City administration mum on altered deal before council approval
Canadian Protein Innovation (CPI) Ltd. has developed a new agreement with the city of Moose Jaw for its $100-million plant.
“I don’t have authority to accept changes compared to what we showed council. This has to go back to council sometime next week,” said Matt Noble, city manager.
A pea-processing plant was set to begin construction this year in two phases. The first phase will cost approximately $60 million and employ 60 people. The second phase will cost approximately $40 million and employ another 40 people.
According to Noble, the new 50-page document outlines 18 clauses, one of which is set to affect scheduling. Noble said he cannot comment on the specific changes CPI has requested before council approves them.
“I can tell you that payments are affecting schedules and penalties. That’s all. We’re way further ahead than we were last week,” he said. “It’s a complex agreement that we have because we’re providing services and we’re establishing milestones for them to achieve over the course of their project.”
The city will issue a building permit and expects a certain percentage of work to be done before an expected completion date. The new provisions came amidst a Nov.-30 deadline for CPI to purchase the land in the new industrial area, covering 100 acres.
Despite numerous extensions and delays sending money, the German company is still interested in building the plant and has begun to transfer the money.
“We are aware and we have evidence that they initiated the wire transfer for some of the purchase of the property,” said Noble.
He said it is an intricate project that requires equipment from other places in the world, which has caused the hold up.
“There’s potential for some delays and they want to be sure of certain things before they commit,” he said.
Dealing with a foreign German company has also been an issue for the city.
“I’m afraid distance, communication issues and business cultural differences have resulted in these types of delays. It is a fairly complex agreement,” Noble said.
CPI plans to process yellow peas into starch, protein and fibre. It will be used for products like noodles, candy, pasta, animal protein replacements and industrial uses. The company was granted a third extension to close the deal Nov. 30 after representatives visited city hall on Sept. 28 and said financial constraints would hold them back from signing off yet again.
The representatives also disclosed a request to not comply with the city’s sewer and utility bylaw No. 5152 until July 31, 2022.
The bylaw provides a guideline for the supply, collection, treatment, storage and distribution of water and for the collection, transmission, treatment and disposal of sewage and storm drainage. Council granted the authority to operate outside the bylaw for two years following production as city lagoons have the capacity to store CPI’s wastewater.
CPI will pre-treat their wastewater after two years to ensure it could safely be discharged in the city’s wastewater treatment system.
The company previously said it would not be in operation until Dec. 31, 2020, after a further review of their business plan. It needs to be up and running at 100 per cent to determine if evaporators are needed to eliminate odour issues caused by production. It will take 18 months to order, manufacture and install the evaporators. That is why CPI does not want to adhere to the city’s utility by law.
CPI was previously granted a second extension to close the deal on Oct. 3, but a confidential issue held the company back. The first closing date was meant to be June 30, but CPI did not have financing in place, and requested an extension to Aug. 31. Construction was to begin in summer 2017.
Not much is know about the company, other than it does not have website and it was the provincial government that lured the German corporation to Moose Jaw, according to media reports.
The Times-Herald reached out to CPI but they did not respond by press time.