The ACCC is proposing to grant authorisation to four Adelaide councils to jointly procure certain waste management services.
The four councils, Adelaide, Charles Sturt, Marion and Port Adelaide Enfield, and a council-owned procurement body called Council Solutions, are seeking authorisation to appoint common providers to supply waste processing and disposal services for recyclables, as well as collection services for bulk bins, hard waste and street litter.
Council Solutions is a regional subsidiary that undertakes collaborative procurement, contract negotiation and management on behalf of its constituent councils which include Adelaide City Council and the Cities of Charles Sturt, Marion, Onkaparinga, Salisbury and Tea Tree Gully.
The councils will run tender processes for each of these six waste streams.
ACCC Commissioner Sarah Court said the competition watchdog considers that running joint tender processes is likely to improve the four councils’ purchasing power.
“Coming together to offer a larger block of work is likely to encourage more competition from suppliers than if each council contracted separately. This is likely to result in cost savings that can be passed on to residents in lower costs or improved services,” Court said.
“Some suppliers have raised concerns that the joint tenders will make it more difficult for them to participate, and will reduce competition and increase prices for waste services in Adelaide, particularly in the longer term. Our preliminary view is that this is unlikely; there will be a number of competitors for these tenders, and the unsuccessful tenderers will continue to have other opportunities to provide waste management services in South Australia,” Court said.
The ACCC has issued draft determinations and expects to make final determinations in late October after considering submissions on the draft determination.
The ACCC has also today granted interim authorisation, which will allow the councils to commence the tender processes, with the aim of having contracts in place by May 2019, while the ACCC continues its considerations.
However, no contracts can be entered into unless and until the ACCC makes a final decision granting authorisation.
In July the ACCC released a draft determination proposing to grant authorisation to the proposed kerbside waste collection joint procurement arrangements.
The draft determinations released today relate to receival and processing application and bulk bin, hard waste and street litter collections application.