the law should be amended, private individuals buying bottles cheaper have already appeared

How can the first year of the new concession system, i.e. the appearance of Mohu, be evaluated from the point of view of municipal waste transporters?

When Mol, which won the 35-year waste management concession two years ago, created Mohu to manage the activity, after a request for proposals, a “regional coordinator” was appointed, with whom they agreed on the service fee. The 170-180 billion forints received from the state-owned NHKV National Waste Management Coordinating and Managing Company Zrt., which was established in 2016 and popularly known as a trash holding company, proved to be insufficient for the basic tasks of the public service. Mohu probably gives more than that. I estimate the increase for the fractional year of 2023 and the full year of 2024 to be 10-25 percent. The basic operating conditions are currently given. The question is what the negotiations for 2025 will bring, for example, in connection with the asset improvements promised by Mohu, such as the replacement of the vehicle fleet. The dialogue is continuous.

How do you see the period before that?

For the public service, the population still pays the fee determined in 2013 – the one in April 2012, but essentially frozen at the 2010 level. The annual flow of a maximum of one hundred billion forints is far from enough to fulfill even the most basic tasks related to municipal solid waste. In addition, with the fee freeze, huge differences have been perpetuated at the national level. There are places where the monthly fee is HUF 1,000, while in other places it is a multiple of that. Those settlements that previously did not allow fees to go up have been frozen, while those where prices were allowed to rise are still higher than the others. But even that is very modest. An annual fee of, say, 40,000 euros does not even reach a hundred euros. In Germany, there is no level below 300 euros, but it is usually more like 400-500 euros. That’s the cost. Due to extremely low fee revenues, after 2013, in order to maintain the public service, the Hungarian state provided ever-increasing budget support to NHKV, which was established in 2016 to collect and redistribute fees. According to my knowledge, this amounted to around 70 billion in the last full year of 2022. Kukaholding paid little money to the public service providers – even to the Fővárosi Közterület-fenntráto Zrt., which I managed at the time – but we could only have ethical reservations against this.

However, the Green Bridge in Gödöllő, which was essentially bled out, also found legal objections.

The case of Zöld Híd is a medical horse, where every possible problem has occurred. The new financial system introduced in 2013 did not manage, for example, the operating costs of the EU waste asset developments that were awarded before it. But the same can be said, for example, about selective collection at home at FKF, which received EU support before 2013 and was introduced in 2014-2015. This would have required a fee increase in 2016, which was prevented by the new overhead system.

Even now, the selective bins of the citizens of the capital are being emptied at home.

Yes, because we can no longer withdraw residential services or discounts that have already been introduced. Although I myself did not experience the activity of the bin holding as a success story, NHKV’s national approach eliminated the unnecessary overlapping of regional developments. But when it seemed that all this was completely unsustainable, the idea of ​​a concession came up.

In whom?

– I don’t know, but it is a fact that Mol’s chemical branch requires more and more plastic waste. Although the tender ensures this, the concession company is expected, “in return”, to manage almost the entire solid waste sector and fulfill the EU goals. According to these, Mol considered the conditions acceptable.

And did it work?

The virtue of Mohu is that, in addition to the usable materials, it also receives EPR income from the manufacturers and distributors of recycled products. Of this, he earns about 240 billion a year. This is much more than the so-called product fee, which was previously levied under a similar legal title, of which 80 billion flowed into the state coffers and was not even used for recycling. I hear voices of concern, because in the West, concession rights are granted at the city or provincial level rather than at the national level. The multinationals that had settled here, such as Saubermacher, Remondis or RWE, were sent away from Hungary, right, a decade ago. They used to compete for one area each. With the fact that Mol won a national concession, the possibility of competition essentially ended. But I can’t form a definitive opinion on its effectiveness. There are both warning and encouraging signs, but you have yet to mature.

What is stopping Mohu from creating the possible additional demand of the sectors by further raising the EPR fees? At the time of the introduction of the EPR items last year, the manufacturers-distributors indicated that they are often several times the price of the product in Western Europe and that the move will noticeably increase inflation.

