112 JAAP BROEKEMA
the ban on recruitment of additional personnel, and because of fierce opposition to any
restructuring of public sector labour conditions (such as the introduction of flexible
working patterns). After some experimentation the MCH committed itself to the unit
system of privatisation, which is characterised by rigid contract specifications and
minimal entrepreneurial freedom. The choice for this particular model was motivated
by the social concern to create new employment opportunities – the system is very
labour intense – and the desire to combat corruption. Furthermore, the system keeps
the MCH firmly in the driver’s seat, which is probably one of its hidden objectives.
Overseeing the socio-economic impacts of the privatisation of solid waste collection
in Hyderabad it can be qualified as a mixed blessing. Unmistakably, the quality of
solid waste collection at the city level has improved since the introduction of the unit
system, notably in terms of spatial coverage. Furthermore, more stringent methods of
supervision have been adopted, which have stimulated proper service performance.
However, the privatisation campaign alone cannot be credited for all of these improve-
ments, considering the fact that the MCH has also raised its total expenditure on solid
waste collection tremendously.
On the negative side the big gap that exists in terms of labour conditions between the
MCH labourers and those working for private contractors is certainly the most
outstanding flaw. The latter receive substantially lower wages, their work is pretty
insecure, and they have to do without numerous other facilities, including those they
can legally claim. Although the people concerned do not perceive their position nega-
tively, it is nevertheless distressing to note that the position of the contract labourers
in Hyderabad has even worsened as a result of the very laws and regulations that were
designed to protect them. The MCH fails to perform its role as a protector of labourers
(by not enforcing the labour provisions specified in solid waste collection contracts).
The unions, on their part, do not seem to bother much about the fate of unorganised
labour and continue to focus on the rights of the labour elite.
Service efficiency, usually one of the major driving forces behind privatisation poli-
cies, does not seem to have played a significant role in the Hyderabad case. On the
contrary, the MCH has been willing to compromise on the productive efficiency of
privatised solid waste collection in order to achieve its other goals. The unit system
does not provide contractors with sufficient incentive to work more efficiently. In
comparison with the MCH, for example, private contractors are using much older
equipment. Moreover, they are unwilling or unable to invest and innovate. Neverthe-
less, substantial gains in productive efficiency have been achieved due to privatisa-
tion. Similar to what can be observed elsewhere in India (cf. Ali et al., 1999) the costs
per tonne have gone down considerably. This can exclusively be attributed to the
lower labour costs within the private sector, which have been set by the MCH. There-
fore, the government has gained by trampling on the workers By doing so the state is
forsaking its traditional social obligations.