52 S. GALAB, S. SUDHAKAR REDDY AND JOHAN POST
can stay at home and make use of their leave days. Private sector workers cannot easily
report sick and almost half of them mentioned that they had worked when they were
ill for a period longer than 1 day. For the MCH labourers this figure was 4 percent.
Monitoring
Private sector participation is said to enable local authorities to introduce a more strin-
gent enforcement policy. In India it is probably true that the local government has a
better grip on private agents than on their own (highly organised and politically asser-
tive) labour force. Anyway, the private sector is put under strict surveillance, albeit
especially with respect to service performance and much less regarding the welfare of
its labourers The good quality of services provided by local contractors suggests that
monitoring is reasonably effective. Major players in performance monitoring are the
sanitary supervisors (52) and sanitary jawans (350). They check the contractors’ work
daily and register eventual shortages, each of which results in deductions from the
contractual amount. Nevertheless, stories of contractors ignoring contract stipulations,
corruptive practices, poor complaint handling and inferior labour conditions are very
common both in Hyderabad and in other Indian cities (cf. Ali et al., 1999).
A positive feature of the monitoring system is the involvement of the community. In
each unit a citizen committee had been formed consisting of 10-15 members Contrac-
tors require the signature of at least three members on their performance sheets indi-
cating appreciation of the work, before their bills can be passed for payment. It is not
known, however, if this innovation has really improved the quality of supervision, or
has developed into a mere formality or even a new avenue for manipulation.
Although it is difficult to calculate the additional costs incurred for contract manage-
ment and performance monitoring it is a fact that the number of staff positions within
the MCH has increased dramatically, whereas the number of labourers decreased. The
transaction costs of privatisation are certainly substantial.
System viability
Although exact data on the total cost for SWC within the MCH are missing it is likely
that these have increased substantially. Total expenditure on privatised SWC has
almost tripled since the latest reform in 1998, while overall costs for the remaining
MCH service and monitoring the entire sector have probably not gone down much, if
at all. Out of the total MCH budget of about Rs 300 crores in the year 2000-2001, no
less than 20 percent is allotted to SWM. According to responsible officials the MCH
is having adequate revenue to meet its total expenditures, including SWM. However,
the municipality does face difficulties in financing major investments. Under the
Mega City Scheme the MCH managed to avail a loan of Rs 28 crores from the Mega
City Fund for infrastructure development in the year 1999. Part of this money is
intended for the construction of transfer stations and replacement of SWC vehicles.
Out of the Rs 28 crores 25 percent comes from the Government of India revolving