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					Executive Summary
A long history exists between local governments and private firms handling solid waste. For decades, local governments have successfully pursued public private partnership (PPP) service provision options for various solid-waste services, including recycling, waste collection, landfill management, waste-to-energy facilities, and hazardous-waste disposal. However, many municipalities have long considered landfills to be a basic function of government. Though some have contracted with private firms for landfill management, many municipalities still maintain ownership of these facilities. The many reasons for looking at public private partnership options in waste service provision include managing liabilities, improving efficiency, cutting costs or debt, improving access to capital, and improving accountability. Each reason, or combination of reasons, lends itself to a different option for managing landfills or waste collection services. Public private partnership options range from cooperative agreements with private firms for support services to management contracts, asset sales, and even complete reliance on the private waste market for services. One of the key challenges in the newly demarcated municipalities of Xhariep is the need to find the most effective and efficient way of delivering services to communities, particularly those communities who have historically been denied access to basic services. They also need to be able to set tariffs correctly to reflect the proper cost of services and to be able to collect those tariffs to fund the ongoing cost of services. Practical observation and interviews with the various members of staff from the Xhariep District Municipality and the three local municipalities within the Xhariep District has revealed that a dire situation exists with regards to waste management practices. This situation exists largely as a result of a fragmented approach to service delivery by municipalities and also the absence of an integrated waste management strategy for the district. The situation is manifested by poor waste disposal practices and inefficient use of resources with regard to waste collection methods. Before future service provision models can be assessed or implemented a waste strategy needs to be in place. Developing a waste strategy was not part of the Terms of Reference for this assignment as its importance to looking at alternative service provision models for solid waste was not originally realised. However to look at service provision models using solid waste management as trial requires a strategy to first be in place. Waste collection and waste disposal methods are strongly interlinked. Without a strategy defining at least one of the services ie collection or disposal it is impossible to know how the other service should be provided In determining what strategy is likely to be required it has been necessary to look at the context within which Xhariep is operating, Nationally, Provincially and Locally. National Legislation and Policy developed over the last few years is now filtering down to Local Government in terms of compliance requirements. Government Policy and Regulations will force Xhariep to rationalise the number of landfill sites in its district and upgrade the remaining sites.
Australia South Africa Local Governance Partnership Activity 7.1.3 May 2003 5

The public private structure can shift some or most operational, environmental, and capital risks to the private firm. But private sector participation on its own is no solution to problems in service delivery. It requires a partnership between government and the private sector, and the nature of this partnership—and the rights, responsibilities, and risks it entails for each partner must be carefully mapped out. A number of options exist for waste management, each with its own strengths and weaknesses. These include: (1) government ownership and operation of facilities; (2) cooperative agreements between public and private entities – Service Contracts; (3) government ownership and private operation of facilities – Management Contracts; (4) complete asset divestiture to the private sector; and (5) avoiding government landfill ownership and operational contracts by relying on commercial facilities. Solid-waste disposal involves unique legal, regulatory, and technical challenges. It is not as simple to privatise as solid-waste collection. Special problems also exist in trying to attract private sector participation in smaller and isolated municipalities like Xhariep. This report recommends rationalising the number of landfills and modernising collection methods it also suggests lower end forms of public private partnerships as a starting point. Once a waste management strategy is in place, key positions filled and a waste committee formed the benefits of public private partnership should be able to be explored and realised in the area of waste management across the district of Xhariep. The modernising of collection methods and upgrading of key landfill sites shouldn’t simply be viewed as additional expenses to be borne by municipalities but as an opportunity to look at doing things more efficiently and freeing up resources to be able to tackle other areas of service in need. This will also included the opportunity to establish new Small and Medium Enterprises (SMME) which will create new employment opportunities in the area of recycling and resource recovery.

Australia South Africa Local Governance Partnership Activity 7.1.3 May 2003

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Description: Executive Summary