Dive Brief:

• According to the terms of a pending contract between Covanta and the city of Indianapolis, IN, the city will face substantial penalties if it hires out another company for these services.
• The Indianapolis Board of Public Works is voting on a collection agreement worth approximately $112 million in revenue for Covanta. The contract would be in effect for 14 years.
• Companies that utilize recycled materials are against the Covanta deal, as they remain concerned that the incinerator operator will produce inferior goods for use in their respective industries.

Dive Insight:

Some on the city council are encouraging Indianapolis to explore other contracts, a move that would be made impossible if the agreement is signed. The pending contract restricts the city from launching new recycling programs.

If the city did decide to make a move and implement an alternative program, Indianapolis would dish out $333.3K per month in liquidated damages to Covanta. This could prevent future administrations from scoring a better deal at some point down the road. This is an aspect of the contract that current members of the city council are questioning.