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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

Excellent quality & extremely cost effective

  • The City of Frankfurt am Main and REMONDIS are joint shareholders of FES Frankfurter Entsorgungs- und Service GmbH. FES soon became profitable by optimising its core services and entering new fields of business. City Treasurer Uwe Becker talked about this successful PPP that has been offering high quality and cost-effective services for two decades now.

Interview

Mr Becker, FES was established back in 1995 and is one of the longest-running PPP projects in this sector in Germany. Looking back at the last twenty years would you say that FES has been acting as a role model?

Uwe Becker: Without a doubt. The decision of the city authorities to transform its waste management and city cleaning department into the firm FES and to join forces with the privately run company REMONDIS was definitely the right one. Thanks to this decision, the waste management services in Frankfurt reflect the highest environmental, technical and social standards whilst still being cost effective and of a really high quality.

By having REMONDIS contribute their know-how, we’ve not only succeeded in securing jobs but also in expanding our workforce. The success of the business is further proof that we made the right call back then: FES has contributed more than 300 million euros to the city coffers over the last 20 years. These funds have been used to stabilise the fees paid by our local residents for waste management and city cleaning services. In fact, we even managed to reduce waste management fees just a few days ago.

  • “The waste management services in Frankfurt reflect the highest environmental, technical and social standards whilst still being cost effective and of a really high quality.”

    Uwe Becker, Head of the Department for Finances, Equity Holdings and Church Matters in Frankfurt am Main

  • What effect has this had on the quality of services and indeed on the employees?

    Uwe Becker: Right from the very beginning, our goal has been to extend the range of services being offered to our local residents – both in the areas of waste management and city cleaning. FES has already invested more than 200 million euros in modernising and overhauling its business – such as in new vehicle technology, facilities and buildings – as well as in the workforce itself. The latter is particularly important if FES wishes to further extend its role as a full-­service provider in the Rhine-Main region. FES has around 1,300 employees who are paid in line with collective wage agreements. Our employees are the heart and soul of our company and our most important capital. They use their know-how and expertise to ensure our services are of the highest possible quality and delivered as efficiently as possible.


    FES also serves numerous companies located in and around Frankfurt. Can a strong PPP attract new businesses to its region?

    Uwe Becker: FES is certainly an important factor for companies looking to settle in this region. Both businesses and local residents expect to find a reliable, high quality waste management system in place and so FES definitely makes our city more attractive. The company’s wide range of services – such as collecting bulky waste and hazardous substances – is also a great advantage here. Furthermore, it is essential that a city that requires so many services in such a concentrated area, such as Frankfurt, has a company closely linked to the council that can offer many jobs.


    Firms that really want to help conserve resources and prevent climate change have no choice but to invest. What advantages does a PPP have here?

    Uwe Becker: Being the main shareholder in FES, the city council can, of course, exert influence on the company so that such a large logistics business also achieves its climate goals. FES is serving as a role model here, too, which is fantastic. Our waste-to-energy plant, for example, produces electricity and district heat for 45,000 households. The composting system used by Rhein Main Biokompost GmbH, one of FES’ subsidiaries, generates biogas which is also used to produce electricity and district heat; the heat is channelled to Samson, which is located nearby. This is an excellent example of successful collaboration.


    Frankfurt is growing. The city’s population is expected to increase by a further 100,000 people over the next few years. Are you and your PPP well prepared for this?

    Uwe Becker: Yes, because we can react with FES and master any challenges the future may bring with it. The company is able to make quick decisions regarding its workforce and investments in vehicles and facilities. What’s more, it’s very useful having a national and international firm such as REMONDIS as our partner here.

Uwe Becker

  • City Treasurer Uwe Becker is Head of the Department for Finances, Equity Holdings and Church Matters in Frankfurt am Main. He is on the CDU state executive committee and Deputy Federal Chairman of the CDU/CSU ‘KPV’ (Local Government Association). Moreover, he is a member of the executive committee of the Association of Cities and Towns in Hessen and of the executive committee of the Association of German Cities and Towns.

Further details about the PPP company in Frankfurt and its range of services can be found under case studies.

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