BACKGROUND:The Minister for the Environment's decision on regulation does not necessarily show partiality towards the private waste sector, write OLIVIA KELLYand SUZANNE LYNCH
THE DECISION of Minister for the Environment Phil Hogan to forsake a tenet of the programme for government and not introduce regulation of waste collection will surprise some and dismay others, but it does not necessarily show partiality towards the private waste sector.
Allowing the free-for-all in the household bin market to prevail is more a continuation of his non-interventionist approach to waste that previously benefited Dublin City Council when, soon after taking up the environment post, he said he would not intervene to prevent the construction of the Poolbeg incinerator.
The private sector has argued that abandoning plans to introduce competitive tendering was the only logical option. The policy had been overtaken by events, with almost all local authorities having exited the waste collection market, and there was talk from some operators of legal action if the State chose to interfere in their businesses.
Dublin City Council was the main force behind the tendering proposal, having tried to introduce the policy in its own area in 2007. Panda and Greenstar took action against the council and the High Court in 2009 found in their favour.
The Minister’s decision might now seem an irrelevancy to the council, which last year took the decision to leave the market, selling its waste collection business to Greyhound.
However, the council has not withdrawn its appeal against the court’s decision and its submission on Hogan’s new policy, calling for the tendering system, was made after it decided to stop collecting waste.
The reason the council outlined in the submission was it will need to have legal ownership of the waste collected by private operators and the right to determine the facility at which the waste will be disposed to make the Poolbeg incinerator “bankable”.
The council has been trying to build the plant for more than a decade. Construction started in December 2009 but was suspended the following May and has yet to resume. Negotiations are continuing with the US developer Covanta, the council says. An estimated €80 million in public money has been invested in the project so far, including the cost of land acquisition.
Hogan’s decision to wash his hands of the waste collection row looks like a triumph for the private sector. However, some larger players might have benefited from competitive tendering as it would have weeded out smaller operators nibbling at the edges of their markets.
Private waste companies have been hit hard by the economic downturn. Limerick-based waste company Mr Binman was placed in receivership last year, while Greenstar, the largest waste operator in the country, has effectively been on the market for almost two years. The company, which is owned by NTR, posted a loss of €64 million for the year ended March 2011.
The new policy comes as Bord Na Móna yesterday reported a €23.1 million write-down in the value of its waste business, AES, last year. Chief executive Gabriel D’Arcy said waste industry volumes had shrunk by 30 per cent since it acquired AES, while the number of small players in the market had grown, prompting his call for industry “consolidation”.