Reform of waste sector could reduce bills - report

Householders' waste collection bills would fall if the Government reformed the sector, according to the findings of an investigation into the business.

The Competition Authority, the State's monopolies and price fixing watchdog, believes that prices would decline if private sector players were forced to compete with each other for contracts from local authorities to provide the services to householders. The authority's finding was the result of an investigation into the Wicklow operations the of NTR-owned waste company, Greenstar.

The study sparked a review of the market in 27 different regions in the Republic. The report clears Greenstar of any wrongdoing.

When local authorities allow private operators to collect domestic waste, they license the companies and allow them to compete with each other for business from individual householders. But in a report on the Competition Authority investigation of the sector, its monopolies division director, Paul Gorecki, said this was not working in consumers' interests.

"The market for household collection is not working well for consumers," he said. "Competition law is neither an appropriate nor an effective remedy in this case.

"However, extensive international experience demonstrates that competitive tendering is the best method of ensuring that household waste collection providers deliver consumers good service at competitive prices."

Mr Gorecki quoted a range of studies from the US, UK, Italy, Denmark and a number of other EU countries that show this approach often cut bills by anything from 10 per cent to more than 30 per cent, depending on the location and level of service.

The authority's investigation of Greenstar's operations in northeast Wicklow found that the company had a dominant position in that market, but said it was not abusing it. In 2001, the authority received complaints about the lack of choice in waste collection services in the region and that Greenstar was charging excessive prices.

The report shows that in 2004, the company charged €372 a year to collect 240-litre bins from households. This was 1.6 per cent more than the average for the 27 regions that the authority examined. It also shows that increases in the cost of the same service were dramatically ahead of inflation between 2001 and 2004. The biggest difference was in 2002, when the charge went up by almost 36 per cent, compared to 2.7 per cent inflation.

The report acknowledges that the company's costs also increased during this period.

Between 2000 and 2002, Greenstar bought three rivals who were operating in the same area. The company is run by chief executive Steve Cowman, but its ultimate parent is the utility and toll roads operator, NTR.

The Irish Waste Management Association (IWMA) said the report failed to deal with the fact that local authorities provided waste management services while regulating their competitors. A statement from business body Ibec said local authorities were making €800 million profit from the landfill charges imposed on businesses.