The collapse of a company that was expected to revolutionise recycling on the New South Wales South Coast has prompted calls for the operation and its contract with a council to be scrutinised.
Bioelektra Australia notified Shoalhaven Council this week that it had entered voluntary administration after it had been selected by the organisation in 2018 to operate Australia's first "advanced waste treatment plant" at the West Nowra tip.
The company had promised to divert 90 per cent of the region's red-bin waste from landfill using multi-million-dollar technology only available from Poland after the council predicted its landfill facility would reach capacity within the decade.
On Thursday, Kiama MP Gareth Ward used a question on notice in state parliament to ask whether Local Government Minister Ron Hoenig would order an investigation into the council's engagement of the company.
"I strongly believe that the Minister for Local Government must appoint an independent third party to properly undertake a full and comprehensive investigation," Mr Ward said.
"A waste management contract is the largest contract a council will ever enter … the news that Bioelektra is entering voluntary administration could have serious consequences.
"I have never understood why council pursued technology and systems that weren't supported by the independent Environmental Protection Agency."
The Minister is due to lodge his response to Mr Ward's questions on June 15.
'A revolution'
In a statement, Shoalhaven Council said it had spent $2 million clearing land at the facility to make way for the technology, which was claimed to be able to separate and sort plastic, glass, metals and organics before diverting the material into construction aggregate, bricks and glass wool.
"It's going to be a revolution in the Shoalhaven economy by creating resources out of the red bin," the head of Bioelektra Australia Freddie Itaoui said when the project was announced in January 2019.
The first sod was turned at the site in March last year after it received development consent from the NSW Department of Planning.
The project was expected to employ 200 people during construction and 30 ongoing staff when it was to become operational this year.
Shoalhaven Mayor Amanda Findley initially strongly supported the project after travelling to Poland to inspect the process at one of the Bioelektra Group's European facilities.
At the time Cr Findley said the system was "far superior" to any other recycling process being used in Australia.
She declined to comment on the company's collapse this week.
'A lot of questions'
Deputy Mayor Paul Ell said he did not support calls for a review, but he held concerns about the company's contract with the council since he was elected in 2021.
"I've asked a lot of questions around the business model, I've asked for details around what agreements, if any, were in place with [surrounding councils], who apparently had to provide volume for this facility to make it commercially viable," he said.
"I've been asking questions from day one about this.
"I think transparency is important and the community has every right to know more about this project."
Labor councillor and South Coast MP Liza Butler said she had raised the issue with Mr Hoenig.
"I have briefed the Minister for Local Government on the matter and he's fully aware of it," she said.
"It doesn't [put] council in any financial danger — I want to make that very clear."
Federal Court action
Insurance law firm Gilchrist Connell is also seeking to have Bioelektra Australia wound up in the Federal Court, with a hearing due to be held in Sydney on May 26.
In a statement Bioloektra said the project had stalled, with its head contractor in Australia going into administration at the completion of the earthworks stage.
"This is a very disappointing development for both council and Bioelektra, as the other phases of the project, in particular the manufacture of the autoclaves in Poland, have as we understand been progressing as planned," a spokesperson said.
"The dispute that Bioelektra is having with its Australian contractor is in relation to progress payments and subcontractor payments for the earthworks.
"This matter is before the courts, and we are advised that Bioelektra is considering its options in relation to its position and keeping the project alive."
