Public dominance needed for solid waste management in developing countries
Developing countries are working on designing and implementing municipal solid waste management systems. The urgency demands strong public institutions creating a solid “backbone” of public infrastructure and services, focusing on sustainable operations with regard to financials and organization.
Waste management can be characterised as a “reversed economy”. Transactions show materials and money flowing in the same direction. Clients want to be serviced by operators taking over their waste. Operators are paid upfront and are granted with control over the waste. If this control is not restricted by obligations and responsibilities it leaves the operator with perverse incentives to go cherrypicking (servicing rich clients or focusing on easy waste), to get rid of the waste in the cheapest possible ways and to develop obstructing monopolies.
Obligations and responsibilities must come from the government and other public authorities. They are written down in laws, regulations, guidelines and plans. But setting up a legal framework is not enough. SWM can be seen as a complex of infrastructure, services and cashflows. In order to be able to prevent monopolies and to reach sustainable operations servicing all inhabitants, public authorities need to develop their own knowledge and experience and need to position themselves as owner and manager of crucial parts of the SWM-infrastructure such as landfills and transfer stations.
There is a clear need for public dominance, especially in developing countries as these countries are often lacking a proper legal framework. A feeble framework in combination with weak public authorities is the recipe for trouble. A first step is (re)storing the authority of the government and municipalities in this field. And when, after years, the legal framework is strong enough, public authorities may consider to gradually withdraw from their positions and give room to private operators.
Recycling facilities and services are important but not crucial. They can be ruled by laws, permits and regulations while, at the same time, ownership and management may remain in the hands of private operators.
Waste collection is both important ànd crucial as lacking availability of collection services immediately effects households and a city’s public responsibility. Private operators can do the job but only within a framework ruled by stringent contracts with proper service level arrangements, and sourced out, monitored and managed by knowledgeable municipalities. Maintaining a captive municipal capacity of waste collection, servicing larger parts of the city, may be considered as it enhances knowledge and experience, benchmarks private operations and provides fallback positions.
Municipal services on SWM cost money. Investments and operational costs need to be covered by sufficient and secure cash-in’s in order to be able to safeguard sustainable operations and services. Developing cities working on their SWM systems mostly show a shift in their cash-in’s
from absent or low, towards substantial annual increases
from low cost-coverage towards near or full cost coverage
from general funding by municipal or national budgets towards dedicated and earmarked fee-incomes
from fee collection by private collectors towards collection by the municipalities
from in-cash, door to door fee collection towards combinations with other collection systems (real estate taxes, electricity billing) or collection through pay-by-phone systems.
from voluntary participation of households (serviced only when paid) towards obligatory participation (always serviced, compulsory payments)
from haphazard towards solid and transparent governance schemes
from haphazard towards elaborated differentiation schemes taking into account household income levels.
There is no doubt that municipalities need to be fully in charge of such a development in fee collection.
Public dominance is not bad news for private operators. It provides them with a transparant and reliable public authority, stimulates transactions and cashflows and provides a basis for investments and growth.