9.6  Involving the private sector

One of the causes of a poor solid waste collection and treatment/disposal programme is a weak cost recovery system. This means there is no effective mechanism for collecting payments to cover the costs of the waste collection system. If the users of a service (the householders and businesses) do not pay for the waste collection and disposal service – either directly or through the kebele local authority – then there will be no funds available to pay wages, maintain the equipment or invest in new equipment and facilities. This leads to a decline in the service offered, which in turn leads to reduced income for the service providers, and so on. Private sector organisations can be better equipped than governmental organisations to collect payments and manage the finances. If they become involved in providing the waste management services, this spiral of declining services can be reversed.

Private companies may also have more experience of waste collection and access to better equipment than local government, resulting in better service provision. This arrangement, where the public and private sectors work together, is called a public–private partnership (PPP) or private sector participation (PSP). For example, a private sector company may be paid to collect a kebele’s waste and to collect payments from individual businesses and residents. If several companies are competing for the same PPP contract this should result in lower costs to the kebele.