262 JOHAN POST AND ISA BAUD
contractor. In actual fact, profit margins can be both slightly higher or lower
depending on the balance between savings from small infractions on the one hand and
resulting penalties and bribes on the other. Although the contractors were all eager to
stay in business, they did object to the rigidity of the unit system. It assumes that the
areas served are more or less identical in terms of collection demands simply because
they are about equal in size. In actual fact there are differences in the volumes of waste
generated as well as in the accessibility and the quality of the roads. The workload
clearly differs per area leading to longer working hours for the labourers in ‘difficult’
areas.
Both the spontaneous privatisation of SWC in Nairobi and the planned privatisation
in Hyderabad have resulted in higher levels of employment within the sector, largely
by extension of services. So far, and obviously for different reasons, privatisation has
not been accompanied by retrenchment of public sector workers In the Hyderabad
case this implies that an important reason for local authorities to embark on the road
to privatisation, viz. reduction of public spending, does not apply. However, in relative
terms privatisation is accompanied by lower costs. This is largely due to the fact that
labour conditions in the private sector are worse than those in government service
(lower wages, higher job insecurity, fewer non-wage benefits and facilities). However,
in Nairobi the differences are far less pronounced than in Hyderabad because state
employment in Kenya is (no longer) an unquestioned privilege. Low wages are a
major reason for frequent absenteeism and low labour productivity of NCC workers
in comparison to private sector workers, who are under continuous pressure to
perform for fear of being fired. The differences in Hyderabad can also be looked at
from the perspective of the new workers in the private SWC companies themselves.
They do not compare themselves primarily with the MCH workers, but rather with
people from similar backgrounds that face even worse labour conditions.
In both cases there are strong indications of gains in productive efficiency (in terms of
costs per ton of collected and disposed waste or in terms of number of workers per ton)
when SWC is organised by the private sector. Furthermore, most of the time private
operators turn out to be effective service providers and consumers are satisfied with
their work. In these respects, therefore, the findings in the two cities corroborate a
further transfer of SWC to the private sector.
In terms of allocative efficiency (the degree to which charges cover costs) the situa-
tions in Nairobi and Hyderabad are not really comparable. In Nairobi people are
charged for waste collection through their water bills, but the majority does not receive
any NCC service. Those who have hired the services of private operators are therefore
facing a double burden. At the level of the individual private providers allocative effi-
ciency is good, as fees cover the direct expenses incurred. The problem in this city is
that the sizeable section of slums in the city is ignored by private companies, and as
far as the lower-income areas are concerned, only those situated in the vicinity of the