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  • Dear Readers!

    Public private partnerships create a win-win situation. There is no better way to sustainably safeguard jobs, create new jobs or use efficient innovations for public services and so help keep local fees and charges stable. And yet one might occasionally get the impression here in Germany that there is currently a kind of trench warfare going on between the public and private sectors. People are talking about the current trend of some local authorities to renationalise services. Something that is threatening to eliminate fair competition. There are a number of impartial studies around that have looked in detail at the pros and cons of nationalisation. The international economics research institute, e.ca economics, for example, discovered that this trend towards nationalisation is one that is catching. On the one hand, districts that have renationalised services in the past are more likely to do so again in the future. Consequently, this effect is seen more often in districts where a large percentage of the services are already being delivered by municipal businesses. On the other hand, there is also a noticeable trend towards local authorities trying to drive private sector competition out of their market, in particular in districts with a low population density.


    Having worked together with local authorities for many years, REMONDIS is, of course, critical of these trends. Each and every day, REMONDIS shows that things are so much better when the public and private sectors work together. Being a partner in 50 PPP companies and delivering services via numerous third party contracts, we have perfected the concept of public private partnerships for all those involved – both when it comes to public services and water management. All in all, REMONDIS and its public sector partners serve over 12 million people. The local authorities and their residents are provided with high quality services at a fair price. At the end of the day, they are the ones who finance the public services via the fees and charges they must pay. At the same time, the municipal partners must keep a close eye on their budgets and economise where necessary. Having a reliable source of income from taxes can also help here. It is well worth taking a look at the way the different tasks are allocated in Germany.

    Around 35% of waste management services are provided by the local authorities themselves via their own municipal companies, which means no VAT is charged on these services. More than one third of the people living in Germany, therefore, do not pay VAT on these public services; and yet at the same time they benefit from the payments made by other local inhabitants as a result of funds being allocated between districts. The local authorities themselves lose out as they receive less tax. An unfair tax situation that ends up hurting everyone. Councils are deliberately choosing not to open up their markets even though this would enable them to cut costs. They are effectively holding back the private sector economy rather than making the most of the opportunity available to them to improve their situation and work together with the private sector to take the pressure off the public purse, increase their workforce, stabilise fees and charges and ensure they have a steady and reliable source of income.


    Both we and our long-standing municipal partners agree that the best solution is to work together as partners. This special edition of our company magazine focuses entirely on the subject of public private partnerships and aims to provide a more detailed picture of the various PPP business models, the advantages they bring for local authorities and their residents as well as the positive impact they have on jobs, on the local economies and on the environment. And, as self-praise is no praise, we are more than happy to give our partners the opportunity to speak about their PPPs here. Local authorities, which would like to have a stable and sustainable budget, to provide their residents with high quality services and to achieve the highest possible levels of sustainability in their waste management and recycling sector, will find some valuable suggestions and experiences here to help them in their decision-making process. Here’s to future collaborations!


    Yours

     

    Thomas Conzendorf

The advantages of well-organised PPPs

  • The City of Freiburg and REMONDIS have been running a PPP together since 2002. Lord Mayor of Freiburg, Dr Dieter Salomon, talked about the objectives, advantages and growth potential of Abfallwirtschaft und Stadtreinigung Freiburg GmbH (ASF) – a company that is truly sustainable.

Interview

  • Dr Salomon, what, in your opinion, are the main advantages of operating a public private partnership?

    Dr Dieter Salomon: There are two main advantages: the expertise of the private sector partner and the business model we use in Freiburg where both partners are on an equal footing. REMONDIS provides city cleaning and waste management services for many different towns and cities around the country. Their know-how has played a decisive role in helping ASF to become a competitive business with a strong portfolio.


    Being a Green City, Freiburg wishes its town to develop sustainably. How are ASF’s activities helping you to achieve your strategic goals?

    Dr Dieter Salomon: There are a large number of different components behind the Green City label. Having been awarded this title, Freiburg has become a global role model for sustainable city development. A very important factor here is waste management, which no longer simply involves the collection of waste but covers a much larger area of operations – such as recycling or producing energy from biomass. One of the country’s largest solar farms is located on a closed landfill site in Freiburg, so it is now able to supply a combined heat and power plant with solar power from above and landfill gas from below.


    ASF provides a number of important public services. Does this place certain demands on the economic stability of the private sector partner?

    Dr Dieter Salomon: The public sector is not a business for making a quick buck, so to speak. It is there to provide local residents with essential services such as transport, water, energy, supply and disposal. This also includes waste management. Local authorities need to know that their collaboration work with a private sector firm will be both sound and long lasting. This is only possible with businesses that are solid.

  • “Local authorities need to know that their collaboration work with a private sector firm will be both sound and long lasting.”

    Dr Dieter Salomon, Lord Mayor of Freiburg

Is it easier for a PPP to unite business and environmental matters?

Dr Dieter Salomon: For the most part, business and environmental matters are already intertwined. Investing money to make something greener – for example re-insulating homes to make them more energy efficient – almost always leads to financial savings as well. In this case, lower costs for heating and hot water.

Things are no different in the waste management sector. Our recycling activities, for example. These are good for the environment because less residual waste needs to be processed or disposed of and because fewer primary raw materials need to be consumed – wood for paper or crude oil for plastics. And, of course, there are numerous financial benefits as well.

Dr Dieter Salomon

  • Dr Dieter Salomon (Alliance '90/The Greens) has been Lord Mayor of Freiburg since 2002 – the first large town in Germany ever to elect a green Lord Mayor. He had previously represented his party in the Baden-Württemberg state parliament; in 2002, he was elected leader of the Baden-Württemberg Green Party.

Further information about the PPP company, ASF, and the work it carries out can be found under case studies.

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