The privatisation of waste management services in Kuching seven years ago to a company with a large percentage of foreign equity has cost the government more money and provided less efficient services, an opposition legislator has alleged.

A privatisation exercise, said Bandar Kuching MP Chong Chieng Jen, is supposed to reduce the size of government machinery, reduce government expenditure and increase efficiency of public services,

But in this case, it was not happening, he said when commenting on the Auditor-General's 2006 Report regarding the privatisation of waste management services to Sarawak Wastes Management Sdn Bhd (SWM) in April 2000.

SWM in turn appointed a sub-contractor Trienekens (Sarawak) Sdn Bhd to undertake the collection and disposal of waste materials covering the areas within the jurisdiction of Kuching City North, Kuching City South and the Padawan Municipal Council.

The concession period is 25 years with a minimum payment of RM13.86 million per annum. This money or whatever is charged for the services come from the three councils.

Trienekens is 60% owned by Sarawak Incorporated (Sarawak government) and the remaining 40% is owned by a German company.

The Auditor-General's Report on the privatisation exercise of waste management services also raised several questions, especially on the terms and conditions of the 25-year concession agreement, the manner in which Trienekens is charging the locals, and over-payments for services.

The AG Report said the concession agreement would have better safeguarded the state government's interests if several clauses had been included such as the requirement of a performance bond, fine for non-observance of rules and specifications and a trial period for evaluating the contractor's performances and services to allow for termination, if necessary.

Volume exceeded

But as it turned out, noted Chong, the contractor was allowed to charge at the rate of RM138 per ton of waste handled for volume of up to 42,000 tons per annum and more than RM190 per ton for amount exceeding this volume.

Within the second year, the volume had already exceeded, he added, alluding this to the lack of proper studies or failure to heed any advice by the relevant authorities.

"It's ridiculous too considering that when the waste volume handled is bigger, the cost should come down instead of going up in line with economies of scale," Chong pointed out.

The weekly collection services were supposed to be three times but instead it had been reduced to two, and still this was not adjusted accordingly in terms of costs to the local authorities, he added.

As a result, one of the councils was even short of money to pay for the services.

The AG Report said that in one instance it found out that the Kuching City South Council (MBKS) was even asked to make an over-payment of RM1 million.

Further, MBKS was supposed to collect rents (amount not specified) after Trienekens took over its dumpsite in Matang, and instead MBKS was charged for collection and disposal of wastes from the areas within its jurisdiction.

Chong, also Kota Sentosa state assemblyperson, told Malaysiakini today that he would question the government during the next sitting of the Sarawak Legislative Assembly in November about the privatisation exercise, who actually benefited from it and why this was allowed to happen.

According to the AG Report, up to December 2006 a total of RM44.12 million had been paid out for the collection and disposal of domestic and commercial wastes in Kuching and its surrounding areas.