Rubbish competition

City and private-sector workers go bin-to-bin

ON A cold damp morning in Chicago’s Irving Park a rubbish truck slowly inches its way along an alley, seeking out one of the city’s 240,000 recycling bins. The workers are unruffled over the latest initiative: a competition to see whether the public or the private sector can get the job done better. “We’ll just keep doing it the way we have always done,” says one city worker.

Greater privatisation of Chicago’s waste collection has been on the agenda for a while. However the new mayor has decided that the private sector must compete with the public sector to see who gets to continue to collect the city’s recycling. Each company has been allocated similar areas of the city to service, and their cost and performance will be compared with that of the public sector.

The idea reflects an eternal dilemma for governments everywhere. While the private-sector ought to be cheaper at providing services, often after the contract is won either the price goes up, or the quality of the service down; sometimes both. The city of Chicago is not the first to try what some authorities call “managed competition”. It has been used in Charlotte, Indianapolis and in Phoenix, where the idea has a long history. One study found that in Phoenix between 1979 and 1994 the private sector won 34 contracts while the public sector won 22. In Chicago, the two firms in the “competition” actually already have seven-year contracts. However, the city insists that the companies concerned are well aware there is a competition, that their performance will be reviewed next year, and that contracts can and will be terminated if the companies fail to perform as well as the public sector does.

Who will do best? The city workers reckon they have an advantage because they know their way in and out of Chicago’s tricky alleyways. But Bill Plunkett, a spokesperson for Waste Management, one of the two private-sector contenders, says it has already put a lot of work into route planning. His company also plans to operate one-man trucks (the city currently uses two). As Chicago attempts to provide services in an era of greater austerity, doing things as they have always been done is no longer an option.

Source: The Economist



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