The ACCC has decided to authorise the Gippsland Waste and Resource Recovery Group (GWRRG) and 6 councils located in Gippsland, Victoria, to jointly tender, procure and manage residual waste services. The councils are likely to sign individual contracts with the successful tenderer/s but are also seeking authorisation to jointly manage their contracts with the supplier(s) as they may wish to engage in some joint management activities. Waste service suppliers will be able to tender to supply each council and/or groups of councils (Proposed Conduct).
Waste service suppliers will be able to tender to supply each council and/or groups of councils. The councils are likely to sign individual contracts with the successful tenderer/s but they may also engage in joint management activities in relation to the contracts with the waste service supplier(s).
The 6 councils are: Bass Coast Shire Council, Baw Baw Shire Council, East Gippsland Shire Council, Latrobe City Council, South Gippsland Shire Council and Wellington Shire Council.
The ACCC considers the joint tendering, procurement and management of domestic waste collection and transportation services is likely to result in public benefits in the form of providing greater long term certainty for councils and potential waste service suppliers; increased competition for service contracts with more joint tender participants than would be the case if councils sought tenders on an individual basis; transaction cost savings; and environmental.
The ACCC considers that the conduct is likely to result in limited public detriment. Councils will independently decide whether it is in their best interests to procure domestic waste collection and transportation services through the joint tender process, or through individual negotiations with a supplier. All potential service providers will continue to have opportunities to compete to supply some or all of the participating councils.
In recognition of the long-term contracts the participating councils expect to enter following the tender process, the ACCC proposes to grant authorisation for 11 years.
The ACCC has also granted interim authorisation to enable the participating councils to commence the tender process while the ACCC is considering the substantive application. Interim authorisation does not extend to the councils selecting or entering into contracts with recycling processing service suppliers.
Further information about the ACCC’s interim authorisation and draft determination is available on the ACCC public register at: Gippsland Waste and Resource Recovery Group & Ors.