Nov 10, 2009 (LBO) – In the bad old days, when Sri Lanka Telecom/Department of Telecommunications was the sole supplier/regulator/policy maker, one had to make payments up and down the system to get a phone and then to keep the phone working.
Some major companies in Colombo, who could not afford to be disconnected, put the lineman on retainer. That is, he was not paid on the basis of the number of repairs, but was given a fixed payment every month (and a bonus at year end).
If he was paid on a per-repair basis, it was felt, he would have incentive to artificially create problems and then solve them for payment: classic extortion.
The whole thing was, of course, unethical and possibly illegal. The Sri Lanka Telecom functionaries were paid good government salaries and pensions and were not supposed to take payments on the side for doing what they were paid to do in the first place. I report it because it showed a good understanding of incentives by the victim companies. And because it shows that service delivery can be improved through the proper reforms.
We no longer have to face these problems in telecom, because the sector has been liberalized. But there are other services supplied by unreformed government-owned monopolies and funded through taxation (e.g., waste disposal, policing) and fees (e.g., water, electricity), where the incentives are out of whack.
For several days garbage had not been collected from the apartment block we live in. A supervisor had dropped in and mentioned the many difficulties faced by the workers which could be alleviated by a 2000 rupee-a-month donation. That means just 143-rupees-a-month per unit. No receipts could be issued.
Should we pay? Is there a danger that the kappam takers will get greedy and up the amount whenever they feel like it? Would this be in addition to the festival-donation lists that we have willingly contributed to over the years, or an all-inclusive service package? If we give in, will we be reproducing the institution of bribery that we so often decry?
I believe we should not. But I also believe we should pay more for garbage disposal and that the underpaid workers should get more of what we pay.
The solution lies in replacing the current, broken funding mechanism that is yielding unhappy workers who have to drink themselves to oblivion, garbage mountains and bad garbage disposal practices among ratepayers. The alternative must create the correct incentives for all parties along the garbage value chain, including ratepayers and garbage workers. It should also reduce garbage volume, make recycling easier, and thereby ease the pressure on the waste-disposal sites.
Today, we pay for waste disposal through taxes (and festival santhosams). There is no relationship between what we pay as taxes and the amount of garbage we produce. Wastrels are subsidized by those who recycle and compost.
The workers are on salary, which is independent of how much work they do. The supervisor/ “protection racketeer” is trying to introduce user fees that would benefit all levels of garbage personnel at the Colombo Municipal Council; but without creating good incentives and of course with no reduction in the taxes we pay.
Why do we not switch to better designed user fees? The protection-fee racket is evidence that, underneath it all, the best method is one in which people pay for services directly to the people who provide them, based on the quantity and quality of services provided.
Here is how a better system could work. All ratepayers would have to purchase payment vouchers (stickers) and affix them to the containers with their garbage, based on an announced formula: one for dry garbage of a certain size, two for a container of a specific size containing wet garbage (i.e., food waste), and none for properly sorted clean recyclables.
The more garbage you put out, the less sorting you have done, the more you would have to pay. If on the other hand you sort your garbage, make compost, etc. you would pay less: incentives would exist for good behaviour and against bad.
Garbage handlers would benefit because they no longer have to handle really dirty stuff unsorted and out of containers. The scheme does not necessarily have to be based on the workers getting a cut of the user fees, but it would help if they do, especially in our conditions.
Every time a proposal is made for doing things differently, there are a whole lot of people who will tell them why it cannot be done. I will save them the bother and do their job myself. And write the response too.
How it can be made to work
Naysayer: The ratepayers and the garbage workers will collude; garbage will be taken without vouchers.
Yes, if we do not give the full value of the voucher to the garbage crew, they will have incentive to take cash payments (less than the share of the voucher) instead. There are two solutions:
1. Simplest is to give the full value of the voucher to the crew. They get paid a base salary (hopefully lower than now) plus performance payments based on how many vouchers are encashed.
2. A portion of the voucher value is given to the crew, but they have to “pay” when they hand over the garbage to the next level of processing. If they do not have value corresponding to volume, the difference will be deducted from their paychecks.
Naysayer: This solution will then lead to garbage workers refusing to collect garbage without vouchers attached to them. Stingy citizens will dump garbage in vacant lots which will not be collected, which will lead to unsanitary conditions, rats, the bubonic plague,. . . . .
There is a solution to that problem: Create a mechanism to report garbage dumping (hotline plus rewards) and levy heavy penalties on those who dump. A separate detail of garbage collectors to intervene in such situations would have to be created, and proper incentives designed. But neighborhoods must suffer for some time until the garbage in cleared.
Naysayer: The truly stingy will dump their garbage a long distance away, far away from their own neighborhoods and possibly in adjacent municipalities. Here, collective punishment and surveillance will not work.
Only solution is to have all municipalities in Greater Colombo (or Greater Kandy, . . . ) adopt user fees simultaneously.
Naysayer: Poor people cannot afford vouchers.
True. But then it’s not that there is daily garbage pick up in the places that need it the most even today, the tenement gardens of Colombo.
Solution is to give them vouchers, paid for out of general revenues. Ideally, a less than adequate number of vouchers will be given, creating incentives for lots of sorting, composting etc.
Naysayer: The free vouchers will be resold. The poor will continue to live in squalor.
Color-code the vouchers by garbage districts. Alternatively, get a life.
Naysayer: The scheme is unworkable because the citizens do not use standard containers, while the proposal rests on the use of standard-size containers.
Give or compel people to buy standard containers with lids. Handling loose garbage is not something humans should do in the 21st Century.
Naysayer: Using containers with lids will result in dogs going hungry.
You bring the hungry dogs into your house and feed them.
Naysayer: The vouchers affixed to the containers will be stolen.
This can happen anywhere user-fees are charged, but the danger will be greater here, because we are dealing with higher levels of poverty and lower levels of citizenship.
A little tough to solve. But even today garbage pickup in Sri Lanka is not the impersonal transaction it is in the US and places like that. Here, people run out of the kitchen to hand over the garbage. So they will have to hand over the vouchers in the new scheme. If they risk affixing the voucher and leaving containers unattended, that will be their problem.
There is an electronic solution to the problem that can be tried. Instead of vouchers that can be stolen, the payment will be from the citizen’s mobile to the garbage handler’s mobile. If the householder is away from the home on a particular day, he/she can make the payment from afar, while the garbage is kept unattended outside the house.
I say we should not pay protection money. Instead, we should use this newest bad behaviour from the CMC to agitate for user-fees, the only long-term solution to garbage disposal. And if the protection-racketeers do not collect our garbage for days on end, we should find alternative methods and stop paying rates.
If we pay kappam, we will have no one to blame other than ourselves for rampant corruption. Garbage in; garbage out.
Rohan Samarajiva heads LirneAsia, a regional think tank. He was also a former telecoms regulator in Sri Lanka. To read previous columns go to the main navigation panel and click on ‘Choices’ category.