Privatization of Marpi landfill operation eyed

A combination of cost, operational control and compliance to regulations has led the Division of Solid Waste Management to consider hiring a private entity to operate the soon-to-be built Marpi sanitary landfill.

DSWM Director John Harder said his office is considering environmental, construction and operations costs, compliance and funding issues in its deliberation on the best way to operate the new dumpsite.

Policy decisions made by the DSWM seem to argue hiring a private contractor is more efficient in operating the Marpi landfill — may it be in a long-term lease or short-term contractual agreement.

According to the policy decision, a contractual operation could minimize the long-term exposure of the local government to financial risk. It also said private operations tend to have a higher level of operational control because they are conscious of the potential fines they may incur.

“A major consideration in the decision to pursue privatization is the quality of the operations and insurance that primary compliance issued are addressed. Private operators are more concerned with enforcement issues and generally can allocate adequate resources to compliance issues more readily than government run facilities which are often limited by larger budget issues. A private operator is not constrained by government procurement requirement and can respond to emergencies, like landfill fires, much more quickly,” the policy decision read.

However, the policy decision also highlighted that even though competitive bidding for landfill management services can often result in lower operating costs, it may not be the case in the CNMI, where funding is perennial problem.

It contended that since the DPW can utilize existing support services and provide short-term personnel support from within the department, in-house operations may very well be the lower cost option.

The policy decision also found out that a dumpsite maintained by a private contractor may charge higher tipping fees. Normally in the past, what other municipalities have done was subsidize the operation.

Under the proposal to privatize the new dumpsite, the CNMI would complete the construction of the facility under phase I of the project. It would then award the second phase to a private company who would lease it for about 50 years.

While, unloading the DSWM with the responsibility for both and long term environmental impacts, the private company in exchange would be allowed to operate the scalehouse and set its own tipping fees.

Mr. Harder said the option to lease the landfill is only one of four proposals his office is currently studying. The other three includes maintaining the present system, which lets the Department of Public Works and DSWM operate the Marpi landfill.

The second option under study is the creation of a semi-autonomous agency that would operate the landfill. The third option is for the CNMI government to simply take ownership of Marpi and then award a contract to a private company to maintain the dumpsite.

Mr. Harder made the presentation of his office’s findings during the general meeting of the Saipan Chamber of Commerce held Wednesday.