Cleveland Incinerator

What happened to Peter Tien’s requirement to hire Clevelanders with his $1.5 million contract?

CLEVELAND — Cleveland Public Power signed a no-bid $1.5 million contract with Princeton Environmental Group, headed by Peter Tien, to develop the proposed incineration facility on Ridge Road.  The proposal was based on the Kinsei-Sangyo gasification technology, for which Tien is the U.S. representative.  Kinsei-Sangyo’s patent applications define its technology as: “Method of incinerating waste material by way of dry distillation and gasification” or “waste incineration disposal method.”

A key requirement of the contract, dated March 30, 2010 was that Tien would “establish an office in Cleveland, OH and staff it with Cleveland residents on or before March 30, 2010.”  As has been well-documented by Cleveland Scene, Tien is maintaining an empty office space within the offices of the Ralph Tyler Companies at 1120 Chester, with a New Jersey phone number.  Tien apparently occasionally visits the office from his home in New Jersey.

So if Tien did not hire any Clevelanders in an actual office, how much of the $1.5 million went to Cleveland area engineers or other subcontractors?  According to a statement Tien sent to Cleveland Public Power in April 2011, which Ohio Citizen Action obtained  in a public records request, Tien hired six subcontractors to work on the plans for this facility.

This document describes the subcontractors:

Labor Cost Statement
Project: Municipal Solid Waste to Energy Process/Systems Design
Customer: City of Cleveland
Ordinance Number: 480-09
Invoice Number: PEG-1002
Invoice Date: April 8th, 2011
Sub-Contractor Name Functions Labor Cost Incurred Labor Cost Paid
GT Environmental Air permit application $105,995.02 $94,260.19
Ralph Tyler & Company Civil Engineering $23,468.98 $17,000.00
PFK & Associates Electrical Engineering $18,489.08 $5,000.00
Kinsei Sangyo & Co Gasification System Design $300,000.00 $50,000.00
Bio Energy & Co. Front end System Design $200,000.00 None
Shanghai Electric Institute Power Island Design $100,000.00 None
Total labor Cost Incurred & Paid: $747,953.08 $166,260.19

Of the total cost of $747,953 that Tien says he will owe to subcontractors, only $23,468  appears to be for a company located in Cleveland:  Ralph Tyler & Company, where Tien maintains his empty office. This amount is equal to 1.5% of Tien’s total contract.

GT Environmental, which developed the air permit, is located in Westerville, Ohio.  PFK & Associates is listed as having an office in Akron, as well as other states.  Kinsei-Sangyo is in Takasaki, Japan and Shanghai Electric Institute is in Shanghai, China.   Bio Energy & Co does not appear to be listed by that name anywhere, so the name may be incorrect.

Emails between Tien and Cleveland Public Power Commissioner Ivan Henderson indicate that Tien did not have the funds to advance money to his subcontractors.  Tien’s contract with the City says that he will not be paid until the Ohio EPA air pollution permit for the facility is issued.  Tien sent several requests to the City asking them to advance him the money, but this has not occurred.

Tien missed the deadlines for his deliverables in his original contract, and CPP has extended them several times.  At a public hearing on January 19, Henderson said that Tien’s deadline for the cost estimates has been extended again, to sometime in February.

— Sandy Buchanan, Executive Director, Ohio Citizen Action

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