City garbage collectors to withdraw services over arrears

-owed almost $160M for six months

Is another city garbage crisis looming?

The city’s two largest garbage disposal contractors have once again announced that they would be withdrawing their services due to City Hall’s inability to pay for the work they have done over the last six months.

A total of approximately $160 million is owed to both Puran Brothers Waste Disposal Inc and Cevons Waste Management, which have notified the Mayor and City Council (M&CC) via letters that they would be withdrawing their services effective from Monday, November, 26th, 2018.

“It has been six months since we are pressing for payments. We cannot continue to work if we don’t have the finances. It is a long time since we were paid,” Chief Executive Officer of Cevons Waste Management Morse Archer said yesterday.

Archer added that not being paid for months puts the companies in a difficult financial position and while their contract allows for a 90-day line of credit, his company still needs payment to survive.

Morse Archer

Nonetheless, he remains hopeful that they will be paid sometime soon. According to Archer, while the suspension of service is planned, a meeting is to be held with officials from the M&CC today.

General Manager of Puran Brothers Waste Disposal Inc Kaleshwar Puran expressed similar sentiments to Stabroek News yesterday. Puran lamented that it has been financially challenging for his company, which has commitments to banks to honour.

“We cannot continue to operate like this. We have been lenient and accommodating with the City Council, but it seems as if this what we have to do. We do not want have another high amount outstanding like the last time,” Puran said.

Puran stressed that when they resumed service following the 2017 strike, he was optimistic that the council would have been able to honour its obligations. “The first few months it was good—we were having payments in a timely manner but in May that was when we weren’t getting paid on time,” he added.

In 2017, the companies suspended their services to the city after being owed in excess of $300 million.

Meanwhile, the M&CC, in a press statement yesterday, said arrangements are already in place to cushion the expected blow should the companies move forward with the suspension of their services.

“Five small contractors have indicated that they would work with the Council from Monday, November, 26 2018,” it said.

The M&CC pointed out that because of a serious financial shortfall, it is unable to honour its obligation to both contractors in a timely manner, which it regrets.

“The Council expends approximately 30 million dollars monthly for the removal of waste from the city environs. The monthly income of the council is approximately 89 million dollars and the Solid Waste Management bill accounts for 38 percent of that monthly revenue intake,” the statement said.

Before the 2017 suspension of service by the two contractors, the M&CC would have spent some $48 million a month to provide the service to citizens. The council has reduced the number of collection days in some areas, thereby saving an estimated $18 million per month.

The M&CC also outlined an ambitious plan for garbage collection in 2019 by implementing proposals made by its Solid Waste Department in its 2018 budget. One of the proposals is for the council to charge a per-bin garbage collection fee as a way to offset the expenses.

The M&CC added that it is also looking to re-organise the structure of the Solid Waste Management Department by increasing its fleet of vehicles. This move is likely to save the council substantially if it takes on 50 percent of the work.

Also in the re-structuring proposal is the reexamining of the contractual agreements with both garbage collectors.

A  meeting between the five small contractors and the M&CC is scheduled for today to solidify the details of the new agreement under which they will operate.

 

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