Chief Minister Lim Guan Eng said the state has managed to do away with a "crony project”, under which people were being charged too much without gaining any benefit.
"The state conducted consultations with the company managing the waste when the contract ended in July 2009," Lim (right) said at a ceremony today to sign the contract.
"(We have) managed to reduce the cost (by) as much as RM11.2 million yearly or (by) 42.4 percent (over) three years.”
Lim said the two local councils (Penang and Seberang Perai) have saved RM33.5 million in this area, proving once again the effectiveness of the state’s CAT (competency, accountability and transparency) policy.
The change in concessionaire was made possible by Penang withdrawing from the solid waste management privatisation scheme under Act 672, and deciding to carry out the job through the local councils’ own mechanism.
Meanwhile, Lim said that the management cost for solid waste since 2001 was about RM500 million, when prices were much lower then.
"With the new contract, the cost is about RM300 (million), even when prices are much higher now. We are able to save at least RM200 million. That is the beauty of open tender. It helps you to save money".
State executive councillor Chow Kon Yeow said PLB Terang had been selected from 13 companies that had bid for the project.
Of the 13 who had put in a bid via a ‘request for proposal’ (RFP), five were shortlisted.
"The RFP was closed last August, after being opened for a month for applications," said Chow (left).
"To ensure transparency and good governance, and to ensure a culture of integrity in government administration, all applicants were required to sign an integrity pact.”
When asked, Chow said facilities and the requirements in the new contract signed with PLB Terang are able to meet the project's challenges for the next 20 years.
The landfill capacity, he added, will be extended to about 20 years or more.
He further dismissed the possibility of incinerators being built for at least 30 years, saying, “Let the new state exco in the next government (30 years later) think of that".