The Maleme St transfer station is one of two owned by Tauranga City Council. Photo / File A_030414jb04bop.JPG
By Samantha Motion
A sustainable business advocate fears Kiwi businesses will be locked out of running local public rubbish and recycling services for a decade, as two Bay councils give contracts to a massive multinational.
This week Tauranga City Council announced it had awarded Envirowaste the contract for the city's new rates-funded kerbside rubbish and recycling service.
The same company also won the contract for Western Bay of Plenty District Council's kerbside service in August, after the two councils ran a joint procurement process.
Both agreed to an eight-year term with the option for two more years for the kerbside collections.
But it's not just kerbside collection contracts that are up for grabs.
Western Bay has also awarded EnviroWaste the contracts for consolidating and disposing of the district's waste.
Tauranga was also evaluating proposals for several other parts of the waste system but has so far announced only the kerbside contract winner as the other contracts were still being negotiated.
Sustainable Business Network Bay of Plenty manager Glen Crowther has praised aspects of the new kerbside system, including the price, however, he was concerned about signs of a trend towards a single operator for all services.
"The biggest concern is that a massive multinational company now seems to have all the contracts for the whole of the waste system in Tauranga and Western Bay of Plenty," he said.
"Which means they'll pocket all the profits from sending rubbish to their own landfill in the Waikato."
EnviroWaste owns one of New Zealand's largest landfills in Hampton Downs.
Crowther said he had understood there would be separate contracts for the different parts of the waste system, which may give smaller operators a look in.
In his opinion: "From what we've seen, it looks like the whole lot have gone to one provider, which has locked out all the New Zealand companies for the rest of the decade."
"That reaffirms the need for councils to put in place sustainable procurement policies that support local and sustainable businesses."
One of the biggest players in New Zealand's solid waste scene, EnviroWaste has also won contracts with councils in Hamilton, Mackenzie, Timaru, Waimate and New Plymouth in recent years.
It is owned by Hong Kong-based CK Hutchison Holdings Limited, a company formerly chaired by billionaire Li Ka-shing - one of the world's richest men - and currently chaired by his son.
The new council-run services in Tauranga and the Western Bay are a significant change for the region, which has largely had kerbside collections, in particular, in the hands of the open market for decades.
Smaller kerbside collection companies are expecting to take a big hit from the change, with one telling the Bay of Plenty Times he would likely have to let go of 60 per cent of his staff - 12 or 13 people.
Some residents have expressed concern about the contract going to a foreign-owned company.
Both local councils have said EnviroWaste will be hiring skilled people in the area, and that the company employs 900 people nationwide even though it is not New Zealand-owned.
Both also said their procurement processes were competitive and equally open to industry proposals, including locals, and that they could not treat overseas suppliers less favourably than New Zealand suppliers.
"Procurement decisions must be based on the best public value."
Asked how the value of supporting locally-owned business was factored into the procurement process, a Tauranga City spokeswoman said: "Each proposal was evaluated on its merits and scoring was calculated across the weighted attributes, i.e, capability, capacity, solution and price.
"EnviroWaste delivered the best solution for our community overall."
The council was also evaluating proposals for the following services, which had existing leases up for renewal: Leasing, upgrading and managing the council's two transfer stations (Te Maunga and Maleme St); transport and disposal of domestic rubbish to landfill; transport and processing of organic waste; and collection and management of litter, public place bins, and illegal dumping.
"We went through the required procurement process in order to renew these leases," the spokeswoman said.
The council could only provide information about the awarding of the
domestic kerbside collections "at this stage" because the other contracts were still being negotiated through a confidential procurement process.
Tauranga mayor Tenby Powell said the council awarded hundreds of contracts a year and had a responsibility to ratepayers to get the best quality, service and cost.
Disqualifying non-local tenders would add "a huge cost to our rates bill, which ratepayers would rightly take us to task for".
"Nothing would have pleased me more than to have a local firm win this contract, but that should not and cannot come at a cost to ratepayers."
He said the ownership of the successful firm was "irrelevant". "They have significant operations in New Zealand, will be employing local people and paying the living wage."
Western Bay of Plenty District Council utilities manager Kelvin Hill said its tender process included service provider options for collection, consolidation and disposal of waste.
The district did not have any transfer stations or active landfills where waste material could be sent.
"Businesses could tender for individual parts of the contract or put forward a tender featuring multiple services. The contract was split to provide all options," he said.
"A competitive process was followed and EnviroWaste awarded the contract."
A Local Government New Zealand spokesman said the council had to weigh up a lot of competing factors when making procurement decisions.
"They need to consider value for ratepayers, the capability of the providers, the size and scale of the contact, its detail and the impacts on the environment and community just for starters."
He said there were a range of guides. In co-investment situations, the council used their partner's guidelines. The also use the Government Procurement Rules - which both Tauranga and Western Bay have pointed to.
"Every council knows their community best, and it's up to them to determine whether their community is willing to pay more for contracts that might deliver certain perceived outcomes.
"We would encourage councils doing so to consider the Government Procurement Rules around non-discrimination and integrity."
EnviroWaste has been contacted for comment.
Western Bay of Plenty
- Urban residents: $149 per year for recycling, glass and food waste collections
- Rural residents: $98 for recycling and glass collections
- Pay-as-you-throw rubbish: $3.95 per collection.
- $230 per year for rubbish, recycling, glass and food scraps collections
- $60 per year for opt-in garden waste collection
- More bin sizes with yet to-be-determined costs to be offered from year two