Privatization of Solid Waste Management

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Privatization of Solid Waste Management

Among the major environmental policies that have triggered hot debates among stakeholders and the public in general is that of privatizing solid waste management in various cities in the United States. Private companies have been operating the business of waste collection and management for many years not only in the U.S but also in the U.K and other countries. The debate has been whether by privatizing municipal solid waste (MSW) management, cost reduction and improved service quality can be achieved. Those who oppose the idea of privatizing MSW management have come up with all sorts of explanations to depict the idea as being counterproductive. However, most of these opposing arguments have overlooked the numerous benefits that would come with privatizing MSW management. The benefits not only come in terms of reduced costs and improved service quality but also in terms of creating a competitive market where contractors have to bid for opportunities to serve the community in the area of solid waste collection (Jacobsohn, 2001).

At a time when municipalities are struggling with major budget shortfalls and declining revenues, among the most viable services for privatization is that of solid waste collection, disposal, and recycling (Solid Waste Study Shows Privatization Lowers Costs, Increases Efficiencies and Boosts Safety, 2011). Privatization of solid waste management is appropriate on the basis of five main benefits. Firstly, due to the fact that private companies are able to spread investments, procurement and environmental protection costs across multiple facilities and contracts, they can attain cost savings. Their economies of scale enable them to achieve these cost savings besides ...

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...in light of the economies of scale. Therefore, the idea is to ensure that the quantity of MSW in all subregions is as close as possible (Lin & Kao, 2008).

In a scenario where two subregions have equal MSW quantity, contractors will consider the road length and go for the one whose road length is shorter. This creates another parameter called Route Density Index (RDI) which is obtained by the formula; RDI=W/L where L is the total road length and W is the quantity of MSW in a subregion. Therefore, a high RDI would imply a subregion with a short total road length and a large quantity of MSW. Consequently, its MSW collection would have a lesser cost than a subregion with a low RDI. Differences in RDI should be compensated by applying different price structures. Overall, districting MSW collection promotes competitive bidding market in communities (Lin & Kao, 2008).

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