The performance of private partners in the waste sector

Private sector participation has proliferated uncontrollably throughout the world, often without devising the proper regulatory structures. This practice has special relevance in refuse collection services. Currently, there are some doubts about their actual benefits for the sector. In this article, the effects of private sector participation in the Portuguese waste sector are evaluated, including both ‘retail’ (refuse collection) and ‘wholesale’ (waste treatment) markets. The data were collected from 228 utilities, including 32 regional entities responsible for waste treatment and 196 local entities in charge of refuse collection. The results are based on a productivity analysis of waste treatment utilities (using Törnqvist and Malmquist productivity indexes to compute the total factor productivity), and on an efficiency analysis of refuse collection utilities (using traditional and robust non-parametric techniques). While in the ‘wholesale’ market the findings support the idea that benefits are ephemeral, in the ‘retail’ market private sector participation seems to increase the overall efficiency of the units. ► We evaluate the influence of private sector in different waste markets (collection and disposal). ► We compare the performance of short-term and long-term contracts. ► The results draw on an original and comprehensive data base. ► We use different methods of efficiency and productivity analysis. ► The results are very representative of the incentives provided through a short-term and a long-term contract.