Japanese company Ebara Corporation - hired in February to design and build the controversial mega-incinerator project in Broga, Selangor - has denied news reports that it is in dire financial trouble.

A senior official with the company's international business division, Kawata Maruyama dismissed reports that Ebara recently retrenched 400 employees as "not true".

In a written reply last week to questions from malaysiakini, he said the company had "de-mobilised" 300 contract staff since their contracts ended in March.

Kawata said some of the remaining 100 staff were moved to the overseas engineering project division following the "considerable shrinkage in the Japanese waste management market".

The rest were re-positioned in the operation and maintenance division.

As one Japan's engineering giants, Ebara Corporation is widely-known for designing and operating hundreds of incinerators in that country.

Strong protests

The multi-billion ringgit project in Broga, near Semenyih, has drawn the ire of local residents and opposition parties, who have stood firmly against it on the grounds that it is not economically feasible, and that it is a potential health and environmental hazard.

DAP has demanded that the government scrap the deal based on, among others, news reports in Japan that Ebara is in financial trouble. The company's track record is also reportedly questionable.

Malaysia's proposal is for a 1,500-tonne thermal treatment plant to dispose a daily average of 5,000 tonnes of municipal solid waste generated in Kuala Lumpur and Selangor.

Similar projects have been proposed for the northern and southern regions of the peninsula.

Despite countless attempts to uncover the details, the deal remains shrouded in secrecy. Top officials in both governments have refused to comment on it..

Unforseen factors

Meanwhile, Kawata also denied claims that Ebara had lost billions of yen due to the failure of gasification-type incinerators.

"... the loss cannot be linked directly or solely to gasification-type plants. We had almost 2.8 billion yen in cost increase (in 2002) due to several unexpected reasons," he said.

He said the company had incurred additional costs during the construction of nine waste treatment plant projects awarded before Japan changed its laws on environmental quality.

He added that the large number of provincial government projects awarded to Ebara that year had resulted in an adverse impact such as manpower shortage and an unexpected increase in construction volume towards the end of the construction activities.

According to Kawata, other unexpected reasons include a value depreciation in the stock exchange as well as the cost incurred in optimising overseas affiliates and subsidiaries.

"Although Ebara Corp has experienced hardship (in recent times), the company has achieved eight successful completion of gasification and ash-melting plants."

The proposed incinerator in Broga is designed for the fluidised-bed gasification and ash-melting technology, which Ebara claims is its latest zero emission invention.

Kawata said the company had also established advanced waste treatment technology feasible for any distinctive waste treatment requirements, free from hazardous environmental impact.

"All of these completed plants have been commissioned, taken over by the local governments, and are put into stable commercial operation," he said.

On reports that Ebara had spent 6.8 billion yen more than the original cost projection to fix plants built in 2002, he said the amount was "part of the cost" incurred due to unforseen factors.