against such ideas, pointing out that attempts to introduce the technology in developed countries have so far proved to be expensive and ineffective. That seems about the only thing that he and his critics agree on.
