Environment, Finance ministries to probe waste treatment monopolies

From 2008 to 2013, landfilling prices rose at certain sites by as much as 100 percent – a phenomenon that the Environment Ministry attributed to the lack of competition among service providers.

By
November 16, 2015 23:55
2 minute read.
Men unload trash from a pick-up truck as scavengers sift through garbage at a temporary dump

Men unload trash from a pick-up truck as scavengers sift through garbage at a temporary dump. (photo credit: REUTERS)

Aiming to trim down excess public spending on garbage collection and foster competition in the sector, the Environmental Protection and Finance ministries are establishing a joint committee to examine municipal waste handling and price supervision.

An initial investigation conducted by the Environment Ministry indicated that the sector is controlled by monopolistic ventures that are generating excess profits of hundreds of millions of shekels each year. Such profits have spurred a rise in the cost of living, as members of the public finance the evacuation and treatment of waste through their municipal property taxes, the ministry explained.

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“Whether we’re talking about payment surpluses in mobile phones, housing or waste – the money is money that the public pays,” said Environmental Protection Ministry director-general Yisrael Danzinger. “We will lead a revolution in the waste industry in order to minimize unnecessary costs to local authorities and to the consumer’s pocket.”

In its first stage of operation, the joint committee will hold a hearing to examine the supervisory process of the municipal waste sector, including the possibility of requiring reports on profits and pricing. The hearing follows the receipt of complaints from local authorities about unreasonably rising prices associated with garbage handling, with regards to waste transfer stations, transport and landfilling, the ministry said.

From 2008 to 2013, landfilling prices rose at certain sites by as much as 100 percent – a phenomenon that the Environment Ministry attributed to the lack of competition among service providers. Only 13 landfills exist in Israel and their services are unable to sufficiently meet demand, the ministry said.

Meanwhile, waste transfer stations operate as regional monopolies, as a result of waste quantity limitations and both environmental and planning restrictions, according to the ministry. A ministry analysis of several transfer stations indicated that on average, prices are 119% higher than fees that would already include a reasonable profit for the companies.

“An obligation to report on profits and prices would enable a broadened and detailed picture of the waste sector in Israel, on the way toward revolutionizing the field,” the ministry said.

Amit Bracha, executive director of Adam Teva V’Din (Israel Union for Environmental Defense), praised the decision to investigate the pricing mechanisms as part of the ministry’s overall progress over the past few years in the waste and recycling sectors.

He also called for a boost in the waste separation program, through which some local authorities provide residents with different bins for dry and organic waste.

“We are happy to hear that the environmental protection minister understands that removing obstacles is a central tool toward strengthening and reinforcing the recycling sector in Israel,” Bracha said. “Now we must promote the restoration of public and municipal confidence in the [waste] separation process, establish additional facilities for treatment of organic waste and continue to support local authorities that are separating [their waste].”


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