Sorpa to Restructure Operations Following Damning Report Skip to content

Sorpa to Restructure Operations Following Damning Report

By Yelena

Sorpa - waste management

The waste management company responsible for Reykjavík capital area’s garbage is set to undergo comprehensive restructuring. Sorpa also intends to ask the six municipalities that jointly own the company to guarantee it an ISK 600 million ($4.7m/€4.3m) loan. An internal audit published in December indicates Sorpa is facing significant financial challenges.

The City of Reykjavík recently conducted an internal audit on Sorpa’s planned construction of a biogas plant, which was published last December. The audit found that Sorpa underestimated the cost of the project by ISK 1.4 billion ($10.9m/€10m). The company ’s Board of Directors dismissed Sorpa’s CEO Björn H. Halldórsson last month following another City of Reykjavík report that heavily criticised his work. Other financial issues within the company also came to light, suggesting a grim state of affairs. Mosfellsbær’s mayor stated just last week that “if nothing is done about [Sorpa’s situation], then the company is insolvent at the beginning of March.”

Sorpa’s board of directors met with elected representatives from all six municipalities yesterday to review the company’s difficult financial position and propose a plan of action. According to a press release published after the meeting, the company plans to complete a comprehensive review of its operations by June and undergo restructuring with the help of an ISK 600 million loan. A special task force will be appointed to carry out a detailed audit of the company’s finances, administration, and project management.

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