LAHORE: The Lahore Waste Management Company (LWMC ) is all determined to plug over a Rs1 billion irregular payments and pilferage of public funds besides overhauling its operational model with a practical sustainability plan at hands.

The company plans to itself go for primary collection of waste from door-to-door as well as mechanical sweeping and mechanical washing of roads besides hiring additional labour through third party contract. It plans outsourcing secondary collection services alone.

The company is facing a serious financial corruption crisis as it identified around Rs900 million payments in lieu of outsourced manpower and MBS incentive, without prior approval of competent forum.

The LWMC Board of Directors, led by chairman Riaz Hameed Chaudhry, has sent a reference to the Chief Minister’s Inspection Team to ascertain the legitimacy and legality of extension in labour contracts and payment of around Rs900 million by company’s Management Procurement Committee (MPC) to the contractors during 2018.

The company had earlier sent a reference to the Punjab local government and community development (LG&CD) department to ascertain the legitimacy and legality of labour contracts extension during 2018. The local government department, however, returned the reference to the company stating that the matter might be inquired into either at the level of top company management or by constituting a committee of the BoD members.

The company says the MPC was authorized only to extend/approve procurements up to Rs20 million following PEPRA rules. The company claims the same contract has now been tendered against and it expects straight away Rs94 million annual savings.

The LWMC entered into contract and outsourced solid waste management operations to international companies Albayrak and Ozpak on Nov 3, 2011 for seven years. Since the companies began operations through phased mobilization till Feb 2013, the Albayrak company’s contract would expire on Jan 31 next, while Ozpak’s contract would expire on Feb 29. Of three zones of Lahore’s 274 union councils, the company itself was covering 22 union councils.

Mr Chaudhry, when contacted, says the company’s board of directors identified extravagant spending and plans saving over Rs210 million annually by just taking rational cost-cutting decisions.

He said the company’s top management hired labour at new rates for an interim period of Nov to June 30 next and straight away saved Rs94 million. Interestingly, the same contractor already working on ‘exorbitant rates’ has won the new contract.

“The company will be saving some Rs91.2 million by just rationalization of labour strength,” he said.

Mr Chaudhry said the company’s board of directors was shocked to know that company’s corporate staff had hired 22 cars on rent and paying Rs15.6 million per year. “The management has disengaged all the rented cars forthwith,” he said.

The company has also written letters to public and private entities for the recoveries of some Rs1.188 billion.

Mr Chaudhry says the company would reduce major cost of repair and maintenance of its own vehicles by retiring some 93 vehicles that are over three decades old. Currently, the company is paying some Rs438 million for maintenance and repair of 389 vehicles. With the retirement of 93 age-old vehicles, the maintenance and repair cost would come down by Rs171 million. Meanwhile, he said, the company would get around 150 vehicles, imported by the two international contractors, on the expiry of their respective contracts.

In order to attain self-sustainability, the LWMC chairman says the company plans increasing its own source income by imposing user fee charges on residential, commercial and industrial units. It believes that it can earn minimum some Rs3.5 billion a year that could be raised up to over Rs12 billion.

In order to streamline the affairs of the LWMC, Mr Chaudhry said Chief Minister Usman Buzdar had constituted a committee on July 16 this year to “review the existing SWM system and recommend future SWM model for Lahore”. The chief minister himself chaired two meetings in August and September to discuss future strategy of SWM in Lahore district.

Since the committee was mandated to review business model and suggest cost-effective solutions among other jobs, he said, it recommended that the LWMC should itself go for primary collection of waste from door-to-door as well as mechanical sweeping and mechanical washing of roads. He said the company would now itself hire additional labour through third party contract. The services of secondary collection would be outsourced.

From now onwards, Mr Chaudhry said, the LWMC also proposed dividing Lahore district into six zones. He said the company was hiring contractors for secondary waste collection for five-month transition period. The company is also busy arranging janitorial material and equipment for primary collection.

He said the company was in the process of finalizing a transaction adviser.

The LWMC has estimated cost for secondary collection for five months to the tune of Rs1.62 billion, while the cost for janitorial items for six months stands at around Rs110 million.

It is learnt that the existing contracts of Albayrak and Ozpak will end in January and February next year and the new contractors would take over from July 1, 2020.

For the interim period till June 30, 2020, the company has received 12 applications and for the next financial year received applications from 13 contractors, including two Turkish, two Chinese and Daewoo, for secondary collection contract in all six zones of Lahore.

As the Mahmood Booti landfill site is meeting its full capacity, it is learnt that the company has identified a new landfill site with the help of Urban Unit at Khara site in Kasur.

Published in Dawn, December 31st, 2019