A specific case of a cost benchmarking exercise has been carried out by a network of municipalities and local authorities in Germany, called ForumZ, which promotes the inter-municipal cooperation in the field of waste management (www.forumz.de).
In order to collect data from the different municipalities included in the network, a questionnaire for data collection was developed by a working group comprising waste management experts from the different municipalities (counties and cities). Not only technical information is required to optimise waste management but also systematic and robust data on costs. The questionnaire was developed in a practice-oriented way in order to create helpful benchmarks.
Figure 1 shows an example for the evaluation of the main cost categories for 33 counties and 11 cities in Germany (ia GmbH, 2015).
Figure 1. Specific waste management costs for the main cost categories for 2013 of 33 counties and 11 cities in Germany providing waste management services to 6.3 million citizens in total, based on ia GmbH (2015)
The corresponding annual waste quantities per capita are illustrated in Figure 2.
Figure 2. Total specific waste quantities of the participating 33 counties and 11 cities in Germany from 2008 to 2013, based on ia GmbH (2015)
As the cost benchmarking in ForumZ has been carried out six times so far (status: April 2015), increases and decreases in costs can be indicated as illustrated in Figure 3.
Figure 3. Increases and decreases in uncovered costs in 33 counties and 11 cities in Germany from 2008 to 2013, based on ia GmbH (2015)
While developing the questionnaire, the working group decided that, based on the annual data collection and responses from the participating municipalities, the questionnaire may be (slightly) adapted year to year.
In the case of ForumZ, the data collection also comprises information on whether the services are carried out by private waste management companies on behalf of the municipality, by the municipality itself, or by municipalities providing services for another municipality. The collection of these data allowed ForumZ to also investigate whether the uncovered costs depend on the percentage of private services. Figure 4 shows that uncovered costs do not depend on the percentage of private services carrying out waste management.
Figure 4. Uncovered costs and percentage of services provided by private companies in 33 counties and 11 cities in Germany in 2010–2013, based on ia GmbH (2015)
Municipalities taking part in the cost benchmarking exercise performed by the independent third-party organisation ForumZ (presented in the Operational data section) pay an annual fee to ForumZ which organises the collection and evaluation of cost data. This fee is in the range of EUR 1 000 and EUR 4 000 per year, depending on the size of the municipality.
According to Figure 1, waste management costs of different cities, counties or municipalities vary by up to a factor of 3. For individual services, the range can be bigger, e.g. up to a factor of 8 for waste collection. For instance, in 2013, the cost for waste collection with biowaste bins, paper bins and recycling stations in all municipalities for all citizens varied between EUR 17 and EUR 76 per capita per year. If the costs for the waste management of a region, e.g. a county, with 200 000 citizens at the upper end of the range can be reduced by only EUR 5 EUR per capita per year thanks to cost benchmarking and the improvement of the waste management system, the total cost savings in that region could reach EUR 1 million per year. This can be achieved by cost benchmarking for which the expenditure as a network member is EUR 0.02–3 per capita per year.
Note: All the mentioned values above are presented as median, minimum, maximum and 25th/75th percentiles as indicated in the figure above.