Parties file suit over recycling contract in Indianapolis

RockTenn, GPC claim current contract violated bidding requirements.

September 16, 2014

RockTenn, a Norcross, Georgia-based papermaking and recycling company; Graphic Packaging Corp. (GPC), a Chicago-based papermaker; and Cathy Weinmann, a resident of Indianapolis, have filed a suit against the city of Indianapolis’ Public Works Department over its award of a large contract to the waste and recycling firm Covanta. The contract calls for Covanta, Morristown, New Jersey, to build and operate a large mixed waste processing facility in the city adjacent to Covanta’s existing waste-to-energy (WTE) plant.

According to the Indianapolis Business Journal, the plaintiffs have asked a judge in Marion County, Indiana, to halt the agreement between the city and Covanta. The three plaintiffs claim the $110 million contract, which includes the construction of a $45 mixed waste materials processing facility, did not go through the normal bidding process.

Other opponents of the contract say Covanta will focus its efforts on using the material collected from the city for its WTE facility, causing fewer recyclables to reach end markets.

Additionally, opponents say the collection and processing of recyclables mixed with waste will result in lower quality material, ultimately making potentially recyclable material only usable for the WTE plant.

In a statement released after the city voted to approve the Covanta deal, the Indiana Recycling Coalition (IRC) writes that it is “disappointed that the Indianapolis Board of Public Works has approved Covanta’s plan to mix recyclables with trash. As we have stated, this plan is a major step backwards for recycling in Indianapolis. Having in recent days received access to the agreement, we now know it is a bad deal for taxpayers as well.”

According to the IRC statement, the contract will result in the following outcomes:

  • The city will be financially penalized when the current subscription curbside recycling program collects 5 percent more recyclables per year than the year prior to the Covanta facility opening. Thus, clean residential recycling is disincentivized by the new contract.
  • The recycling goal for Covanta’s facility is 18 percent. This is a 23 percent decrease from the original 23.5 percent goal Covanta had been touting while marketing proposal in recent months. There does not appear to be a penalty for not achieving the “meager” 18 percent goal.
  • This contract precludes the private sector from working with the city to improve recycling programs for the next 14 years. If innovative techniques become available, the city will be unable to explore new possibilities and better approaches.

In a statement following the filing of the suit, the Indianapolis Department of Public Works, wrote, “We are perfectly within our legal right to amend our contract with Covanta. The new Advanced Recycling Center will be one of the most modern facilities in the world and is a common sense program to increase recycling in the city—at no cost to taxpayers or government.”