Five metropolitan Adelaide councils have had their attempts to jointly procure waste management services cruelled by the Australian Competition and Consumer Commission (ACCC).
Adelaide City, Charles Sturt, Marion, Tea Tree Gully and Port Adelaide Enfield Councils, along with Council Solutions, wanted to club together and contract out their waste collection, recyclables, organics collection and processing and waste disposal services, a contract which would have lasted 17 years.
The councils wanted to cover all four waste and recycling service streams in a single tender using a Request for Proposal (RFP).
But the ACCC stepped in, handing down its decision today (December 20) after receiving a large number of public submissions about the plan, the large majority of which were opposed.
One of the main issues raised by the submissions was that the scope and nature of the proposal would present an unprecedented level of complexity for bidders and prevent some businesses from taking part.
The Commission authorised the plan in draft in February this year but reversed its decision after it concluded that the public benefit from the scheme would be outweighed by the negatives caused by decreasing competition by only having one tender under RFP.
Although the ACCC said the proposal could result in small improvements in community education, the supply of recyclables and organics processing and environmental outcomes, it noted it could be detrimental to the public interest because it could:
- Deter or prevent some potential suppliers from tendering or from submitting competitive bids
- Reduce competition for the supply of waste services to participating councils in the longer term
- Reduce competition for the supply of waste services to non-participating councils
ACCC Commissioner Sarah Court said: “Overall, the ACCC is not satisfied that a joint procurement process would produce a public benefit that would outweigh the effects of a lessening of competition.
“In this case, given the size and scope of the proposed conduct and the uncertainty about the possible outcomes arising from the request for proposal process, the ACCC is not satisfied that net public benefits are likely,” Ms Court said.
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