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Garbage deal heralds taxes on collections

Garbage deal heralds taxes on collections

P

HNOM Penh Muncipality has signed a 25-year concession contract with the French

company Asia Pacific Development (APD) which is intended to revolutionize

garbage collection in the city. But it could mean hefty charges for residents

and businesses.

City authorities are to impose a "rubbish" tax on all

households and businesses to pay ADP to run the new service which is to begin on

June 2.

Rates for the new tax have yet to be decided but ADP has

proposed either a flat charge of around $28 per month per household and $120 per

month for larger businesses, or it may charge according to volume of rubbish.

Sam Samuth, deputy director of the Municipality's City Cleaning Service,

which is currently responsible for garbage collection admits the company's

proposed charges are expensive but said: "The rates are still open for

discussion."

Samuth admitted the Municipality may have been hasty in

signing the contract with APD without agreeing on charges.

A copy of the

contract obtained by the Post says: "Both sides [APD and the Municipality] will

study the level of tax needed, it will depend on how much the company has to

spend to keep the city clean. They will calculate a reasonable price."

The Municipality is to assist the company in the collection of the tax

and will impose fines on non-payers, Samth said.

He added his

department's 690 employees will be transferred to ADP.

Previously rubbish

collection was free but notoriously bad due to lack of government funds, with

many areas of the city blighted by piles of uncollected trash.

Some more

conscientious companies in the city have been donating 1,500,000 to 2,000,000

riel per month towards the cost of garbage collection.

Under the contract

ADP will pay the city $55,000 in the first five years for the concession. The

amount will increase by 10 percent over each subsequent five years during the

25-year term. All revenues from the rubbish tax will go to the

company.

ADP representative Yannick Mache is due to arrive in Phnom Penh

today (May 20) to begin work on setting up the new service and negotiate with

the municipality to fix the charges.

The company plans to invest $20

million and is to import new garbage trucks and other equipment.

Samuth

said that the signing of the contract had been a big relief for cash-strapped

city authorities. Of 30 plus garbage trucks only 15 were servicable, he said,

while the city was spending $6,000 a month to hire additional trucks to tote

rubbish to the dump at Stung Meanchey.

He added: "To have a French

company sign this contract is a good prospect for us to relieve both pollution

and financial problems."

Samuth admitted the city was in such desperate

financial straits that it was sometimes unable to pay its workers their daily

pay rates of 1,500 riel.

Keo Savin, director of the Municipality's Public

Works and Transport Department expressed fears that ADP might withdraw from the

contract as other companies who have signed deals with the city in the past have

done.

He said: "If the contract is broken, the Municipality would face

serious financial difficulty over the next few months."

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