by Cat Holloway /
Shoalhaven Council is $1 million down, but not out.
Dealing with ongoing fallout from the collapse of cutting-edge waste recycling company, Bioelektra Australia, Shoalhaven City Council CEO, Robyn Stevens, has publicly released 22 documents detailing Council’s involvement with the liquidated firm, the ensuing internal investigation and the Office of Local Government’s (OLG) exploration into the project.
In 2018, Council awarded Bioelektra Australia the tender to build a revolutionary waste recycling plant at West Nowra using Polish mechanical heat treatment technology that can separate and sort plastic, glass, metals and organics before converting the material into construction aggregate, bricks and glass wool.
The plan promised a 90% reduction in landfill, more than 200 construction and 30 operational jobs and the admiration of councils around the state.
But Bioelektra Australia declared insolvency in May 2023 after failing to pay an unspecified amount of debt to insurance law firm, Gilchrist Connell. A few weeks later the ambitious startup was placed into liquidation and Shoalhaven Council’s grand vision was dumped.
The revelatory documents are on Council’s website here. But it’s not easy reading, so here are the key points:
- Among the flaws in Bioelektra's operations was their failure to pay a $2 million bank guarantee required in the contract with Shoalhaven City Council.
- Council did not appoint a compliant independent certifier to monitor Bioelektra’s contractual obligations and Council payments to the company.
- Despite that Bioelektra did not meet the bank guarantee conditions, Shoalhaven Council paid Bioelektra $1 million in October 2022 for site works.
- Council previously paid $1 million for the design documentation and development consent ("Milestone 1") but this payment was not controversial because Bioelektra did meet those obligations.
- Investment will not return to Council as part of Bioelektra’s liquidation as it is considered sunk costs for site clearing and ancillary work whose value remains with Council.
- However, an independent valuation of the site estimated the value of the project works thus far at between $2.2 million and $2.8 million.
- Amid public outcry over transparency and mismanagement, Council’s CEO published extensive communication between Council and OLG over Bioelektra’s tender and Council’s due diligence process and project administration.
- After terminating the contract with Bioelektra in August 2023, Council reassigned staff responsibilities and created a specialised unit to oversee project management.
- OLG were satisfied in January 2024 that no further investigation was required, but Council must report to OLG on this matter and future project management methods.
- Shoalhaven's long-term waste management strategy remains unclear but Council maintains that current waste collection and landfill services are unaffected.
Meanwhile, the political vitriol flows like fermented compost with Shoalhaven Councillors Paul Ell and Serena Copley demanding Mayor Amanda Findley apologise for leading the community astray and ‘gambling with ratepayer money’.
In a joint press release, Clr Ell said he couldn’t understand why the Mayor and council ever thought “such a risky undertaking” was a good idea. While Clr Copley claimed alternatives were not considered because Bioelektra was the Mayor’s ‘pet project’.
But Mayor Amanda Findley said the Bioelektra decision was supported unanimously, including by councillors who share Ell and Copley's ‘political party and ideals’.
Indeed, staunchly right Councillor John Wells was unashamedly enthusiastic about the project after travelling to Poland to learn about the system that had already won several national innovation and sustainability awards.
“I’m so proud of Council that they have had the guts to go out on a limb and put their faith in new technology to solve a worldwide problem,” Wells said at the 2022 launch of Nowra’s Bioelektra site works.
Findley said Ell and Copley were not on Council until 2021 and were ill-informed about a long-held commitment by all Councillors to divert as much waste as possible from landfills.
“Councillor Ell continues to drive his personal, negative narrative that the project was doomed to fail from the outset, Mayor Findley said.
“But what we see today is the Office of Local Government supporting the work of Shoalhaven City Council in investigating the operational process - a process which Councillors and the Mayor have no direct engagement in, nor should they.”
Findley said it was ‘ludicrous’ to blame her for Bioelektra’s liquidation.
“When Bioelektra went belly up, over 2000 Australian companies went bust in the same year.”
“Clr Copley doesn’t want to admit that Shoalhaven City Council’s waste services division are national award winners and considered highly innovative in the industry - she would rather peddle doom.”
Australia’s landfill space is expected to reach capacity by 2025, with roughly 67 million tonnes of waste generated every year, and 30% of that waste going to landfill. Though Poland’s Bioelektra SA company quickly distanced itself from Bioelektra Australia, there remains hope that this recycling technology will succeed in Australia as it has already across Europe.
