Procurement of Waste and Recycling Services in the UK – Lessons for New Zealand WasteMINZ 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

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

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

Why do we contract out services? Assumptions and Drivers −Privatisation −Cost −Waste Reduction −Technology −Risk −Council, not a business Are these points still valid?

Adapt procurement to today’s industry Traditionally – NZS 3910 −Engineering format −increasingly less relevant −requires significant adaptation −Achieving the best outcomes? −health and safety −cost efficiency −waste management objectives? −Best outcomes −seeking these, but in what areas?

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 Office: