48 S. GALAB, S. SUDHAKAR REDDY AND JOHAN POST
in operation – in order to save on fuel, and maintenance of trucks, and to reduce time
losses as a result of increasing traffic congestion. The entire system is very
labour-intensive and wages constitute the bulk of the solid waste management budget.
In 1995 the MCH embarked on the road to privatisation in SWC (for details see
chapter 5). The initiative to transfer this task to the private sector came across consid-
erable opposition both from the bureaucracy (fearing an erosion of government
power) and the labour unions (protecting the interests of the well-organised
MCH-workers). However, as municipalities are not allowed to recruit new labourers^10
while at the same time their service tasks grow together with their populations, they
are left with no other option than to go ahead with the programme of private sector
participation. Furthermore, promises were made that the existing staff would not be
retrenched from their jobs. At first only about 10 percent of the MCH area was brought
under privatisation (especially peripheral, newly developed colonies), but gradually
more areas were handed to the private sector and in 1998 almost 25 percent of the
MCH area was under privatised servicing. Initially contractors were operating under
two different systems. The lowest bid system called for tenders in which the private
contractors could quote the amount for sweeping and lifting the waste in an entire area
on a daily basis. The second system was that of payment on the basis of tonnage of
garbage lifted assuming that this would incite the contractor to lift more garbage.
Contractors could bid an amount per ton including costs of sweeping. Both systems
suffered from serious weaknesses, largely related to a lack of proper monitoring and
control by the MCH. In the first system contractors used to get their amounts even if
they were not performing well because fixed output norms were absent, and in the
second system contractors were resorting to lifting stones, construction debris etc. in
their vehicles to increase weight. Furthermore, the contractors were reported to form
syndicates, involving MCH-officials, to quote substantially higher prices over the
previous rates.
In an attempt to overcome these problems the MCH adopted a new organisational
framework and a more detailed monitoring system in 1998. The MCH-area was
divided into 266 units each having a total length to be swept of 7-8 km and an amount
of waste to be lifted of 7-8 tons per day. Every unit comprises one sweeping unit and
one lifting unit each with stipulated labour requirements and specified implements.
Payment of contactors under this so-called unit system is based on a uniform calcula-
tion including a specified profit margin of 10 percent (which was reduced to 8 percent
in 1999). From the 266 units 146 were privatised, while 120 remained under MCH
responsibility. Contractors were invited to participate, provided they satisfied certain
legal requirements and submitted a Rs 25,000 deposit (US$ 625). Each contractor was
- It is not entirely sure whether this ban on the recruitment of municipal workers dates as far back as the
1970s already or whether it was enforced in 1984.