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  • Dear Readers!

    This editorial was written and ready for print and focused primarily on the EU’s Green Deal. And then coronavirus spread around the world and the text had to be revised. Despite the current situation, though, the Green Deal remains one of the most important projects for the European circular economy. And many other things have happened as well – the question surrounding DSD, for example.

    It is now official. On 22 April 2020, the first Cartel Panel of the Higher Regional Court [Oberlandesgericht] of Düsseldorf dismissed our appeal against the Cartel Office’s decision. Their ruling surprised us as we were sure that we had the better arguments in favour of us acquiring Duales System Deutschland GmbH. But we live under the rule of law and we will, of course, accept their decision. What we need to do now is to take the time required to take a detailed look at the Panel’s reasons for dismissing our appeal and then carefully decide what our next steps should be. In light of the fact that all other major competitors operate in this market, it will be interesting to see to what extent REMONDIS will get involved in the Dual System in the future.

    It is not so easy to look ahead at the moment, though, faced with the current coronavirus emergency. When the first media reports came through on 29 December last year that China had informed the WHO that it had an unexplained cluster of people suffering from an unidentified lung disease, no one realised just how hard or how fast this virus would affect the globalised economy. It is practically impossible to estimate the costs incurred by the economy grounding to a halt as a result of the virus. And it is not just the private sector that has felt the impact. Many city and district authorities were already in financial difficulties before the crisis began. Their situation can only get worse, now that their revenue from local business tax and their takings from their local amenities have plummeted. Maybe it is time to set aside old arguments and enter into long-term partnerships with the private sector that will benefit both parties – especially when it comes to delivering essential public services. Setting up public private joint ventures dedicated to providing essential services could help mitigate the consequences of the crisis. At the end of the day, ‘a load shared is a load halved’. One positive coming from these unprecedented times is the increased sense of solidarity among the population and towards many sections of the economy. REMONDIS, too, is there to help and support its municipal partners – during this crisis more than ever.

    Past pandemics have rarely lasted longer than two years. At some stage – whether with or without a vaccine – public life and business will return to normal. This will be the moment when it will become clear to all that our planet’s biggest problem – climate change – has not solved itself. Once again, the spotlight will be turned on the European Union’s Green Deal. Looking at a list published from within the EU, there is a danger of important regulations being watered down, especially in the area of the circular economy. In contrast, the German National Academy of Sciences, Leopoldina, expressly advises against neglecting climate action and environmental protection following the Covid-19 crisis in its ad-hoc statement published on 14 April 2020. In fact, it recommends the exact opposite. The economy must be kick-started so that it can grow again and should, it says, be “guided more firmly than before by considerations of sustainability, not least because this offers vast potential for economic growth.” Climate change is and will continue to be the biggest challenge for the future and REMONDIS, being one of the leading water and recycling businesses, will continue to put forward its solutions and play an important role.

    With this in mind: stay safe and stay positive.

    Thomas Conzendorf

Quo vadis PPP?

Are public private partnerships (PPPs) – set up to enable local authorities and privately run businesses to collaborate with one another – a promising way to get things done or are they putting the politics of the common good at risk? Prof. Michael Schäfer and Ludger Rethmann discuss this and other questions in their recently published book: “Öffentlich-Private Partnerschaften. Auslaufmodell oder eine Strategie für kommunale Daseinsvorsorge?” [Public private partnerships. A discontinued model or a strategy for providing essential public services?].

A whole range of positive examples

In the authors’ opinion, this kind of cooperation work between the public and private sectors is by no means obsolete but is often examined from too narrow a perspective. In their book, they provide plenty of facts to show how, over the past few years, both the media and the scientific community have primarily focused their attention on PPPs involved in infrastructure projects. While there is a whole series of negative examples that have attracted much publicity in this segment, the authors concentrate instead on the myriad of long-standing successful collaborations dedicated to delivering essential public services.

A poll of district leaders and mayors

Taking a critical look at this specific type of cooperation work and providing concrete examples, the conclusion they draw is considerably more positive: PPPs between municipal companies and private partners with high levels of expertise work smoothly, are structured to run over a long period of time and benefit both parties. This is underlined by the results of a poll of district authority leaders and mayors – the first of its kind – that showed them to be in favour of a joint venture. Around half of those canvassed prioritised a company with the public sector partner as the majority shareholder, while the versions “awarding contracts to third parties” and “a company with the private sector partner as the majority shareholder” were less popular. This factually based book also reveals that PPPs are particularly common in the energy sector (31.5%) followed, some way back, by waste management and recycling (7.5%).

Looking ahead, one thing is certain: demography, digitisation, sustainability and infrastructure will create huge challenges for compartmentalised, local structures. It will be very difficult for councils to overcome them on their own.

Searching for a strong partner for the future

Looking ahead, one thing is certain: demography, digitisation, sustainability and infrastructure will create huge challenges for compartmentalised, local structures. It will be very difficult for councils to overcome them on their own. One solution here is to team up with a suitable partner, who has the necessary know-how and can grow efficiency and guarantee that essential public services can be delivered reliably with maximum cost stability – and not just in one but in all areas. This not only includes efficient waste collection services but also clean drinking water, public transport and the provision of electricity, gas and the internet. So what is special about these particular services? Local authorities in Germany are obliged to deliver these essential services to their local inhabitants – even if competitors and the market fail. The provision of such public services is, therefore, very different to other segments of the economy – and considerably raises the demands on a PPP business.

Turning an ‘ÖPP’ into an ‘ÖPD’

  • In their book, the authors introduce a new term, moving away from ÖPP (PPP in German) to ÖPD (a public-private sector collaboration for delivering essential public services). The ÖPD cooperation between local authorities and private sector partners guarantees that citizens are provided with the essential services they need reliably and efficiently despite the ever more complicated framework conditions. There are some excellent PPPs around as the authors’ fact-based conclusion clearly shows. “Joint ventures set up between the public and private sectors to deliver essential public services have become the norm when the parties work together closely and sensibly. What’s more, they will become a must looking at the increasing division of labour and the objective coexistence of privately and publicly owned productive property,” explains Ludger Rethmann, REMONDIS Board Chairman.

    • Ludger Rethmann, REMONDIS Board Chairman (left) and Prof. Michael Schäfer

  • Order a copy of Ludger Rethmann and Prof. Michael Schäfer’s book online.

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