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Baranjska and Beli Manastir public communal enterprise

From Municipal Cooperation

Baranjska and Beli Manastir public communal enterprise
Service Areas: Solid Waste Management
Country: Croatia
Municipalities: Beli Manastir, Bilje, Čeminac, Darda, Draž, Jagodnjak, Kneževi Vinogradi, Petlovac, Popovac
Contact persons: Vjekoslav Perišin
Legal form: Commercial company
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Coordinates: 45° 37' 41" N, 18° 41' 17" E

Description of the problem/need for IMC

The joint public communal enterprise (PCE) Baranjska Cleanliness and Waste Disposal Services, Beli Manastir was established in order to provide collection and communal waste disposal services for the population of all the municipalities in Baranja Micro-Region, which consists of one town and eight communes. In addition to problems in the reorganization of service delivery due to the territorial reorganization of former municipalities, the municipalities in Baranja Micro-Region were under occupation in 1991–1995, during which the communal system collapsed and the communal service provider became bankrupt.

Description of the IMC practice

The joint PCE Baranjska Cleanliness and Waste Disposal Services, Beli Manastir provides collection, transport and processing of municipal waste to over 40,000 inhabitants in an area of over 1,200 km2. It has a total of 28 employees, and is the 13th largest company on the territory of Baranja Micro-Region.

BaranjskaCleanliness and Waste Disposal Services, Beli Manastir is public trade company, established on the basis of a contract between nine municipalities (Beli Manastir, Bilje, Čeminac, Darda, Draž, Jagodnjak, Kneževi Vinogradi, Petlovac and Popovac).

The largest number of shares in the ownership structure belongs to Beli Manastir (75.07 percent), and Darda (17.93 percent); the rest of the ownership is equally shared among other municipalities (1.00 percent of shares belong to each municipality). The larger number of the shares of Beli Manastir and Darda is due to their increased share in the financing of the company.

Municipality / County
No. of shares (%)
Beli Manastir
75.07
Bilje
1.00
Čeminac
1.00
Darda
17.93
Draž
1.00
Jagodnjak
1.00
Kneževi Vinogradi
1.00
Petlovac
1.00
Popovac
1.00
TOTAL

The main bodies of the company are the Assembly (Skupština), the Supervisory Board (Nadzorni odbor) and the Managing Body (Uprava društva), represented by the Director.

The Assembly consists of the representatives of all the municipalities. It meets at least once a year and is responsible for passing of the Statute and other internal regulations, approving annual reports, plans and programmes, and appointing the Director of the company. The Assembly decides by majority vote (the number of votes is equivalent to the number of shares of the municipalities in the company; however, in practice the decisions are made by consensus).

The Supervisory Board oversees the company’s business operations and managerial procedures. It consists of representatives of all municipalities, and meets five to six times a year.

The Managing Body of the company is represented by the Director, who is appointed for a four-year mandate, on the basis of a public competition. The Director is responsible for the management and legal representation of the company.

The reports, annual plans, and budgets need to be approved by representative bodies of all municipalities, as well as any proposal for increases in service costs.

Establishment of the IMC practice

PCE BaranjskaCleanliness and Waste Disposal Services, Beli Manastir was established in 2005 as a replacement for PCE Komus, which provided waste management, drinking water supply and sewage services for the territory of the former Beli Manastir Municipality until 1991. In 1991, the territory of Beli Manastir Municipality was occupied and the territorial reorganization of the municipality could not be carried out; in other non-occupied parts of Croatia, the territorial reorganization was implemented in 1993. In 1991–1995, Komus provided the communal services to citizens who remained on the occupied territory of Beli Manastir.

In 1995, the occupied territory was peacefully reintegrated into the Croatian legal and political system, and the territorial reorganization could be implemented. On the territory of the former Beli Manastir Municipality, nine new municipalities were formed. As far as the previous PCE Komus is concerned, most of its communal infrastructure was outdated or devastated, and the company became bankrupt. The liquidation of Komus started in 2003 and was completed in 2007. In the meantime, the provision of waste management services for the entire territory of former Beli Manastir Municipality was taken over by the communal department of the Čeminac Municipality on the basis of concession contracts. However, this was not a satisfactory solution, especially since the waste dump in Beli Manastir had reached capacity and needed reconstruction. Therefore, on the joint initiative of Beli Manastir, Darda and Čeminac Municipalities, a new communal enterprise for waste management was established. According to the agreement, the largest share of the new company belonged to Beli Manastir, which assumed responsibility – with the financial support of Ministry of Environmental Protection, Physical Planning and Construction – for the recovery and reconstruction of the waste dump and its reassignment to waste separation and the recycling station. (All the communal waste from the territory of nine municipalities would be disposed at the regional waste disposal, built in accordance with EU regulations.) The second largest share of the company belongs to municipality Darda, which contributed the equipment and machines, donated by two EU municipalities (Woensdrecht from the Netherlands, and Stabroek from Belgium).

Benefits and shortcoming of the IMC practice

Compared to other municipalities in Croatia, the municipalities of Baranja Micro-Region faced additional difficulties in the establishment of effective waste management. The territory of the former Beli Manastir Municipality was occupied and territorial reorganization could not be implemented. It took almost ten years to establish an efficient waste management system, which is now fully self-sustainable. Baranjska čistoća is financed through communal fees (in Croatian currency), and is a profitable company. Larger communal infrastructure projects, such as the reconstruction of the city waste dump, are co-financed at the regional (county) and central state level. Overall, the citizens are satisfied with the quality and price of the provided services. There is almost no political influence in company operations. It must be noted that Baranga is a multicultural micro-region, which was very much affected by the war and occupation.

Future plans for the development of the IMC practice

The possibilities for further expansion of the IMC practice to neighbouring municipalities are limited, because similar models of IMC in waste management provision have already been introduced and widely applied in other Croatian municipalities. It should be pointed out that the water supply and sewage provision is organized in a similar way, through the joint PCE Baranjski vodovod. As far as other less expensive, communal services are concerned (such as maintenance of cleanliness of public spaces, maintenance of green areas, funeral services, chimney cleaning services, etc.), municipalities prefer to organize their own services.

Main lessons learned on how to establish IMC and make it a success

Preliminary research on IMC in Croatia has identified a total of 29 joint communal enterprises providing various communal services for a total of 38 towns and 153 communes, but there are probably more similar cases. The establishment of IMC practices on such a large scale primarily depended on the legal framework, i.e. the Law on Communal Management, which prescribed the obligation of the municipalities to resolve the ownership issues after the establishment of new municipalities.

Although not particularly innovative, and basically externally driven, IMC in joint delivery of communal services proved to be an efficient way to keep the communal services organized in newly formed small municipalities surrounding the central town. The main factors in the success of the IMC in the Baranja regional municipalities were the enabling legal framework, financial support of the central state bodies and awareness of the municipalities that the most rational solution to service provision is the reorganization of PCEs (i.e. outsourcing, establishment of their own PCEs or buying services from communal companies owned by neighbouring municipalities).

Readiness to support other municipalities to establish IMC

The representatives of the PCE are willing to share their experiences by participating in information events to promote their practice and providing professional support and advice whenever necessary.

Acknowledgment

The information about this practice was collected and presented by Marco Kovacic.