As a result of a successful incubation model – with a focus on waste management – in the City of Tshwane, a consortium made of Go Green Renewable Energy and Batsumi Batsha have partnered towards growing the township economy by creating 42 jobs in the areas they service.
It all began when the New GX Enviro, a specialist waste management service provider, was contracted by the City of Tshwane to run a business incubation model that saw the six Small Medium and Micro Enterprises (‘SMMEs’) being trained on how to run their own waste management operation.
Appointed in August 2011, New GX Enviro was responsible for delivering household waste collection, litter picking, illegal dumping clearance, bulk container removal and recycling services within Atteridgeville, Lotus Gardens and Olievenhoutbosch. This pioneering incubation programme began in February 2012 and it has shown a successful track record and strong economic, social and environmental credentials since its inception.
For a period of three years, the six SMMEs were taught about all aspects of running a waste management business. The foundational knowledge was laid for the SMMEs through an NQF level 4 course on New Venture Creation that New GX developed and had accredited by the Services SETA.
Most importantly, the contract determined that the compactor trucks, which had to be new at the beginning of the term, were to be handed over to the SMMEs, at no cost, at the end of the contract. To ensure the protection of the compactor trucks all the drivers were assessed by the Original Equipment Manufacturer (‘OEM’) before being allowed to operate the compactor trucks.
This simple control in itself threw up one of many challenges throughout the contract with only one out of the first 5 experienced and qualified drivers being assessed as competent to operate the compactor truck. During the incubation programme, the SMMEs’ drivers were careful on road and while idling, following good driving habits – this resulted in good fuel consumption figures and low running costs.
In turn, excellent discipline and sound business principles were acquired as the SMMEs realised that through good vehicle care the vehicles would retain solid value; which is most favourable to them when the vehicles became their property.
In January 2015, these compactor trucks were handed over to the SMMEs for them to continue to offer services and grow their businesses.
When the trucks were initially purchased by New GX Enviro, a key factor determining the type of truck to be purchased was the sustainability of the SMMEs beyond the contract period and their ability to use the trucks to generate revenue for themselves. As such, New GX purchased new 20 cubic metre rear end loader compactor trucks with mechanical bin lifters as these are the backbone of urban waste management throughout South Africa.
Having the “right” equipment would give the SMMEs the ability to find other contracts for their compactor trucks once ownership passed to them. The purchase of the new 20 cubic metre rear end loader compactor trucks speaks to the intention of New GX Enviro at the beginning of the contract as these compactor trucks cost almost 50% more than the minimum specification truck allowed by the contract with the City of Tshwane.
Since the trucks were handed over, two stand-alone businesses with the skills and resources to succeed have been formed since the handover of the trucks. Five of the six SMMEs formed a consortium called Go Green Renewable Energy. This shows the depth of understanding by these SMMEs and the realisation that it was difficult to be sustainable or the missed opportunity for economies of scale as one company with one truck.
They then worked together to share their infrastructure, operate their fleet more effectively and as a result, offer a better service to their customers in a more profitable way for themselves. The sixth formed a company called Batsumi Batsha which has other shareholders. Together they have contributed towards growing the township economy by creating 42 jobs in the areas they service.
Post the handover of the compactor trucks, New GX Enviro and the SMMEs have continued to explore ways to make their operation more efficient in order to allow them to use the same asset base to service an ever expanding area.
This lead to the installation of tracking units on all the compactor trucks and the generation of detailed daily reports on key performance indicators such as driver behaviour, start and end time, kilometres travelled, vehicle work time vs vehicle driving time, trips to landfill. These create visibility on where effort is spent in the operation and facilitate work optimisation.
The weekly dashboard report covers the same KPIs as the daily however this is then used to analyse trends week on week and facilitate better planning of the available fleet. The SMMEs and supervisors also have an app on the phones which allows them to see where their compactors are at any point in time and to see wards covered down to street level for the day, driver behaviour – speeding, harsh breaking, acceleration and so on.
Since February 2015, these two companies have been subcontracted to New GX Enviro and providing weekly house-to-house refuse removal services in the formal areas of Atteridgeville, Lotus Gardens and Olievenhoutbosch.
New GX Enviro’s assistance to the SMMEs did not end with the handover of the compactor trucks. While the SMMEs built their capital reserves, New GX Enviro extended its credit facilities to the SMMEs for diesel, maintenance, tyres and all the other operating costs. As the SMMEs capital reserves have grown they have taken over these accounts into their own names to the point where they now operate almost 100% independently of New GX Enviro. New GX Enviro continues to mentor the SMMEs, supervise their services and assist them to develop other business opportunities.