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

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3. Successful collusion in the tendering process requires the ability to detect and
punish deviations from the cartel agreement. Therefore, the OECD argues that,
from the competition perspective, it is preferable to use sealed bid auctions,
without disclosing the results. 89 According to the OECD, concerns about
political favouritism could be met by the establishment of an independent
agency with responsibility for overseeing all public tenders and with access to
all of the bids.
4. If competition in disposal facilities is limited or non-existent, firms which do not
own disposal facilities will be at a competitive disadvantage in the tendering
process for waste collection. In these cases, the OECD argues that potential
collection firms should be guaranteed access to disposal facilities on nondiscriminatory
grounds. An alternative and, according to the OECD, preferable
solution is to separate ownership of disposal and collection facilities and/or to
prevent owners of disposal facilities from participating in tenders for
collection; 90
5. In many cases, a division or subsidiary of the local government itself is in a
position to provide the services, which are being purchased by tender.
Competitive neutrality is ensured when public and private sector suppliers face
identical regulatory, legal, financial and administrative arrangements. 91
An interesting point is that much of the discussion in the literature relates largely to
household waste collections. Yet the same is almost certainly true for waste collection
from commercial premises. The question, therefore, is why this same logic should not
be extended to commercial waste collections? We are not aware of the same level of
interest in this area since much interest in the contracting out of waste collection
services relates to an interest in privatisation of public services. To the extent that
collection of commercial waste is not a public service as such, the same interest does
not appear to be present among researchers. Even so, the logic for similar, albeit
appropriately adapted, approaches seems to be compelling.
89 Evidently, this is a strange recommendation as ultimately, the result is easily knowable.
90 The alternative – clearly favoured increasingly in the context of English procurements for municipal
waste – is to ‘unbundle’ services and procure different service elements through discrete tendering
processes (most notably, separating collection from contracts for residual waste treatment / disposal).
This reflects a concern to enhance competition in the market, recognising that integrated contracts
tend to favour larger players in the marketplace, with the specialised services which smaller
companies might be able to offer in collection being potentially overlooked. In short, the approach is
more likely to deliver better value for money (see, for example, OGC (2006) Improving Competition and
Capacity Planning in the Municipal Waste Market, OGC Kelly Report to the Financial Secretary to the
Treasury, May 2006
http://www.ogc.gov.uk/documents/OGC_Kelly_Report_to_the_Financial_Secretary_to_the_Treasury_-
_May_2006(1).pdf )
91 This point – the desirability of enabling public and private sector companies to compete in the
market - is a theme of the work of Dijkgraaf and Gradus (see, for example, E. Dijkgraaf and R. H. J. M.
Gradus (2005) Collusion in the Dutch Waste Collection Market, 31 January 2005).
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