THE falling euro rate could add millions to the cost of the Island’s new incinerator because the contract rate has not been fixed.

The original £104 million deal for the new incinerator at La Collette included 75 million euros for European contractors. But the declining sterling/euro rate means that the cost could rise by millions – and the head of the States’ spending watchdog has estimated the damage at around £10 million.

It does not necessarily mean that the final bill to the taxpayer will increase, because the payments are staggered over three years, and what matters is the rate at the time when the payments are made. States Treasurer Ian Black said that the expert advice obtained by his department was to wait for the rate to improve, rather than fixing it when the contracts were signed in mid-November.

However, Public Accounts Committee chairman Ben Shenton – an investment manager – said that Islanders were probably looking at an additional £10 million bill based on the drop in the sterling/euro rate since the contracts were signed.