This article originally appeared in the Beacon’s print edition on April 11.
After the Pockwood Pond incinerator was badly damaged in a fire last November, government officials said repairs would require a new control panel from Consutech Systems LLC, a Virginia-based company that manufactured the incinerator roughly a decade ago.
Nearly five months later, government has not paid the roughly $140,000 needed to purchase the piece of equipment, and trash is still being landfilled on the hillside above the nonfunctional incinerator. Leaders haven’t explained the delay in payment or disclosed a date when they expect the facility to be up and running.
Consutech, however, has long owed the Virgin Islands another critical part for the incinerator.
For at least four years, the territory has been waiting for the United States firm to supply an air-pollution-control scrubber that would remove particulates and gaseous pollutants from the incinerator’s emissions. Although government signed a $1 million contract with Consutech in 2015 to create the device and has already paid the company a $500,000 deposit, the scrubber has never been delivered.
And according to legal documents and news articles reviewed by the Beacon, Consutech has a tumultuous corporate history in the US stemming back to the 1990s, when its predecessor company, Consumat Systems Inc., declared bankruptcy following lawsuits alleging that at least one of its incinerators had serious design flaws and violated emissions standards.
After grappling with financial issues in the US, Consumat began targeting international markets for its future projects, business entity documents have stated.
Now, a recent report from the Recovery and Development Agency suggests that installing a scrubber and designing a new incinerator are on the RDA’s agenda. And Consutech — whose president did not grant an interview despite multiple requests from the Beacon — could be in the running for at least a portion of the projects.
Lawsuits, bankruptcy
In the late 1980s, hospitals in Maryland had a problem: They needed to get rid of infectious medical waste from their facilities without paying exorbitant rates to do so, according to media reports at the time.
To help remedy that dilemma, a company named Consumat Systems Inc. was contracted to build a medical waste incinerator in the neighbourhood of Hawkins Point, Baltimore in 1990.
But according to articles from the Baltimore Sun, Consumat had never built a system like the one planned, and in October 1991 the company announced that it was bowing out of the project.
“Consumat, after months of struggling to make the plant’s high-tech conveyor system work, ran out of money and pulled out. It left with about $4 million in unpaid contractors’ bills,” one article from the Sun reported.
Though the company had reportedly constructed more than 2,000 other incinerators, the Baltimore incinerator wasn’t its only troubled project, according to the Sun.
A Consumat-built incinerator in Auburn, Maine was found to have critical design flaws and to have violated state and federal emissions standards, the Sun reported.
The company eventually paid about $300,000 to the city as part of an out-of-court settlement in 1990.
“The open and shut of it is they failed to demonstrate compliance with emissions standards rather consistently,” Kevin Macdonald, who oversaw the air-quality bureau at the Maine Department of Environmental Protection, told the Sun about the case in Auburn. “It’s doubtful they were ever in compliance. Hell, probably not once for five or six years.”
In October 1995, Consumat filed for bankruptcy.
“The filing was precipitated by several pieces of protracted litigation and difficulty in raising capital due to the litigation,” Consumat admitted in a press release the following year.
During that time, the company began targeting international markets after its financial troubles stateside.
“The company believes that a significant portion of its future revenues will come from international markets,” states a Securities and Exchange Commission document from 1997. “Since the company’s emergence from bankruptcy, a major portion of its renewed marketing effort has been directed to these markets.”
On May 21, 1999, Consumat’s SEC registration was terminated.
Exactly one month later, Consutech Systems LLC was registered at Consumat’s former address near Richmond, Virginia, according to online business entity records.
A former president and CEO of Consumat Systems, John Joyner, confirmed to the Beacon that the two companies are connected.
“Consumat became Consutech following a period of insolvency caused by a changing municipal market and a failed medical waste disposal facility where a medical waste mechanical cart system did not work as designed,” he wrote in an email, apparently referencing the Hawkins Point incinerator.
Delays in the territory
Leaders in the VI have appeared undeterred by Consumat’s troubles in the US.
In 2004, government signed a $4.5 million contract for a new incinerator, and said the facility would likely be up and running within 15 months. About five years later, the incinerator was installed, but it didn’t come online until 2011.
