State explores feasibility of selling or leasing Central Landfill

Mike Stanton

Nov. 3, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Attention, members of the waste-management (NYSE:WM) industry: has Rhode Island got a dump for you!

The state began soliciting proposals on Monday to explore the feasibility of leasing or selling the Rhode Island Resource Recovery Corporation, which runs the state's Central Landfill in Johnston and Rhode Island's recycling operations.

"These are difficult economic times, but the waste-management market is very lucrative," said Amy Kempe, Governor Carcieri's spokeswoman. "There could be an opportunity with a private owner or operator that could be beneficial to the taxpayers."

Michael O'Connell, the executive director of Resource Recovery since 2007, said that it makes sense to explore getting government out of the business of running a landfill, especially if a deal with a private operator could help bring much needed revenue to Rhode Island's strapped budget.

"Let's see what it's worth," said O'Connell. "In rough economic times, it makes sense to put it out there. The governor and I are both private enterprise kind of guys. We're just a landfill. Why is government so involved? It makes sense to take a look at going private, as many states have done."

With declining trash collections tied to the slumping economy, Resource Recovery's revenues have fallen from $70 million to $45 million in the fiscal year that ended last June. O'Connell cited competition from trash incinerators in Massachusetts and Connecticut as a factor, but noted that that also will help extend the life of the landfill.

O'Connell has been credited with cleaning up a scandal-plagued agency, including pushing for an audit commissioned by Governor Carcieri that found that past leaders had squandered $75 million through flawed construction projects, questionable land deals, cronyism, suspected fraud, apparent bid-rigging, bogus workers' compensation claims and phony overtime scams.

On Monday, Rhode Island purchasing officials posted a "request for information" on the Web site, seeking proposals "on the feasibility of leasing or selling some or all of the Rhode Island Resource Recovery operations or assets."

"Given the current difficult economic circumstances and resultant price competition in the R.I. regional solid-waste market," the request says, "the state believes there may be an opportunity for private ownership/operation that could capture some of the potential synergies across the entire waste-collection/disposal market."

While Resource Recovery's government-mandated mission is limited to waste disposal, the request notes, a private owner/operator could be better positioned to operate more profitably in all aspects of waste management.

Kempe noted that any deal could be a straight sale, or a lease arrangement that guarantees a steady flow of revenue to the state, or some combination. Proposals, due on Dec. 2, would be vetted by Carcieri's director of administration, Gary Sasse; O'Connell, and state budget and purchasing officials.

Because it is just a request for information, and no contract will be awarded, the request states that responses will not be made public.

As a quasi-public agency, O'Connell noted, Resource Recovery does not operate to squeeze maximum profits out of cities and towns that pay to dump their trash in Johnston. Kempe cautioned that the impact of any landfill privatization on rate-payers would be part of the evaluation process.

Many states have looked into privatizing assets in recent years to address budget woes, such as Ohio's decision to lease roads. In Rhode Island, financial companies have approached the state about buying or leasing the Pell and Mount Hope bridges in recent years.

Earlier this year, the state sought proposals for possible "public/private partnerships" involving state parks, such as the Jerusalem marina and Salty Acres in Narragansett, Beach Pond in Exeter, World War II State Park in Woonsocket, Goddard Memorial State Park Golf Course in Warwick. Those proposals, said Kempe, are still under review.

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