Doubts over Ramky deal

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Visakhapatnam: The Greater Visakhapatnam Municipal Corporation’s ambitious plan to go in for Integrated Solid Waste Management (ISWM) through a public-private partnership for disposal of its garbage is facing rough weather.
Several objections have been raised about the civic authorities having signed an agreement with Ramky Enviro Engineers Ltd (REEL) which quoted an amount more than the GVMC is now spending on handling a tonne of garbage.
The city generates around 1,000 tonnes of garbage per day. While GVMC currently spends Rs 1,100 per tonne of garbage, it agreed to pay Rs 1,685, as quoted by Ramky, to the private firm. REEL had only two days ago announced its plans to enter the capital market with an initial public offer to raise up to RS 1,000 crore to part fund its expansion in the projects it has in Delhi, Mumbai, Hyderabad and a few other locations.
REEL’s IPO is the nation’s first initial share sale to finance a power plant fuelled by urban refuse. Under the ISWM, the private agency selected will take on the entire chain of collection, transportation, processing and disposal of garbage. It will provide land and take a tipping fee per each tonne of garbage disposed.
The amount required for creation of the infrastructure for disposal of the solid waste is estimated at Rs 182 crore. The GVMC called for tenders, REEL quoted the lowest of all the other firms, `1,685 per tonne of garbage handled. Others quoted Rs 2,000 and Rs 1,730 per tonne. The last GVMC council resolution in February 2012 said that the private firm was supposed to utilise the services of around 5,033 of the outsourced staff that are involved in garbage handling, which is done by the sanitary wing.
But as per the fresh proposals, workers fear that REEL was ready to hire and bear the expenses of only 2,033 staff members and the expenses of the remaining 3,000 staff members are to be borne by the GVMC, which will involve an additional burden of `36 crore per year to the civic authority besides the extra amount being paid to REEL, which is more than the present actual cost of handling a tonne of garbage.
“We wonder why GVMC is favouring Ramky when the same activity can be taken up by the authorities themselves at the much lower cost at which it is being done now. GVMC, which is already cash-starved, will lose a few crores due to the project,” GVMC Employees and Workers Recognised union, honorary president G. Ananda Rao told this correspondent.