Private Sector Participation in Municipal Solid Waste Service: Experiences in Latin America

Abstract

Preliminary case studies have been carried out on private sector provision of municipal solid waste services in four large Latin American cities (Buenos Aires, Caracas, Santiago, and São Paulo). A parallel study of a metropolitan solid waste company in Rio de Janeiro provided a comparison. These experiences substantiate that private service provision can be successful in terms of cost containment and quality of service as long as the conditions for contestable markets are met. In the four cases studied, private collection firms have exclusive right to service specific areas of the city and contracts are awarded by competitive bidding. These and other studies in the region suggest that local authorities should establish operational and environmental regulations and standards to guide private contractors, and have the capacity to oversee these activities. Supervision and payment should be based on specific performance measures. More attention needs to be given to cost recovery, financial stability and improved disposal practices. There appears to be substantial scope for expanded private sector involvement in the region.