Public/Private Partnership
Public-private partnerships (PPPs) are attracting interest in various industries and sectors across the world. PPPs are seen as instruments for more and better infrastructure. In many cases, PPPs offer fiscal advantages in various projects. For example, the public organization could save significant amount of money by outsourcing a function to a better-equipped private organization. PPPs are also critical in avoiding policy errors due to the involvement of more stakeholders since diverse expertise is present (Prats, 2019). In this case, the focus is on a waste management problem in Houston, Texas, where recyclable waste is being dumped in landfills. The presence of both private and public entities has not produced any tangible results, which explains the need for PPPs. As such, the PPPs are perceived to be a useful tool in waste management efforts.
Private Organization: Waste Management Inc., Houston TX
Waste Management Inc., Houston, TX is a holding company in waste management. It is the largest company in the United States that handles solid waste. Waste Management Inc. operates through multiple subsidiaries across the United States and Canada. The company owns and/or operates an estimated 270 landfills, which is the largest network in the industry. The private firm offers its services to millions of customers in residential, industrial, commercial, and municipal levels. Additionally, the company offers a diverse portfolio of services, including recycling, waste collection, transfer, and disposal. Since the company is headquartered in Houston, Texas, it is considered to be the best-suited for the purpose of forming a partnership with the city’s waste management department to help resolve the waste problem in the city. Its financial might is also an important factor for consideration.
Public Organization: Solid Waste Management Department, Houston, TX.
Solid Waste Management Department (SWMD) is the city of Houston’s department involved in managing issues of solid waste management. The department is responsible for several functions, which including managing dumping services, landfills and projecting the future needs for landfills and waste reduction efforts. As a publicly funded organization, it can be assumed that the department’s capabilities are determined by the funds provided by the city’s leadership. SWMD is concerned with its financial sustainability, which means that it has to take into account the funds available and its expenditures in waste management. Additionally, it can be argued that the department is not as effective in the actual management of waste, which means that it is more suited to serve such purposes as formulating policies. Its capacity is not as comprehensive as the companies in the private sector.
Waste Problem in Houston, TX.
The city of Houston, Texas, is facing critical challenges with solid waste management. This is despite the city having a dedicated department and the world’s largest solid waste management company in the country. The problem has been present for the past few years, and it comprises three major dimensions. First, the city is producing more garbage than before, so waste management efforts must be improved to keep up with the pace (Strauss, 2022). Second, the city is facing a shortage of solid waste workers, which serves to exacerbate the problem (Love, 2022). Lastly, more recyclable waste is being tossed in landfills, which is causing an accumulation of solid waste in landfills (Rogalski, 2019). Therefore, the city’s SWMD and the private companies are increasingly overwhelmed by the solid waste problem neither have a working solution.
Public/Private Partnership in Recycling Project
The nature of the partnership between Waste management, Inc. and the SWMD is in the form of facilitating recycling practices to reduce the loss of recyclables and protect the environment. Recycling projects are in the form of capital investments in the necessary infrastructure, including recycling plants and waste collection equipment. The investment in recycling plants will mean that all recyclable waste does not go to the landfill. The current recycling efforts are deemed inadequate, as explained by the tossing of recyclable waste in the landfills. Considering that the company and SWMD both manage landfills, the two can pool resources to build infrastructure, drive innovation, and share expertise in recycling. Additionally, the two entities can jointly develop waste management and recycling policies to help the city overcome the problem.
Role of Waste Management Inc.
The private company is a for-profit enterprise, which means that most of its contributions will be based on the financial incentives of the partnership. First, it is important to express that Waste Management, Inc. already deals in recycling solid waste, which means it has the knowledge and expertise needed. As such, the company will bring to the partnership this knowledge and expertise. Secondly, the company is expected to reap financial benefits, which means it will have to make the necessary investments in terms of finances. In this case, the PPP is perceived to be a commercial deal benefiting all the stakeholders that invest in it. Recycling means goods are produced, and the company will be responsible for marketing and selling the recycled products. Lastly, the company’s experience and expertise in matters of solid waste management means it can offer insights during the formulation and implementation of waste management policies.
