Dubious Trash Collection Contract Signed

The municipality last week signed a contract for municipal garbage collection and disposal with a Canadian company.

The remaining differences between the two sides were re­solved when the company, Cintec Environment Inc, agreed to the municipality’s terms on March 21, said Sok Leakhena, deputy chief of the municipal cabinet and the city’s negotiator on the gar­bage contract.

The contract represents an important investment in the city’s future, said Tang Nguon-Song, a Cambodian-Canadian who help­ed bring together Cintec, the municipal government, Elec­tricite du Cambodge and PSBK, the private company whose garbage-collection contract with the city Cintec will now take over.

PSBK is the last of four companies—both local and foreign—who have tried and failed to manage the city’s waste collection since it was privatized in 1994.

Trash in the streets continues to be one of Phnom Penh’s most noticeable features, and the notorious Stung Meanchey dump, where families live amid the rubbish and scavenge for a living, is nearing its capacity.

Cintec will succeed where others failed because it has come up with a novel way to collect fees, Tang Nguon-Song said. “All the companies who tried to manage waste here were never successful because they could never collect more than 20 percent—that was the big problem,” he said.

Cintec has made an arrangement with Electricite du Cam­bodge to collect garbage fees by including them on customers’ electricity bills. That way, the company will not have to rely on the municipality to enforce its tariffs, Tang Nguon-Song said.

There are 47 years left on the PSBK contract that Cintec is taking over.

Tang Nguon-Song said Cintec will build a wall two meters high around the existing dump to “keep children away, since it is very dangerous.” He said he did not know what would happen to the people living at the dump.

He said Cintec has also agreed to invest some $20 million in a new landfill, which, unlike Stung Meanchey, will meet international standards of sanitation.

“I think the municipality of Phnom Penh has a great opportunity to have this company Cintec as a partner—a company with a lot of experience and success,” Tang Nguon-Song said.

Not all of Cintec’s experiences have been positive. In El Salvador in 2000, three municipalities in the metropolitan area of the capital San Salvador accused Cintec of not complying with the terms of its contract to operate a sanitary landfill.

The municipalities claimed Cintec never completed several of the components for an integrated waste management system it was contracted to build.

If something similar happens in Phnom Penh, the municipality will have little recourse, Tang Nguon-Song admitted.

Cintec’s Phnom Penh contract lists nine circumstances that would put the municipality in default, enabling Cintec to stop collecting trash and collect damages. But no clauses guarantee Cintec’s performance or allow the municipality to claim damages.

Nowhere does the contract give the municipality a means to cancel the contract or collect damages from Cintec—not even if the company fails to collect trash.

Tang Nguon-Song said these conditions were necessary guarantees for a skittish investor taking a big financial risk in a country many see as dangerous and unstable.

But he acknowledged Cintec had reason to be pleased with the contract. “When you have a negotiation, both parties try to get as much as they can,” he said. “I think we had a good negotiator, and we got a lot from the city. We got even more in our contract with PSBK.”

Phnom Penh Governor Chea Sophara is in Japan and could not be reached for comment. Other municipal officials said only Chea Sophara could comment on the specifics of the contract.

Tang Nguon-Song would not disclose how much money Cintec paid PSBK for the contract or how much money the company expects to make here.

 

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