A row is brewing between Dublin City Council and private sector waste management firms over control of household rubbish, writes Barry O'Halloran

The fight for Dublin's €150 million a year household rubbish collection business is about to get dirty.

Three private sector waste management companies, Greenstar, Panda and CityBin, have lined up against Dublin City Council, accusing it of trying to force them out of the capital.

The council is the statutory waste management authority for its own region, as well those of South Dublin, Dún Laoghaire-Rathdown and Fingal county councils.

The spark that ignited the row was a notice issued by the council last week. This stated that it was considering either taking total control of domestic waste collection itself, or tendering for a private sector partner to do it. The notice sought submissions from interested parties.

The three companies, which compete with the councils in the domestic rubbish collection market in various parts of the city, are more likely to be making legal submissions on the issue.

Panda and Greenstar say they have consulted their lawyers and are prepared to fight the council through the Irish and European courts. "We will go all the way if we have to," Greenstar's chief executive Steve Cowman says.

"There are competition, constitutional and European issues at stake here. This is a test case; if Dublin City Council succeeds in doing this, all the other local authorities will try the same thing."

David McCabe, general manager of Panda echoes the point. "If the need arises we will fight this in every court, Europe if need be," he warns.

The pair, and CityBin's Gene Browne, all separately argue that the council is abusing its position as the industry's competitor and regulator, and that it is seeking to take control of something that it does not own - the city's waste.

The subtext to this, they say, is that the latest moves are designed to underpin the contract the council recently signed with with Dublin Waste to Energy Ltd, the multi-national-owned operator of the proposed Poolbeg incinerator. This obliges the local authority to guarrantee the supply of 320,000 tonnes of waste per year for 25 years to the plant, or pay an annual loss of profit penalty.

It also provides for bonus payments to the local authority if the incinerator's surpluses are above a certain level.

Assistant Dublin city manager Matt Twomey dismisses the incinerator argument as a "red herring". He points out that the project is before An Bord Pleanála, and is at least four or five years away, assuming that it gets through planning.

Twomey says that reports and recommendations made by Forfás, the Competition Authority and economist Dr Francis O'Toole all support putting the service out to tender.

He also argues that there is already a precedent for this in the household market. A joint venture between two firms, Oxegen and Bailey Waste Paper, is responsible for collecting the recyclable waste from domestic "green bins" in the four local authority regions.

That deal is in place since 2001 and is worth between €12 million and €14 million per year. However, even that venture is losing out where other operators have cut in to its business, as the council pays the joint venture by the amount it collects. As the council also had to license the other players, it was aware of the possibility that this could happen.

This is a lot more than a street fight over who collects the bins. According to CityBin's Gene Browne, the private operators began to move in to the market as domestic waste collection charges increased, making it more viable for them to compete. Basing his estimate on an Ernst & Young report, he says Dublin's household business is worth €150 million per year.

That figure relates to collection, basic recycling and composting. Recent developments mean that waste is fast becoming a potentially valuable commodity.

A key influence is the price of oil, which forms the basis of most plastics used in the packaging that you throw away. The higher the grade of plastic, and the more recoverable it is, the more people will pay for it.

Greenstar's Cowman points out that the prices for this material range from some €40 a tonne up to €450 a tonne. Two or three years ago, domestic waste became a viable source for this as a result of the industry fine-tuning its separation and grading technology.

Dublin's 400,000 or so households produce almost 800,000 tonnes of waste per year, much of it made up of these materials.

Greenstar has spent €275 million on its Irish recovery facilities, and equipped them with the technology they require to convert rubbish into a commodity that can be sold on world markets.

Demand in these markets is such that aluminium, the main component in drink cans, can command up to €850 a tonne, and paper is worth up to €90 a tonne.

Moreover, they can be transported cheaply. Cowman points out that the Republic has a trade deficit with far eastern countries, where there is a big demand for materials like plastic. This means that there are empty container craft leaving our ports for these destinations.

"You can literally put a load of plastic on a slow boat to China; it's cheaper to ship it from Dublin to China than it is to ship it from Dublin to Cork," he says.

None of this changes the fact that Dublin City Council appears set on a particular course.

Twomey explains that part of the reason for its approach is the fact that both national and European law oblige it to implement a waste management plan.

This calls for 59 per cent of all waste, domestic and commercial, to be recycled. A maximum of 16 per cent is allowed to go landfill, and the remaining 25 per cent will go to Poolbeg.

Currently, 30 per cent of all waste is recycled, most of the rest goes to landfill, with Arthurstown taking the bulk of it. Some 600,000 tonnes of the Dublin area's domestic rubbish ends up there.

The council is in the final stages of contracting for commercial operators to run two composting centres, at Ballyogan on the southside and Killshane Cross on the northside.

These will deal with biological waste from "brown bins" that are now being distributed across the city, bringing recycling up to the target level. Greenstar is part of a consortium that is bidding to operate the Ballyogan facility.

This process predates the events of the last week. But it does seem contradictory that it is willing to tender for one service, but not another. Cowman says the council effectively has no right to tender for the domestic waste collection business as it does not control it.

CityBin's Browne agrees, and points out that this system could only be justified if the council collected the money and then paid the private operators - which, he warns, would look very much like taxation.

All these points and more will make their way into affidavits if this row makes it to court. And if it does, you can be sure there will be tonnes of legal paperwork to recycle when it is all over.