International Review of Waste Management Policy - Department of ...

64.0 Costs of Household Waste Collection
64.1 Background – The Waste Collection Market Operating in
Ireland
The chargeable waste collection services operated in Ireland are practically unique.
The collection market is effectively an open one in which private companies and local
authorities alike are competing against one another. The Waste Management Act
(1996) stipulates that all local authorities in Ireland are obliged to collect or arrange
for the collection of domestic waste in their area. However, as discussed in the policy
review annex, though this means that local authorities are responsible for
administering the permits to collect waste, there is no control on individual
households as to how they choose to avail themselves (or not) of the services offered,
and only limited control (though the collection permits) on how the waste is
subsequently managed. 1276
A consequence of the free market for waste collection is that collection routing
(referred to as round design) probably suffers inefficiencies due to low customer
densities. In addition, spatial logistics may be less than optimal with regard to cost in
that average distances (and hence, other things being equal, journey times) from
depots to rounds might be expected to be longer where different collection operators
are operating in overlapping territories.
Organised competition for providing collection services is certainly to be encouraged
as it forces contractors to optimise for cost efficient services. In the majority of
instances around Europe (and worldwide), however, the competition is conducted
through a tendering process to win a contract for comprehensive collection from all
households. In some cases, local authorities themselves provide the service.
However, the situation where the competition remains open on a day by day basis
leads to multiple companies being operational in an area, even though they may only
have a small number of customers in any one street. Collection costs per household
naturally suffer due to the impact that this has on the efficiency of utilisation of staff
and vehicles.
Using an analogy to the electricity supply market, rather than customers all using the
one set of power lines, it is much like a number of different companies all providing
their own power lines in every street, with households selecting their cable of choice.
The total costs of providing the service are greatly increased, and the efficiency in the
way in which the service is provided is reduced. In situations where such services are
provided in a genuinely competitive market, ironically, the costs may rise to users
even as the margins to operators decline. In short, nobody wins.
1276 The collection permit system does appear to be being deployed with increased vigour by the
relevant authorities so that this level of control may be increasing.
1033
International Review of Waste Policy: Annexes