By Cara Waters
The City of Melbourne is selling its rubbish services in a $110 million deal, under which Cleanaway Waste Management will buy Citywide’s waste and recycling business.
The council will use the cash from the sale to establish a future fund, which outgoing Lord Mayor Sally Capp said would be used to deliver the council’s “intergenerational future projects”.
Melbourne Lord Mayor Sally Capp announces the sale of Citywide’s waste-management business on Monday.Credit: Penny Stephens
Capp would not say whether those future plans would include her passion project, the landmark $316 million Greenline trail – a linear park to run alongside the Yarra River’s north bank – which the council has struggled to find funding for.
“It’ll really be for future councils to decide what projects will be funded from the future fund,” she said on Monday. “The terms establishing the future fund will be very clear: it is for intergenerational strategic projects that will affect generations of Melburnians.”
Citywide, which was formed in 1995 and is chaired by former premier John Brumby, is a wholly owned subsidiary of the City of Melbourne.
“For all of the ratepayers in the City of Melbourne, please be assured that your services will continue unimpeded; there’ll be exactly the same great level of service,” Capp said.
ASX-listed waste management giant Cleanaway will pay $110 million for Citywide’s waste and recycling business and assets, and under the terms of the deal will spend $35 million redeveloping Citywide’s waste-transfer facility in Dynon Road, North Melbourne.
The City of Melbourne will put an additional $10 million into the redevelopment of the waste-transfer facility, which receives more than 200,000 tonnes of waste and recycling annually.
As a condition of the sale, Cleanaway will have a 35-year lease of the waste-transfer site and will partner with the council to establish a new “state of the art” facility with an environmentally sustainable design.
The Dynon Road facility is the second largest in Victoria and can handle rubbish collected from municipalities, houses, businesses and factories. It also has the capacity to recycle cardboard, steel and organic waste.
Capp with Citywide boss Chris Campbell (left) and Cleanaway’s Claire Halsey.Credit: Penny Stephens
Citywide reported $370 million in revenue in the 2023 financial year. However, the company made a $1.8 million net loss due to a temporary closure of its waste-transfer station, along with contract losses in its municipal and utilities business, delays and staffing shortages.
The company came under public pressure last year after almost 7000 residents reported not having their kerbside rubbish bins emptied when the company took over the contract for the City of Port Phillip’s kerbside collection.
Citywide also has contracts worth tens of millions of dollars for services including rubbish, landscaping and civil infrastructure.
Capp is in her final week as lord mayor of Melbourne before she hands over to her deputy, Nick Reece, who will take the reins in the lead-up to the local government elections in October.
“There are no other major announcements anticipated between now and the end of the financial year,” Capp said when asked whether she planned to sell off any other council assets.
Cleanaway chief executive Mark Schubert said the company would create a “best-in-class facility” in redeveloping the Dynon Road site and aimed to almost double its operating capacity.
“This will serve residents and businesses while enhancing sustainability and waste circularity in the Melbourne area,” he said.
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