BMC gets a stinker over Gorai dump

Pre-empting the generation of carbon credits from the Gorai dumping ground even before the scientific closure project had been completed seems to caused major embarrassment to the municipal body on an international level.

Reason: The dump could only 14,477 certified emission reductions (CERs) as against 2,74,500 CERs expected to be generated till December 2011. The Brihanmumbai Municipal Corporation (BMC) will now have to pay back the amount it had taken as advance from the Asian Development Bank (ADB).

“The estimates drawn by the consultants were way too loud than the ground realities. They did not consider that the garbage in Mumbai has silt, debris, dry garbage and plastic — all of which do not generate methane gas like in western and European countries,” said Mohan Adtani, additional municipal commissioner.

“We have sent a notice to IL&FS demanding the consulting fees back. We have also asked them to help us  buy carbon credits from the international market, which we have to pay the ADB, at no charge,” he added.

This entire goof-up will cost the BMC an estimated Rs15.47 crore.

Consultants for the project, IL&FS, had estimated an optimistic figure in 2008, even before the project had taken off without verifying the nature of garbage and production of methane gas. The scientific closure activity of the site was started in 2007, and completed by 2009 after a seven-month delay.

The Rs50-crore project was carried out by United Phosphorus Ltd and IL&FS, wherein the dump was converted into a scientific landfill site with a green cover. It was decided that 5% of the revenue generated from the sale of the total CERs would be given to the consultants as fees.

According to the estimates given by the IL&FS, the project would have generated 12,29,514 CERs of which 3,00,235 were to be generated between July 2009 and December 2012.

The BMC subsequently purchased gas analysers to measure the amount of gas emitted from the garbage. And, the project design report, prepared by IL&FS, was submitted to the United Nations Framework Convention for Climate Change for approval of the CERs. The municipal body was expecting to earn revenue in dollars from the international market through this project.

By then ADB evinced interest to buy carbon credits from the dump from the BMC. The bank even paid the first instalment of Rs24,51,39, 865 in October 2009. Interestingly, the consultants received their full fees within four days.

BMC was supposed to sell 2,74, 500 CERs on June 1, 2012 in the international market. But, the civic administration was shocked to learn that the project could only generate 14,477 CERs. As the number of CERs were not as per the estimates, the third-party auditor - a clean development mechanism cell of the UNFCCC — could not validate them.

The bank sent a notice to the BMC demanding that it return the money given as advance or purchase green carbon credits from the open market and give them to them. The BMC, which had received an international award for being the first municipal corporation to have such a prestigious project, then slapped a notice to the consultant to repay the bank.