The new system did not, however, have a pollution-control scrubber, a device designed to clean emissions of chemicals including dioxins, a type of highly toxic pollutant that can cause reproductive and developmental problems.
Eight years later, the scrubber still has not come, though government officials have given a wide range of reasons for the delay.
In 2011, for instance, they cited “ongoing land negotiations,” and in 2016 they said government had been busy implementing the new National Health Insurance programme.
In 2015, government officials said, they signed a roughly $1 million contract with Consutech to manufacture the scrubber.
Four years later — though officials said government has already sent some $500,000 to Consutech in the form of a deposit and other payments — the device has not arrived, and no one has provided a timeline for when it will be installed.
Petrona Davies, the permanent secretary in the Ministry of Health and Social Development, explained last June that the delay was not on government’s end, but that Consutech had encountered obstacles in the manufacturing process. Some of the vendors the firm typically worked with had gone out of business, and the company had to find new ones, she said.
“So it has created some challenges,” she explained. “But they claim to have overcome those challenges.”
A few months after that comment, Ms. Davies publicly addressed the lack of a scrubber during a September community meeting in West End, after frustrated residents expressed concerns about emissions from the incinerator.
“It’s taken a lot longer than any of us expected,” Ms. Davies admitted, citing the manufacturing issues from Consutech. “It’s frustrating and it’s embarrassing.”
RDA plans
Last month, Ms. Davies confirmed that the scrubber still had not arrived in the territory, but she did not provide further details.
Health and Social Development Minister Carvin Malone said he couldn’t yet speak comprehensively about the issue and advised this reporter to contact Ms. Davies.
Meanwhile, a February report from the RDA suggests that the agency is now handling three projects relating to the incinerator, including installing the long-awaited scrubber.
Designs for the device are being commissioned and procured by the HSD Ministry, the RDA report stated, though it did not name Consutech. Another update from the agency reported that installation of the scrubber and preparations for a new incinerator will require “specialist international suppliers.”
Though Ms. Davies would not confirm whether or not Consutech will still be contracted to design the scrubber or a new incinerator, she said government is “carefully considering options” based on technical advice.
“We are therefore not in a position to respond to your questions conclusively at this point,” she said. “Generally speaking, however, any engineering works required for existing Consutech equipment would need to be sourced through the equipment manufacturer.”
The RDA’s new head of communications, Colene Penn, deferred questions about the projects to the HSD Ministry.
Consutech today
The extent of Consutech’s connection to Consumat’s past legal and financial woes remains uncertain.
Consutech’s current president, Robert Lee, has long-standing ties to the former firm. He served as Consumat’s vice president in 1996 after working at the company for a decade, according to SEC filings.
Consutech also still manufactures Consumat-model incinerators — including the one in Pockwood Pond.
“[Consutech is] continuing the 35-year tradition of designing and manufacturing the proven Consumat technology for waste combustion and air quality control equipment,” the company’s website states. “Thousands of Consumat waste disposal systems have been installed throughout the world since 1965.”
Mr. Joyner, the former Consumat president, said Consutech combustion technology “remains viable” today, but he added that he doesn’t have any involvement in the newer company.
“[They] are still manufacturing and providing parts as far as I know,” he wrote in an email.
Consutech’s website doesn’t help shed much more light on its current work, or how its machinery is being manufactured.
The site lists “projects in progress” in general locations including the US, Iraq, Egypt, the VI and “Soviet.” The company’s “about” page describes products being “manufactured at our own facility by experienced, skilled craftsmen.”
The offices
On a Tuesday afternoon last month, the Consutech office located in an industrial park about ten miles outside of Richmond, Virginia, was dark and quiet, save for a few stray cats that ambled outside.
An employee with a different business that shares space in the facility — a cable splicing company — said he doesn’t typically see anyone come in or out of the adjoining Consutech office.
“I’ve wondered that, you know: What exactly do they do? That’s as busy as they get right there — those cats,” the employee said, gesturing to the strays.
Mr. Lee wrote in a brief email that the company’s office is open Monday through Thursday, and that he would speak to this reporter over the phone in early March.
After his initial email, however, Mr. Lee has not responded to subsequent messages.