Three things are concerning about the impending selection of the company to collect Port Phillip’s household garbage for the next seven years: the tender process involved only one company, the frequency of household garbage collection is likely to be reduced from weekly to fortnightly, and the waste charge will rise in excess of inflation over the period of the contract.
We kid you not. Despite the previous issues in the changeover to the current garbage collection contract in 2023 and two damning reports on that flawed process, Council Officers have managed another questionable tender process that leaves councillors without a competitive choice when they vote to approve another seven-year deal this Wednesday (15 October).
Meanwhile, the council is inviting the public to comment on a Draft Waste and Recycling Strategy, with a closing date for comments that will be after the waste contract decision. To be precise, the council will vote on a new waste contract on 15 October, while the close of community consultation on the waste strategy is 19 October.
Behind this is an undeclared decision to reduce household waste collections from weekly to fortnightly, which is hidden in the consultation draft as a minor dot point as follows:
“reducing access to landfill streams through scarcity principles, including fortnightly garbage collection for houses and townhouses” (Draft Waste and Recycling Strategy p. 4).
TWiSK is not disputing the merits of the so-called scarcity principles but the underhand way that it is presented in the consultation. It’s disingenuous at best.
Council Acknowledges Extraordinary Circumstances
On Wednesday, the Council will consider a recommendation to award a contract extension for Kerbside Services (Waste & Recycling). It’s a big deal worth over $48 million in the first four years.
The first part of the Officer’s recommendation sets the scene for a diabolical selection process:
“[Council] Notes the extraordinary circumstances under which this decision is being made following a public tender process in which the incumbent contractor and tenderer acquired the other tenderer mid tender evaluation.”
Yes, there were only two responses to the Request for Tender. The respondents then merged mid-process, leaving only one tenderer. That forced the council to “Note the outcomes of RFT000348 and determine not to award a tender and advise the tenderer accordingly.”
It then went into Plan B, which was to hold negotiations with the existing supplier (Cleanaway) to extend their current contract.
The officers’ report says that the negotiations for an extension produced a significant reduction: “The negotiated extension price of $47,888,000 (Ex. GST) over four years offers better value than the tender outcome of $51,481,000 (Ex. GST).”
But then Officers added a secretive manoeuvre called a Best Alternative to a Negotiated Agreement (BATNA) to replicate a competitive tender. In Council’s own words:
“To maintain credible negotiation leverage and to provide a comparison for the assessment of best value, Council developed a BATNA premised on acquiring the contractor’s fleet at fair market value and delivering services through an alternative model (such as establishing a labour force). This provided a walk-away option and a robust price check against market outcomes.” (The BATNA model was not made public.)
Mysteriously, the BATNA is $43,693,000 (Ex. GST), which is $4,195,000 (12%) lower than the negotiated extension price. But not low enough for a risk-averse council—they opted for the more expensive contract extension.
But wait, will there be fewer garbage collections?
Only 12 months ago, at the height of the council elections, some candidates were concerned about plans to shift households from weekly to fortnightly kerbside collections. During the campaign, the council remained silent on this topic despite repeated requests for clarity.
The council has made no public announcements about changing the frequency of household kerbside waste collections except for including that option in a draft strategy currently out for community engagement.
The first question that must be asked at the next Council meeting is:
When the proposed contract extension takes effect, what will be the frequency of household garbage collections?
Waste and FOGO Charges on the GoGo
Just as rates rise every year, it is hardly surprising that waste and FOGO charges also rise. But the figures included in the Council Officers’ report show rises way above the rate cap and inflation, especially in the first three years.
The current combined waste and FOGO charge is $307.30—this will rise by over 17% to $360.71 in 2028/29. And of course, what impact will the addition of a fourth bin for glass have on costs?
Rubbish is the core business
We may need a war on waste. We may need a rubbish revolution. We may need to learn to put things in the right bin more often. But we don’t need another rubbish contract fiasco.
Yet, we have the same company (albeit under another name), appointed by essentially the same people, after conceding that the original appointment was unsustainable, being offered a contract extension for another 4 or 7 years.
Let’s hope that councillors will take a long, hard look at this, especially since the community consultation is yet to be complete—or maybe we can put that report directly into the recycling bin.
Read our report from March 2024 (below)
