More than 100 local governments nationwide were thrown into crisis mode this week after the garbage collection company they were all using filed for bankruptcy. The “stinky situation,” as one newspaper editorialized, renewed concerns over how garbage collection has increasingly been outsourced to private players over the years.
The city of Oslo fell victim last year to the financial woes of the company that won the contract to collect its garbarge. Now another firm with operations in four Nordic countries, RenoNorden, has filed for bankruptcy because it had priced its services too low in the contracts it won from 133 municipalities around Norway. Alleged miscalculations left the company with contracts that generated losses instead of profits.
The local governments that entered into the contracts were also facing criticism on Thursday, for having accepted terms said to be suspiciously low. “The municipalities must not be blinded by the lowest possible price,” newspaper Dagsavisen editorialized on Thursday. It railed against the trend towards privatization of one of the most essential public services.
“There are hardly any local governments that handle their own garbage collection with public sector employees anymore,” Svein Kamfjord of KS Bedrift Avfall, which represents local governments on garbage collection issues, told newspaper Dagens Næringsliv (DN). “Now it’s almost all contracted out, often with various local governments teaming up on a contract.”
That’s what left towns and cities like Gjøvik and Drammen and many much smaller scrambling to find alternative garbage collection services before trash started piling up in their communities. The Labour, Socialist Left and Reds parties all claimed that Norwegian municipalities should handle their garbage themselves and drop private contractors.
RenoNorden apologized for its financial difficulties, acknowledging that they had “great consequences” in Norway. The company’s 30 contracts with groups of municipalities around the country affect garbage collection for around 1.2 million people, and RenoNorden lamented that its roughly 500 employees in Norway would also be affected.
“RenoNorden strongly apologizes for the problems that employees, customers, households and others affected will incur as a result of the bankruptcy,” it wrote on its own website. RenoNorden’s operations in Sweden, Denmark and Finland were unaffected.