THE SECRET deal between Dublin City Council and Greyhound Recycling and Recovery, under which 140,000 households were signed over to the company, offers a preview of the future of waste management in Ireland envisaged by Minister for the Environment Phil Hogan and his officials.
Despite strenuous opposition from the Irish Waste Management Association and several of its member companies, the Minister intends to proceed with plans to eliminate “side-by-side competition” in the waste market and replace it with a system of franchise bidding for area-wide contracts.
This would operate in the same way as the deal done by Dublin City Council with Greyhound – except that households or business premises would no longer be able to make their own arrangements to have waste and recyclables collected by rivals, as these companies would all lose their permits.
“It’s nuts, just nuts,” said John Dunne, of the association. “None of it makes sense because the Department hasn’t produced any evidence to show that side-by-side competition isn’t working, and delivering real benefits for consumers. And, as they say, ‘If it ain’t broke, why fix it’?”
The new regime would give local authorities control of the municipal waste stream, even though most of them have handed over waste collection to private companies. Laois County County was the first to leave the market as long ago as 1985, while Kerry County Council recently sold out for about €500,000. With only two local authorities – Galway City Council and Waterford County Council – still collecting household waste, 98 per cent of the business is now in the hands of private companies such as Greyhound, Greenstar, Oxigen and Panda. And they all expect to make plenty of money from what were previously loss-making operations.
Dublin City Council was losing €12 million a year, mainly because its service was priced too low to recover inflated costs – notably, employing bin men who were paid for a full day’s work, even though it dropped to just 2½ hours after the introduction of compactor waste trucks many years ago.
Unlike most European countries, “we have moved from public provision to openly competitive private provision – of all aspects of waste management, not just collection – over the last two decades; therefore, a different market dynamic has developed here”, according to a report for the Waste Management Association by DKM Consultants. Overall, association chairman Jim Kells says, the waste business is now worth €1 billion a year “or even more”. And the companies involved in it have all made “significant investments in infrastructure”, notably waste treatment facilities.
These range from recycling plants to Indaver Ireland’s new incinerator at Carranstown, Co Meath.
But the Minister’s move to impose “competition for the market”, in place of the current free-for-all, has put a brake on further investment in the industry, at least in the short-term, Mr Kells says. “Many of our lads are so scared they won’t even buy wheelie bins, because they fear they’ll be out of business in a few months’ time.” Under a similar “winner takes all” regime in Britain, 45 per cent of all municipal waste is now collected by just two companies – Veolia and Biffa – both of which have their own treatment facilities. “We’re talking about the Tesco-isation of the waste industry, with big players coming in here and wiping our noses in it,” Mr Kells says.
The DKM report refers to “the prospect that the system may become dominated by a small number of large firms, to the detriment of smaller operators, and with the possibility of evolving over time into a de facto nationwide monopoly with very high barriers to market entry. This can be seen as a particular risk in a small country.”
The proposed imposition of “competition for the market” is widely seen in the waste sector as an attempt to overcome a High Court decision in December 2009 quashing an attempt by the Dublin local authorities, via a “variation” in the regional waste management plan, to re-establish control over the municipal waste stream.
Giving judgment in favour of Panda, Mr Justice Liam McKechnie found that this would “substantially influence the structure of the market to the detriment of competition”. In effect, he upheld “competition in the market”, saying that if one dominant player charged too much for its services, “it will undoubtedly be undercut by a competitor”.
Since then, Dublin City Council has followed the example of Dún Laoghaire-Rathdown, Fingal, South Dublin County Council and most other local authorities by doing its controversial deal with Greyhound to take over household waste collection in the city under confidential terms.
After a shambolic handover, Greyhound has announced that its “per lift” bin charges will rise by more than 16 per cent on June 1st and the waiver scheme that exempted some 33,000 low-income householders from paying the annual “standing charge” of €100 for the service will be discontinued at the end of this year.
Greyhound wants the Department of Social Protection to fund the waivers, just as it pays CIÉ for free transport passes. “I’m running a business and I can’t afford to provide free bins,” chief executive Michael Buckley says. “When you go into Tesco is there a waiver aisle? When you go into the petrol station is there a waiver pump?” This hard-nosed approach is tempered by the fact that there is still “competition in the market”, and people are free to turn to other service providers. But for how long?
“It is decision time,” Mr Hogan told a waste summit last November. Pledging an end to uncertainty, he said: “My new waste policy will set a clear path for the future.”
As for the real agenda behind the radical change now being proposed in waste management, few are in any doubt that it can be summed up in one word: Poolbeg. The drive is on to make the long-delayed incinerator planned for Ringsend economically viable by taking control of the market to direct waste into its furnaces.
