Revenue management and pricing: Cost-Based Tariff waste management – City of Ekurhuleni

Problem

The project was aimed at measuring the actual cost of rendering the waste management service with the view to use the cost to determine a cost-based tariff to be implemented by the municipality.

The scope of the project also included comparing the cost of rendering the service between the municipality and the private contractors rendering the same service on behalf of the Metro in selected areas.

Finally, the study also analysed areas of inefficiencies and make recommendations of on the improvement of the operations.

Ntiyiso Solution

As part of a solution, Ntiyiso Consulting developed a computerized model which, based in key inputs and processing rules, calculated the costs and the tariff as well as provide a reporting platform.

In developing such model, we analysed the service itself in terms of the processes (i.e. collection of waste, compacting, land-filling etc.) This was done for various service types, e.g. residential, bulk containers, small business etc.).

We also performed an analysis of the organisational structure, responsibilities (to determine who in the organisation is part of the waste management service), budget votes, cost allocation and salary scales amongst other things.

From the above analysis we were able to formulate a costing structure.

Back to top of page