It should be noted that the price of a product includes the collection, pretreatment and recycling of the waste generated from it. Regarding municipal solid waste, the EU goal is at least 65 percent recycling and no more than 10 percent landfilling. It is true, I see that the Hungarian government successfully negotiated a 5-year postponement of the original 2030 target date in Brussels. With us, the final decision is still the deposition. But there is also the question of what should happen to the remaining 25 percent, which cannot be disposed of or reused. The Germans, for example, burn it, which produces electricity and heat.

As the efficiency of the system improves, is it not expected that the EPR fees will be reduced?

This is an introductory period that requires patience, but it is in Mohu’s interest to prove the raison d’être of the new system. For now, I think they can try to avoid further increases.

The golden age of governors: instead of the middle class, the new bottle exchange increased the self-awareness of the needy.

We are already hearing about more intense tensions on the market for waste that is collected separately and can be sold for good money, which is also basically residential but also called institutional waste – for example, household metals.

The Köztistzasági Egyesülés brings together public service providers dealing with solid waste generated during settlement operations, municipal and public cleaning companies, such as those cleaning public spaces, as well as contractors of certain usable waste. The interests of other sectors are represented by others. Nevertheless, in general, I see the problem is that the concession contract, at least its public section, does not specify exactly, according to the code, which types of waste it covers, which is now giving rise to jurisdictional disputes. In my opinion, the main goal of the system is the continuous provision of services to the public, behind which, understandably, the political intentions of the legislators also arise.

In connection with the new bottle exchange, there would probably be proposals from the public.

I see the problem here, too, in that the decision to launch the concession system barely preceded the introduction date promised to the EU. So Mohu had to hurry. With a longer introduction, more thorough information, more thought-out planning, and more, possibly larger equipment, the current tensions could perhaps have been better eliminated.

Excuse me, but how would more thorough information prevent, say, the smell of garbage that has been spreading in grocery stores since July? Should I take tweezers with me when grocery shopping and hold my nose with them? Are the professionals surprised that the waste processor assigned to the food counters stinks?

This is also a new situation that can be honed. It is no coincidence that Mohu is now looking for opportunities outside of stores. My own experiences are also contradictory. There are places where there is always a long line and the machines are stuck. In the separate room of the other hyper, the machine is sufficient and there are no interruptions. I think they are handling the situation in the former as well. Presumably there are not enough machines. The smaller Finnish population gets much more equipment. It is Mohu’s task to arrange this, for which it must receive funds even without an EPR fee increase. But this also requires a lead time and I don’t know the details of the contracts with the dealers.

Do you see a need for legislative change here?

Most of all, the small settlements could put pressure on the legislators to extend the obligation to local shops and create the opportunity locally. Loners buying bottles cheaper have already appeared in these areas.

Before the concession, there were lively takeovers among public service providers, which is rarely heard about now.

I hear what our declining membership indicates. The conditions negotiated with Mohu seem to force the players to continuously improve their efficiency. Thus, acquisitions and mergers are constant.

Five years ago, shortly after the appointment of Gergely Karácsony as mayor, you were dismissed from the position of CEO of FKF, citing a contract with a company association that included the Mészáros group. How do you remember this and the time since then?

I still consider my dismissal unfair. Due to the termination of the previous contractor’s contract, I urgently had to sign a contract for the removal of the ash from the Rákospalota incinerator, otherwise the waste incineration would stop. This, in addition to the fact that, during the heating season, would have affected the people living in the housing estates in the area very sensitively, it also threatened the company with serious financial damage. One member of the only company association that applied for the second public procurement after the first unsuccessful one is indeed a Mészáros interest, but this can hardly be avoided today. Although my promised consulting assignment after my immediate release did not materialize, I would not have given my name to some of the measures that followed. And here I am not referring to the fact that FKF also merged into the Budapest utility holding, whose public waste services are now carried out by a joint subsidiary with Mohu. But that our stock somehow dwindled after the merger, which resulted in such a serious shortage of spare parts that two years ago, for a few days, even the garbage was left in front of the gates of the capital. During that period, I dealt with market consulting, and in 2022, probably also due to my four decades of professional experience, I was asked to lead the Köztistzasági Egyesülés, which I have been doing dedicatedly ever since.