Role of Solid Waste Management Department
The SWMD plays a critical role in the establishment of the recycling facilities. The department will be expected to provide some of the initial investment funds needed to set up the facilities. The ratio of this investment will have to be agreed upon by the parties involved. Secondly, the department will be responsible for developing the necessary waste management policies that ensure that the city can address the waste problem. Examples include requiring customers to separate their waste into the necessary categories to make collection and recycling easier for the Waste management, Inc. The rationale is that such policies could make it possible to cut operational costs, which could go a long way in making the PPP economically feasible. Legal aid is also offered by the department to the company in its recycling practices. Lastly, the department will educate the public on the best waste management practices and policies to help ensure all stakeholders participate in the project.
Economic Viability of the Partnership
The waste management PPP between SWMD and Waste Management, Inc. can only proceed if it is economically viable. The rationale is that private entities are for-profit businesses who seek to obtain rewards and returns for the risks taken and investments made. Therefore, the private company will enjoy the economic benefits in terms of the revenues from the sale of recycled products. Additionally, the company will become the preferred firm to offer waste collection as a result of the partnership, an arrangement that will also attract fees from customers. The policies made by the department allow for cost-cutting possibilities, which make the project less costly. The city can create jobs in the recycling plants and across all other operations of the project. Additionally, the department will have to spend less funds on waste management, which should help address the financial sustainability concerns.
Environmental Viability of the Partnership
The PPP works in an area where environmental issues are a major concern. Across the planet, there are concerns that landfills are becoming full of waste, which means new spaces have to be found for waste dumping purposed. Solid waste plays a vital role in these dynamics, which means that recycling solid waste helps save spaces in landfills. Recycling also reduces solid waste, which will have a positive effect on the pollution levels. The rationale is that most of the waste materials in landfills are pollutants, which means water, land, and air pollution are the major results of waste. Lastly, reduced resource exploitation saves the environment since recycling reduces the need for fresh resources. Overall, the essence of the PPP is to enhance environmental sustainability through improved waste management practices.
Funding – Positives
The PPP is funded by both partners, which means that each of them will have to make financial outlays to facilitate the establishment of new recycling facilities. The start-up costs are shared between the SWMD and Waste Management, Inc. in a ratio that is to be established. Considering that the company will reap most of the financial benefits, it is recommended that it contributes an estimated 65% of the total costs. The reduced financial burden on the part of SWMD is another positive in terms of funding. The rationale is that the department could spend more money controlling waste in Houston than it would to finance the new recycling project. There is a larger capital base since both partners will be making investments. The department is publicly-funded, which means that the amount it can contribute is variable. The company relies on its capital base and the investors when making new ventures.
Funding – negatives
The major challenge in funding is determining the ratio of costs to allocate to each partner. The argument is the department will be hoping to spend less than the current expenditures in solid waste management by outsourcing major functions to the company. Additionally, the company will be hoping to reduce costs to make it possible to achieve desirable profits from the venture. Currently, the company has its operations that involve recycling, which means that the PPP can either create new recycling plants or expand operations in the existing infrastructure. Either way, there is no formular developed to determine the ratios of funds that each partner will pay. Another challenge is the returns from the venture are uncertain. In this case, the company mat not be willing to spend too much money o a venture that will not be profitable. Similarly, the operational costs are unknown, which means that initial funds for running the plants may be needed.
Management – Positives
The PPP will be managed mostly by the company considering its knowledge and expertise in running recycling operations. This way, it can be argued that the city’s solid waste management operations have been outsourced to the Waste management, Inc. However, there are several governance issues that have to be observed, most of which will be handled by the SWMD. In terms of governance, the focus is majorly on the rules and regulations or the legislature and policies surrounding solid waste management and quality standards in recycling. The department will handle the governance issues in addition to the aforementioned legal aid to the PPP. Critical management decisions can be made jointly, especially when such decisions go beyond the internal operations. Another positive aspect in management is that the PPP will be enjoying favorable policies, which means that compliance will become less of a challenge for the management.
Management – Negatives
The major negative issue in the management is that much of the burden will be borne by the company. The argument is that once the facilities have been built, the company will be responsible for running them and the entire recycling project. Therefore, the PPP may encounter managerial challenges where the company may feel that the burden could be shared more evenly. Another managerial challenge is the potential conflict of interest between the partners. For the SWMD, the primary focus on reducing the amount of recyclable waste being tossed in the landfills. For the company, the operations are designed to help maximize returns, even if the overall objective of reducing waste is not achieved. There is a need to ensure that all parties are guided by the utmost concern for the problem. Lastly, stakeholder management could become an issue, especially due to the differences in interests.
