The city has begun negotiations to cancel a contract with the company that has failed to ship municipal trash to the mainland, leaving thousands of tons of garbage piling up at its facility in West Oahu.

Numerous delays have prevented Hawaiian Waste Systems from delivering on the contract.

Now the city is reviewing the agreement to determine any liability and resolve the matter as quickly as possible, Deputy Corporation Counsel Dana Viola told the City Council Public Infrastructure Committee yesterday.

"In light of circumstances and the likelihood that shipping is not going to happen in the short run … we are currently in negotiations to consider termination of the contract and try to resolve this contract in a manner that’s most advantageous to the city," Viola said.

Hawaiian Waste Systems President Michael Chutz said he could not comment on private discussions under way with the city.

Committee members discussed the trash shipping situation but took no action on any related legislation.

More than 20,000 tons of garbage—baled in plastic wrap and stored in containers on both the company lot and an adjacent property in Campbell Industrial Park—has piled up since the contract began in September.

Hawaiian Waste Systems was hired to ship up to 100,000 tons a year, at a cost to the city of $99 per ton, to a site in Washington state.

But the city has not been obliged to pay the company because shipping has never taken place due to delays with permitting at the mainland site, compliance issues with the U.S. Department of Agriculture and now a lawsuit filed in Washington state.

The Yakama Nation, an American Indian tribe, contends activity at the landfill is located on lands where it has rights to fishing, hunting, gathering and other customary practices.

A federal judge granted a temporary restraining order last week in the suit brought by the Yakama Nation, environmental groups and residents, arguing that an environmental impact statement should be prepared for the project.

When asked whether there was any breach of contract by the company, Viola said only that the issue was being evaluated.

If the contract is canceled, the city would have to determine whether the garbage should go to the Waimanalo Gulch landfill or to the HPOWER waste-to-energy plant, said Tim Steinberger, city director of environmental services.

The intent of the shipping contract was to ease the burden on the landfill until a third boiler is up and running at the HPOWER plant by late 2011.

Hawaiian Waste Systems has already been fined by the state Health Department for improper storage of the garbage and faces a lawsuit from a company seeking to have its storage containers returned.