Outsourcing to hike sanitation cost
The Punjab government’s decision to outsource the sanitation work in the districts and tehsils to private firms may result in an increase in the expenses on the services amid low collection of the garbage tax.
Punjab Chief Minister Maryam Nawaz Sharif has decided to outsource the cleaning work in 36 districts and 147 tehsils of the province to improve the service in the villages and the cities.
According to sources, the local governments department annually spends about Rs42 billion on sanitation and garbage collection throughout Punjab, except Lahore.
The government has initially set aside Rs120 billion to privatise the sanitation work, increasing the budget by almost two-fold.
It had decided that due to the better performance of the Lahore Waste Management Company (LWMC), the quality of sanitation in the provincial capital was good. The sanitation work in the other tehsils of Punjab would be outsourced.
In the divisions where waste management companies are operating, they would outsource the sanitation system in subordinate districts and tehsils after pre-qualifying private contractors for the purpose.
The LWMC will outsource the sanitation and garbage disposal in Sheikhupura, Nankana and Kasur districts, on which work is progressing rapidly, the sources said.
The sources said Punjab Local Government Minister Muhammad Zeeshan had assigned the task of outsourcing waste management in the districts to officers of the department and the LWMC. Despite reservations reportedly expressed by some officials, the minister issued instructions to do the paperwork to outsource the operations as soon as possible, after which the preparations were started.
The annual budget of the LWMC is about Rs17 billion. However, if the contracts are awarded, the expenses are expected to exceed Rs28 billion.
In 2003-4, the government had set an annual budget of Rs2.5 billion for the metropolitan corporation, which was responsible for cleaning and garbage disposal in the city.
The responsibility of cleaning and garbage collection was given to foreign companies at $19 per tonne. Due to the move, the expenses had increased from Rs2.5 billion to Rs15 billion, the sources said. Due to inflation and increase in expenses, the cost increased to Rs17 billion per year.
The LWMC kept acquiring interest-free loans from the Punjab government, which has now exceeded Rs110 billion, but the money has not been repaid yet.
As far as the fresh move is concerned, the business plan made for garbage tax has resulted in less than 5% recovery.
During the previous government, the LWMC had terminated the contract with foreign companies due to the cost and taken over the cleaning work itself. The sources said about Rs3,000 per tonne was currently being spent on the garbage collection, while the foreign companies had been doing the same work for more than Rs4,000 per tonne.
The LWMC purchased more than 1,200 loaders, dumpers, tractors, sweepers, trucks, compactors and other equipment and vehicles to collect the garbage, on which more than Rs5.5 billion was spent.
The officials claimed that the sanitation system in the city had improved and the company was standing on its own feet.
However, now work on outsourcing has been started again. There are about 15,000 employees of the company, including over 10,000 sanitary workers.
LWMC Chief Executive Officer Sahib Deen Babar told The Express Tribune that the instruction of the provincial government would be implemented. He said outsourcing the cleaning work in Lahore would increase the costs.
The said the company was seeking agreements for cleaning services with private housing societies and hospitals. Along with this, action is being taken against litterers.
Local Government Secretary Shakeel Ahmed Mian said it was the responsibility of the department to implement government policies, so the cleaning and garbage disposal should be outsourced, as was happening all over the world.