TRIAL AND ERROR IN PRIVATISATION IN HYDERABAD 109
Opinion about contract conditions
Almost a third of the contractors stated not to have problems with the contract condi-
tions. The most troublesome condition is the fixed amount of waste that has to be
collected and disposed of each day. Many contractors mention that in some periods
(especially summer) they are unable to collect the stipulated volume, and, conse-
quently, that they get deductions on their contract amount. Some contractors would
like to have the amount of waste to be fixed on a monthly rather than a daily basis.
Another unfavourable requirement according the contractors is the fixed number of
trips per day, and the fact that the MCH is not paying them for any additional trip.
Finally, about half of the contractors objected to the system of deductions itself, which
they think is unjust. They may say, for example, "if we collect more than the fixed
amount we don’t get paid extra, but if we collect less we are charged with deductions”.
The MCH is accused of not taking into account the conditions under which the
contractors have to work (“they just deduct blindly”). Also many contractors find it
unreasonable to deduct two times the salary if a labourer is absent due to sickness.
Nevertheless, half of the respondents feel the MCH is usually lenient.
The unit system adopted in Hyderabad is based on the assumption that the units are
more or less homogeneous. Most contractors are satisfied with the size and demarca-
tion of their area. Only 10 percent of the contractors thought that their area was larger
than the specified standard. The contractors were also asked what they thought about
the number of calculated labourers Again 90 percent of them was satisfied.
Contract period
In general private entrepreneurs prefer to have long lasting contracts, which assure
them a proper return on investment. Needless to say that the likelihood of private
sector investment all depends on the terms of reference under which it has to operate.
At first sight the situation in Hyderabad does not seem to be very favourable. The
system is strongly regulated with a low degree of entrepreneurial freedom. Contract
periods are extremely short (currently two successive periods of six months each).
Most contractors have a strong preference for contract periods longer than 1 year, and
the average preferred contract period is 3 years and 3 months. The arguments to
support this choice are that it offers more security (work for a longer time) and will
enable them to operate more efficiently. With regard to the latter they say that they
have to get used to the area. At the start of the contract period they are still unfamiliar
with the unit and suffer from higher deductions due to malpractice. In the course of
time they can improve upon themselves. None of the contractors came forward with
the investment-argument. Most of the contractors are rather reticent when they are
asked about investment opportunities under the current system. Those who showed a
willingness to invest, however, demanded an upward adjustment of the contract
amount. Apparently the current profit does not allow for investments.