Business Daily (Nairobi)

8 March 2010

Kenya: Ten Private Firms to Collect Garbage in Nairobi Estates

Waste management in Nairobi is set to change, following a decision by the City Council to award garbage collection contracts to 10 different companies to handle refuse.

This comes as bad news to private companies contracted by estate managers and individual households to collect garbage at an average price of Sh200 per month per household as residents are to pay the fees directly to the ten garbage collectors.

The Nairobi Water and Sewerage Company charges households between Sh100 and 150 for sewerage charges.

Garbage collection business has been thriving as many entrepreneurs sought to fill the gap left by the council's which lacks the capacity to efficiently cater for the populous Nairobi area.

The move to privatise garbage collection in the city follows a memorandum Town Hall sent to the cabinet last month requesting to be allowed to pick private firms to manage solid waste generated by the city residents.

Privatising garbage collection is part of the council's new strategy to clean up the city and create a new stream of revenue from households that generate the waste.

The council has already created 10 zones including Lang'ata, Embakasi, Kasarani, Westlands, Starehe, Makadara, Kamukunji, Dagoretti and Muthurwa where the private garbage collection companies will be assigned to collect, transport and dispose solid waste.

Town Clerk, Philip Kisia, has asked private companies to tender for the provision of solid waste collection, transportation and disposal.

The contracts are likely to be awarded after the opening of the tenders documents at the end of March.

This is the second time that the council is attempting to privatise garbage collection in Nairobi and the new deal to award the contracts to different garbage collection firms goes against earlier plans to award the contract to a single private company.

A deal in 2004 to award a Sh3.5 billion garbage collection business to an Italian firm, Jacorossi Impresse, hit the brick walls after it elicited opposition from cabinet ministers and councillors.

The city's growing population currently standing at over three million people has increased waste production, but the Council has not increased its waste collection capacity.

According to Godfrey Majiwa, Nairobi's Mayor, the city is overwhelmed by the amount of refuse generated by the growing number of residents.

It is estimated that the city generates nearly 870 million tonnes of garbage annually.

The council currently runs 15 garbage collection trucks down from 177 trucks in the 1970s when the population was much smaller.

Garbage pile-ups are common eye sores in most parts of the city as the City Councils continue to rely on internal capacity to collect and dispose off garbage.

Lucrative business

A recent survey by the South African firm Frost and Sullivan says that the East African solid waste management market earned $32.9 million in 2008 signalling a lucrative deal.

"Rapid urbanisation and higher standards of living have been the major drivers of growth in this market," says Frost & Sullivan environmental technologies analyst, Derrick Chikanga. "More solid waste is generated by high income households in their daily activities."

Analysts say the inability by most families to pay up for refuse collection has been a major problem encountered by local authorities in East Africa and could be a hindrance to the successful privatisation of the garbage business.

"While the high-income areas are willing to pay for improved services, the low-income areas receive the least attention, as most households do not have the financial means to meet even the minimum tariffs charged by local authorities. There is also a lack of understanding and prioritisation amongst people towards refuse collection," say analysts from Frost and Sullivan.

Earlier surveys says the council could use its waste as a new source of electricity energy to solve power problems experienced in the city late last year.

Generating electricity from solid waste could also create new sources of revenue for the council struggling to meet its Sh10 billion annual budget.

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