Staffing – Positives
Staffing is one area where the PPP can face critical challenges. However, both partners can play a critical role in ensuring that the PPP is well-staffed. Firstly, the company already has a pool where it can source workers in the current labor market. Some of the critical positions can be filled by the company’s current employees working in other facilities. The rest can hired through a joint effort between the company and the department. Due to the nature of the PPP, some of the civil workers in the SWMD can be relocated to the new project. In this case, this relocation means that expertise is spread out across both partners and that the interest of each are well-represented. Additionally, such a relocation means that the workers under the city’s payroll can reduce the labor costs at the new facilities, which helps improve the economic feasibility of the project.
Staffing – Negatives
One of the main issues contributing to the waste problem is the declining number of workers. According to Love (2022), the shortage is a national problem, which means that the PPP cannot hope to bring workers from outside the city. Staffing will pose the greatest challenges, especially for those positions involving driving and operating side loaders. Designing and allocating roles will become critical for the PPP considering the contributions made by each partner. The challenge will be that the individuals working in the SWMD have different roles and their relocation to the PPP will be difficult. Finally, the high competition for solid waste workers is so high in the city that the PPP will have to pay higher wages (Love, 2022). Higher pay means more labor and operational costs for the PPP.
Training – Positives
The PPP comprises a new set of workers with roles not necessarily similar to their previous jobs. For this reason, the need to train workers is felt and the inherent advantages of the PPP can help achieve greater results. Firstly, the collaboration can help the PPP design new training programs that are better than the industry standards. The rationale is that the objectives of the PPP are broader than those of either the private or public organizations, which means that training helps broaden the skills and capabilities of the workers. The training programs can pool expertise from both sector, which also helps improve the productivity of the workers. Lastly, the collaboration between the partners help lower the costs of training workers.
Training – Negatives
While training offers multiple positive results, it can be argued that the initial procedures and processes will be challenging for the PPP. Firstly, the fact that the PPP combines private and public sector requirements means that new training programs have to be established from scratch. This means that designing and implementation of the program will have to follow new protocols and be developed with new objectives in mind. Therefore, there are no effective training program benchmarks, meaning the objectives and expectations remain unknown. Lastly, the initial costs of setting up the training programs may be higher due to the nature of the PPP and personnel requirements. Overall, the initial costs of setting up the PPP will have to consider the need for training and development.
Scheduling – positives
The PPP will have a new operational control different from the company of the department. Therefore, waste collection and other activities can be scheduled to fit the purpose and needs of the new project. The PPP will offer centralized operational control that helps mitigate risks faced by either the company or the department. Centralized planning means that the goals are set jointly between the partners, which helps streamline the waste management processes. In this case, the planning is intended to serve the goals of both parties, which means less waste for the SWMD and more revenues for the Waste management, Inc. Lastly, waste classification practices by the customers as a result of a relevant policy will helps with the scheduling efforts. All recyclables can be collected on certain days, while the rest of the waste can be collected on others.
Scheduling – Negatives
The scheduling for waste collection and other operations can be designed separately, which means that the PPP follows its independent timeline. If this is the case, then there will be a massive disruption of the normal schedules, which might not go down well with some stakeholders. The recommendation given previously is that since the department makes a policy of separating recyclables from the rest of the waste, this category can be collected follow independent schedules while the rest of the waste is collected using the normal. The PPP does not focus majorly on the non-recyclables, which means that its other operations across its facilities could be disrupted. Additionally, the PPP may need to establish a new transport infrastructure due to the scheduling problems and the fact that the project deals only in recyclables.
Critical Success factors
The success of the PPP lies mostly with the economic feasibility of the project, considering that the Waste management, Inc. is a private sector business concerned with profitability. Therefore, the PPP will work well if the revenues from recycling and waste collected are high enough to cover costs and yield good profits. The fees for collected could be fixed or predetermined by the local authorities. As such, it means that a significant amount percentage of the revenues will come from recycling. The implication is that a large market for recycled goods becomes a critical success factor. Lastly, compliance among the customers is necessary, especially with regard to waste separation. Sorting activities could be costly and time-consuming, which means that time and money are wasted on unnecessary activities.
References
Love, C. (2022). A shortage of Houston solid waste workers is causing recycling pickup delays. Houston Public Media. Web.
Rogalski, J. (2019). 2.6M pounds of Houston recyclables tossed in landfill. Khou.com.
Strauss, D. (2022). Houston is producing more garbage, but there are fewer sanitation workers to do the job. Click2Houston, Web.