Procurement of Waste and Recycling Services in the

Procurement of Waste and Recycling Services in the UK – Lessons for New Zealand Waste. MINZ conference Christchurch 14 – 16 October 2009 Presented by: Duncan Wilson

Introduction − The UK − − Service changes Key Drivers Responses Processes and forms of contract − New Zealand: − − Key drivers Why we contract out services Adapting to changing times Lessons

What is Happening in the UK Changing drivers in the waste sector − National waste minimisation targets devolved to councils − Landfill Tax − LATS – divert biodegradable waste − ‘Gershon’ efficiency savings targets − Changing public expectations

Procuring Waste & Recycling Services Kerbside recycling - Organics kerbside sort? collect? food waste with -green waste – comingled? Simple contracts or separately? compacted, or not? Rubbish collected, landfill Rubbish –taken to Inorganics Charged? Bins? , Bags? Facilities. Fortnightly? MRF. . . MBT… IVC… public investment – or rely on the private sector? collect? charge? frequency? try to recycle, or don’t bother?

What is Happening in the UK Responses from councils − Integrated contracts − Procurement of infrastructure (PFI) − Joint working − Longer contract periods − Need to work hard to attract bidders − Basically bigger and more complicated!

Some UK examples − Traditional/Open Tender Processes − design services − write specifications − tender − Restricted Tender Processes − selection before tender stage − Negotiated Procedure − specifications agreed between contracting parties − Competitive Dialogue Procedure − specifications developed in dialogue − MEAT tender chosen

Forms of Contract − Public/Private Partnership Contracts − long term contracts − regular reviews of specifications − choosing a partner rather than priced specifications − Private Finance Initiatives − BOOT and DBO similar − able to access funding/investment − Cost-plus − open-book accounting with profit added − very flexible in specifications − CCO

Lessons for New Zealand Waste Management landscape changing − − − − Waste Minimisation Act National Waste Strategy Targets Emissions Trading Scheme National Environmental Standards Budgets under pressure Variety and quality of materials collected Flexibility in contracts – transfer of resources and changing processing capacity

Lessons for New Zealand Procurement should be changing − − − Integrated contracts Infrastructure included Longer contract terms Flexibility Tied to objectives – council and government Need to align interests

Summary Beyond kerbside rubbish collection contracts − − Long term, partnering style contracts Specify outcomes, not services Procure services less often Risk – but not necessarily financial risk A different approach = Better results for waste management and financial efficiency

Contact Details Duncan Wilson Lisa Eve Eunomia Research & Consulting duncan@eunomia-consulting. co. nz lisa@eunomia-consulting. co. nz Office: +64 9 376 1909 www. eunomia-consulting. co. nz