G Neuhold www erz ch Zagreb Symposium November

G. Neuhold www. erz. ch Zagreb Symposium November 2010 ERZ: For the clean future of Zurich From Community Burden to Citizen Value

Statement 1 • There is no reason or law why people employed by public organizations have to be slow, corrupt and stupid. Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 2

Statement 2 • There is no reason why public organizations cannot be as sucessful as private ones. Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 3

Pre-Conditions A Politicians and administrative management has to stick to their own business. B Management must have similar environment as private industry. C Above has to be independent of election time. Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 4

City of Zurich Data • • • 390 000 inhabitants 190 000 units 20 000 companies 200 000 commuters every day 2, 5 mioovernight stays 25 000 city admin. employees Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 5

ERZ Plants Sewage Treatment Plant and Composting Facility Waste Incineration Plant Hagenholz Heating Plant Aubrugg Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 6 ara glatt, training center Waste Incineration Plant Josefstrasse Workshop Wallisellen

Situation Solid Waste (1996) • Big debts, operational loss, poor management Waste Water (1966) • Sludge scandal, poor management, big financial reserves City Cleaning (2000) • Too many hierarchical levels, old equipment, military management style Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 7

Main Foci ● Organization ● Leadership ● Finance ● Organizational Culture Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 8

Procurement Process for Vehicles in the City of Zurich ol l oto tock) ol t) hhoopp-p. Pr rio d s r e k z r s s o W ard rdi ie Wotrkstasntd anda t o h (n (nic 1 16 12 a Workshop- (14) 18 3 24 0 4 c 12 b 11 4 b 15 8 . 21 13 10 22 c 9 Sales & Admin 6 5 4 a 26 25 Head of Business Unit 2 Building authority 17 Involvement of Sales & Admin for projects of SFR 5, 000 and over - Multiple processes in internal auditing 20 a 20 b Officer 20 c 7 23 L 19 Operations Three invoices for buying a -car The processes depicted illustrate the complexity of processes in 1997 International Benchmarking - aquabench Gmb. H - [www. aquabench. de] Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 9

Finance Solid Waste • Generally costs too high • Private households subsidice industry Waste Water • Costs too high • Reserves very big District Heating • Costs too high Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 10

Structure decisions taken • • New organization structure following main processes Define responsibility frames Define key management people Define and document division of work between politicians and administration • Give 6 months time period to transfer to new structure Note: All decisions have been verbally personally communicated to all employees by the management and documented accordingly. Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 11

Management Board Organisation ERZ Urs Pauli CEO Peter Wiederkehr Marcel Mueller COO Sanitation Fleet + Facility Services Departments Site Werdhoelzli Thomas Pfister CFO Thomas Kralemann Hagenholz Community Heating Drainage Wastewater Treatment Plant Werdhoelzli Sanitation Fleet + Facility Services Waste Management Waste-to. Energy Plants Community Heating Hans Lamp Peter Wiederkehr Michael Ultsch Peter Schaffner Thomas Kralemann Marcel Mueller Hanspeter Wild Services Human Resources + Services Communications Financial Services IT Services Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 12 Simone Schori Leta Filli Thomas Pfister Giorgio Facchinetti

Operational decisions taken • Each division manager has full operational and planning responsabilities • All processes must have an owner • Safety and healthcare management • Introduce controlling process • Install professional purchasing Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 13

Changing the culture from bureaucratic to service oriented Individual coaching Management coaching General meetings Leadership training Further training Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 14 [www. eurosysteam. de]

What did we achieve? General: • Clear straight line between politicians and operational organization • Planning processes installed • New culture accepted by the employees remaining • Cost reduction • Employees engagement and information process working Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 15

Approach Infrastructure and service price revenue overheads Prop. costs Infrastructure and service price (ISP) = costs for infrastructure Break-Even Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 16 Quantity

Profit/Loss of ERZ waste and waste collection in mio. CHF Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 17

Development of absences Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 18

What did we achieve Solid Waste Management: • Reduced costs of thermal treatment from 230 CHF to 126 CHF per ton • Renewed WTE plant and modernized logistic equipment Waste Water Management: • Installed new structure • Increased electrical self supply from 36% to 93% Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 19

Cargo-Tram Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 20

What did we achieve District Heating: • Merged the district heating devision of the Technical University (ETH), the county and the city of Zurich • Changed from operational loss to profit City Cleaning: • Employees are responsibe for areas and machine park • Activity triggered by occasions Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 21

What did we not achieve • Cost leadership in collection logistics • Market leader in waste management • Founding of cooperation company of the country WTE plants • Installing independent, fully city owned legal entity for ERZ Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 22

Current situation • WTE plant Hagenholz renewed • Biomass (wood) plant (30 MWth/11 MWel) achieved October 5, 2010 • Training program «managing people is a profession» started • New management generation in power since June 2008 Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 23

Zurich Stadt Zürich ERZ Entsorgung + Recycling Zürich Zagreb Symposium November 2010, slide 24