Wednesday 7 December 2016

Bin charges controversy: Pay-by-weight binned for at least one year

Minister threatens to bring in regulation and says some waste firms hiked prices

Published 22/06/2016 | 02:30

Simon Coveney: Regulation warning to waste firms. Pictures:Arthur Carron
Simon Coveney: Regulation warning to waste firms. Pictures:Arthur Carron

The Government will introduce legislation to cap bin charges if companies hike family bills over the next year.

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The controversial pay-by-weight system will not be introduced for at least 12 months to allow households to "get used to" the new charges. Prices will be frozen at current rates until at least next July.

The move comes after Local Government Minister Simon Coveney accused some operators of using confusion over the introduction of the system to hike charges and make up for financial losses.

He said the 'stick' of regulation would be used if firms refused to abide by the price freeze designed to allay concerns about rising household bills.

Mr Coveney said that switching to a system where customers were charged on the basis of how much black, brown and green bin waste was produced should not have represented an opportunity for some firms to raise prices.

Read more: Coveney threatens to introduce regulations if bin operators fail to enforce price freeze

"It's probably fair to say there's some companies that did look at the confusion and transition period as a way of increasing the net charge, perhaps to make up for the fact that some of their customer base were essentially getting a service at below cost," he said.

"To be honest, that is not my problem. I made it very clear that Government is not going to facilitate companies which, in some cases in an effort to get market share, had very low charges. This policy is not an opportunity for any company to take advantage of a changeover process to hike up bills, and that is part of what caused so much annoyance."

Under the deal struck between the State and Irish Waste Management Association (IWEA), which represents the major companies, prices will be frozen at current rates for the next year. A public information campaign will be rolled out over the next six months, and from next January customers will be given the option of moving to the new pay-by-weight system.

Under the new system, customers were due to pay a minimum charge of 6 cent per kg of brown/organic waste disposed, and 11 cent for black bin waste destined for landfill. This was designed to ensure that the costs of disposal were met, and effectively banned below-cost selling.

While there was no minimum charge for green bin waste to be recycled, some operators took the opportunity to hike or introduce a standing charge, which meant that some household bills rocketed.

The IWMA said no householder disposing the same quantities of waste would face additional charges.

"During this transition period, companies will provide a cost comparison to their customers that will show the amount of waste they are disposing, their current costs and the equivalent pay-by-weight charges," it said.

"Providing this cost comparison will help householders better understand how waste charges are calculated. They will be able to see how recycling more can reduce their annual charges."

Fianna Fáil leader, Micheál Martin, said the change-over was "a debacle", while Sinn Féin leader Gerry Adams accused the Taoiseach of giving "rubbish answers" to questions about people who were suffering due to increased charges for services.

Mr Coveney warned that the waste market was competitive but "it doesn't have to remain the case".

Citing the example of other regulated utilities, such as water or energy, he said there was a case to be made that refuse collection was a utility like any other, and could be subject to a price cap under regulation.

The charges are to be revisited in 12 months' time with the intention of introducing pay by weight at that stage, although the department has not committed to its introduction.

Responsibility for waste management will now transfer to the Department of Communications, Climate Action and the Environment under Denis Naughten, who will review the situation next year.

Read more: Households can 'opt in' to new rubbish charge system from next January

The new bin charge deal

  • There will be no increase in bin charges for the next 12 months. All of the companies in the Irish Waste Management Association (IWMA) have agreed to freeze their prices, along with other major players including Greyhound and City Bin
  • Over the next six months, a public awareness campaign funded by industry will inform households of the benefit of segregating waste to reduce bills.
  • From January, dual billing will be introduced. Bills will detail the weight of each waste type produced. The cost under the existing billing process will be charged, but the cost under pay-by-weight will also be set out.
  • Customers can transfer to pay-by-weight system if they choose to do so from the start of the year.
  • In a year, the Government will reassess the situation and introduce pay-by-weight, or defer a decision.
  • Waste companies have committed to having no charge for disposal of incontinence wear issued by the HSE to around 60,000 people. In return, they will receive a €3m reduction in landfill fees. €1.5m of this will be used by the industry to fund the awareness campaign.
  • If the companies do not abide by the price freeze, legislation will be introduced to set a maximum charge.
  • Companies will not be allowed to engage in below-cost selling to secure market share.

Irish Independent

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