The Rotorua District Council is looking to cash in on its ground-breaking 'Waste 2 Gold' technology.
The unique technology, developed by Scion in partnership with the council, converts sewage into valuable byproducts, such as chemicals, fertiliser and energy. A recent pilot plant project has shown it will save the council about $700,000 a year, according to chief executive Peter Guerin.
Seeing commercial possibilities in the technology - now renamed Terax - Mr Guerin wants to establish a separate entity to hold the intellectual property and license it to other councils. He also wants that entity to "explore partnering with third parties ... on the development of Terax plants for other local authorities".
Mr Guerin this month requested a statement of proposal be prepared regarding the creation of a new council controlled organisation to commercialise Terax.
All going to schedule, that proposal will be presented to the council's Corporate and Customer Services Committee on September 6, with a consultative process to begin soon after. Mr Guerin said that process was "quite likely" to include public submissions, although that had to be confirmed.
Rotorua Chamber of Commerce chief executive Roger Gordon said he had some reservations about how far the council should take the commercialisation.
Mr Gordon said he had congratulated the council on the project, as Terax would result in long-term savings which would help reduce the burden on Rotorua ratepayers. But he believes the council should follow the example of Scion, which has signalled its commercial involvement will be limited to licensing the technology.
"This is a low-risk option and reflects adherence to their [Scion's] core purpose," he said.
"The council should follow this example."
He said partnering with a third party for the construction of Terax plants outside the Rotorua district would be outside the core business of council.
"This is an example of council stepping into the private arena and exposing the local authority to a level of commercial risk in an environment over which it has little control."
Mr Guerin said the council always took a risk averse approach to commercial opportunities and would think carefully before proceeding with any Terax development for others.
"It is likely that we would be a minority partner and that the majority of the risk would be taken by the other third party partner," he said.
Mr Guerin said it was not unusual for local government organisations to become involved in commercial ventures.
"The council has, of recent years, had a view that if through its investment in infrastructure there are opportunities to commercialise that expenditure, then they are active reviewed."
He said the council had invested $2,654,837 in the Terax technology to date, which included $300,000 of waste minimisation funds provided by the Ministry for the Environment. The ministry has provided a further $1 million and Scion also contributed substantial funding.
Mr Guerin said at this stage no funding had been spent on commercialisation plans.