The State of the Federated States
Profitable Trash
Privatized Waste Management Works For Pohnpei
In the Micronesian area—the Marshall Islands, Federated States of Micronesia and Palau—there are two seemingly unrelated problems. There are huge waste management challenges, which on several islands are literally out of control, with garbage spewing out onto main roads and causing a variety of pollution hazards. There is also the fact that the governments in these islands have talked for years about support for the private sector, and specifically for privatizing government services that could be more efficiently run by businesses. It’s mostly been lip service, with few substantive actions on the privatization front.
In 1997, Pohnpei State in the FSM took innovative action by hiring a private contractor to solve its severe garbage problem. Now, with five years experience in garbage collection and dump organization, Pohnpei Waste Management Services is branching out to Palau and is considering an operation in Yap.
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In 1997—and for some years prior—it wasn’t unusual to see garbage spilling out onto the main road from the Pohnpei dump just outside the international airport. “Before 1997, a trip to the dump was hazardous,” says Robert Spegal, one of the owners of Pohnpei Waste Management Services (PWMS). “You’d be in muck up to your knees when you got out of your car. And more days than not you couldn’t get into the dump, because garbage was overflowing on the road.” It was not pleasant, he adds, to be a dump user or a visitor to Pohnpei, because there was no avoiding the sight and odor of a dump so close to the airport.
Spegal and his wife, Maria, Tim and Erine McVey and Dr. Jan Prior came together with a plan to launch a garbage collection operation in the Kolonia/Palikir urban area of Pohnpei. At the same time that the garbage collection plan was coming together, Pohnpei State officials were keen to privatize the dump, and Spegal says it made sense to put the two together.
“We started collections with an old Mazda pickup truck, trash cans and muscle,” Spegal says. They did a market survey of potential customers, including such government agencies as the FSM national government and the College of Micronesia at Palikir. PWMS showed that it could save its customers considerable money by handling garbage collection, and contracts began to develop. “Once we had a few customers to prove it worked, we applied for a $130,000 Bank of FSM loan,” Spegal says. That loan bought 40 dumpsters, a bulldozer for the dump and two garbage collection trucks with front-loading forks to empty the dumpsters.
PWMS now has about 60 garbage collection customers, the majority of which are government agencies and businesses. Instead of importing dumpsters, the company now manufactures its own.
For residents of Pohnpei and neighboring islands used to just flinging their rubbish over the fence or into a roadside pile and driving off, the transformation of the Pohnpei landfill has been nothing short of startling. Previously, the Pohnpei dump—like those on most islands—was not managed. PWMS did four things when it took over in 1997. It created a compacted driveway loop, so customers could easily get in and out of the dumpsite. It fenced off the outside and cleaned the area just in front of the dump on a daily basis until people stopped tossing rubbish at the gates. Perhaps most importantly, PWMS staff was at the site from 8 a.m. until 7 p.m. to control the flow and location of dumping. To handle overnight garbage disposal when the dump was closed, several dumpsters were located just inside the fence, with road access, so that residents can still discard their rubbish without it becoming an eyesore on the main road. Pohnpei State started out by funding PWMS with $100,000 annually. After two years, says Spegal, PWMS calculated it could do it for $85,000 a year, so that’s the level of subsidy now.
Covering the garbage to reduce smells, flies and rodents has been a considerable challenge, because it usually costs thousands of dollars annually to buy the dirt and fill material needed. However, PWMS has managed to keep the garbage covered, and it shows in the lack of odor and the minimal fly population at the dump.
Pius Yaropiy, a Yapese who graduated from the Pohnpei Agriculture and Trade School, supervises day-to-day PWMS operations. Eleven people are now working with the company in garbage collections and dump management. “We provide employment and never miss a payday,” Spegal says.
The company is working with partners in Palau to launch a similar waste management service in Koror. It is also taking a look at opportunities in Yap, and has been approached by officials in Majuro, Spegal says.
The company paid off its bank loan six months early, and is now earning a modest profit, while saving the government both money and the headache of managing an industry that most island governments tend to ignore until they’re in crisis.
Does privatization work? In most islands it’s hard to say, because little or nothing is privatized. In Pohnpei, the government-PWMS partnership is not only working, it’s giving Pohnpei’s neighbors a good model for how to handle waste on small islands.
