Dundee’s fire-damaged incinerator will be repaired and returned to use thanks to a likely seven-figure insurance payout.
Dundee Energy Recycling Ltd says its brokers have confirmed the insurance claim has been successful after the inferno in the Baldovie plant’s fuel store.
The full detail of the settlement has yet to be examined but it is understood both plant reconstruction costs and business interruption costs will be covered.
No figure was given for the extent of the insurance award but it is likely to run to millions of pounds.
DERL managing director Alan Jones said: ”This is an important step towards restoring the plant to full operation and we will obviously be giving instructions for reinstatement work to begin as soon as possible.”
However, until directors can study the detail of the settlement and discuss the situation with shareholders it is unclear if the insurance payment will save jobs at the plant in the shorter term.
The firm began a 30-day redundancy consultation on August 30. It said about half the existing 40 jobs would be unsustainable while the plant remained non-operational, probably until late next year.
The successful claim is also a major help towards DERL’s proposed upgrade plan, which would cost up to £30 million, aimed at extending the plant’s life beyond 2030.
Scenarios in an extensive engineering study conducted for DERL in 2011 include improving the boilers and adding a materials recycling facility.
The company also announced last month that, to support the upgrade, it was seeking fresh finance this autumn from investors outside the existing shareholder base, and this process is continuing.
Dundee City Council leader Ken Guild said: ”From the outset we have been fully behind DERL’s efforts to successfully conclude their insurance claim and also their desire to redevelop the plant and return staffing to pre-fire levels.
”As a shareholder this is a plan the city council supports. Dundee City Council has always been a long-term backer of alternatives to landfill and the waste-to-energy plant has given us a route to disposing of the city’s waste in a more environmentally friendly way.
”In the meantime DERL will continue to dispose of Dundee’s waste to landfill on behalf of Dundee City Council.”
The Baldovie plant was shut down on May 16 after the blaze severely damaged a fuel store, conveyor and several other parts of the building.