Berliner Stadtreinigungsbetriebe Business Information, Profile, and History

Company Perspectives:

The Berliner Stadtreinigungsbetriebe has undergone a fundamental modernization. Today, success-oriented thinking and action determine the company goals. The transformation into a Anstalt öffentlichen Rechts in the year 1994 made way for positioning the company in a way that takes into account social and environmental requirements as well as the demands of the market.

History of Berliner Stadtreinigungsbetriebe

As Berlin's principal waste collector, Berliner Stadtreinigungsbetriebe (BSR) is Germany's largest municipal waste management company. About 6,600 BSR workers cruise the streets of Berlin--a city of 3.3 million--in over 2,000 vehicles, keeping 780,000 miles of streets clean and collecting 1.6 million tons of dirt and household waste per year. Most of the collected waste is brought to BSR's waste incinerator or to one of the two landfills the company runs at the outskirts of the city. Berliners can recycle their waste materials in one of the 18 recycling centers BSR runs across the German capital. Through a number of subsidiaries, the company is also involved in commercial waste management. One subsidiary, brs Berliner Recycling Service, recycles paper waste from businesses. BRAL Reststoff-Bearbeitungs GmbH collects commercial organic waste. Other subsidiaries are involved in environmental consulting and engineering and in the leasing and development of BSR's real estate. BSR is owned by the state of Berlin and governed by public law.

16th Century Origins of Waste Collection in Berlin

In 1583, Berlin's reigning count, Kurfürst Johann Georg, announced that it was the responsibility of every citizen to keep their courtyards and the city's alleys clean. At that time, cleaning the streets, including the removal of dead animals and dead bodies, was one of the tasks of the public executioner and his men. The Great Count Friedrich Wilhelm took residence in Berlin in the middle of the 17th century, and during his reign the city began to grow into the political and cultural center of the noble Hohenzollern family and later of the growing kingdom of Prussia. When Berlin became an official military base, a Garnisonsstadt, cleaning up the streets became a duty of the military. Three years later, a new bill for keeping the alleys and water-wells clean, the so-called Brunnen-und Gassenordnung, came into effect for Berlin and its neighboring city Cölln. From then on, a Gassenmeister, or alley master, came through the city with a special coach into which the citizens would throw their trash. If the Gassenmeister found waste laying in front of a house, he was authorized to throw it back into the suspect's open window. This system was finally abandoned in the second half of the 18th century.

In 1700, Kurfürst Friedrich III ordered the city's inhabitants to clean the streets two times a week. However, these and other measures did not have the desired effects. In 1735, King Friedrich Wilhelm I passed a new bill that required the military to encourage Berliners to keep their streets clean. Following a detailed plan, military personnel frequently hauled 28 waste coaches through the city. The first attempt to privatize the task in 1777 failed because the hired businesses apparently did not take the task very seriously.

After new legislation was passed in 1808, Berlin became a self-governed city. Cleaning the streets became a task of the city government. The city grew ever larger during the 19th century, fostered by a new entrepreneurial freedom and the foundation of a university. Beginning in 1826, Berlin's streets were covered with cobblestones, which made them much easier to keep clean. When unemployed and starving Berliners rebelled against the Prussian government in 1848, the city decided to extend street cleaning activities into the suburbs in order to give some of them a job. Three years later, the city government decided to merge the fire fighting department with the street cleaning department to save cost. In 1887, municipal trash collection points were set up for the first time. Previously, waste was simply dumped somewhere in the countryside.

Waste Management in Berlin: 1871-1939

After the proclamation of the German Empire in 1871, Berlin became the new Reich's capital. Over the next four decades, the city underwent an enormous expansion, partly driven by the forces of industrialization. In 1875, Kaiser Wilhelm I ordered that cleaning of the public streets be an independent branch of the city administration. The introduction of night shifts made an enormous difference in the quality of city cleanup services. Paved streets also made possible the introduction of better equipment, such as machines that scrubbed and washed the streets. Around 1905, there were over 100 such machines in use in Berlin.

Airborne dirt and dust were a major problem in the German capital. Beginning in the mid-19th century, special carriages with water sprinklers--so-called Sprengwagen--cruised the city's streets. In 1895, the city administration forbade the establishment of new waste dumping sites in the city and ordered that trash bins be placed in the courtyards. Up until the 1890s, household trash was picked up in Berliner Kästen, rectangular open boxes which were emptied into special coaches by the trash collectors. In the 1890s, the Kästen were replaced by trash containers with a lid. Following the idea of a Berlin entrepreneur, the full containers were picked up and replaced by empty ones.

In 1884, Berlin's city government, the Magistrat, took on the duty for keeping the city's streets clean and over time hired about 60 different private firms to do the job. However, ten years later Berlin homeowners and landlords founded their own trash-collection company--the Berliner Grundbesitzer GmbH. The company leased or purchased land outside of the city limit and hauled the collected trash there by train or barge. By 1914, the Berliner Grundbesitzer GmbH collected household trash from about 90 percent of the city's buildings. The outbreak of World War I caused chaos in the trash collection business. Many workers and horses were drafted for military service. Skilled workers were replaced by prisoners of war and even women. However, the physically demanding work was too much for many of them. For the Berliner Grundbesitzer GmbH, the turmoil during and immediately after the war turned out to be an unmanageable challenge. Service fees rose so steeply that some city officials started looking for alternatives. In October 1922, the Berliner Grundbesitzer GmbH was dissolved.

In the same year, a new entity--the Berliner Müllabfuhr-Aktiengesellschaft (BEMAG)--was founded to take care of the city's waste management. To ensure that municipal interests took first priority, the city held 25 percent of the share capital of the joint-stock company. In addition, an agreement with the other shareholders stated that Berlin's mayor would oversee the operation. Four years later, the city started acquiring more shares, reaching an 85.8 percent stake in BEMAG by 1927. After Hitler's National Socialist Party came to power in 1933, BEMAG was transformed into the city-owned Städtische Müllbeseitigungsanstalt. "Using the useless" was a high priority in Nazi Germany. Accordingly, the recycling of waste materials was strongly promoted by the government. In 1938, about 17,000 tons of recyclable materials were recovered in Berlin.

First attempts to recycle dated even further back--mainly because the city was running out of dumping space for trash. Beginning in the 1920s, much of Berlin's waste was hauled to one of four inner-city sites. From there it was shipped--more and more by train, less and less by barge--to landfills in the surrounding Mark Brandenburg. At the same time, some city districts started experimenting with recycling. In Charlottenburg, a suburb which later became a part of Berlin, citizens were provided with three different containers--one for ash, one for food leftovers, and one for paper, metal, glass, and old clothes. Even earlier, during World War I, Berliners traded organic waste, such as potato peels and cabbage leaves, for fire wood. Another attempt to manage the growing amounts of waste in Berlin was the establishment of an incinerator in 1919. However, the facility was shut down after it turned out that this method was unreliable and costly. Furthermore, the ashes it emitted into the air had the undesired effect of settling on the roofs of the surrounding neighborhoods.

Cleaning up after World War II

On February 3, 1945, about 1,000 U.S. bombers dropped many tons of explosives onto Germany's capital. A few weeks later, on May 7, Germany surrendered unconditionally to the Allied forces. The World War II was over--and Berlin lay in ruins. Two-thirds of all buildings were destroyed. One-third of Berlin's population had left the city or been killed. Many of the 2.8 million inhabitants in postwar Berlin had lost their homes to the bombing. They were starving and struggling with diseases. In this situation, avoiding the outbreak of epidemics was the foremost concern of the city's waste management department, which resumed operations a few days after the war ended.

In the first years after the war, the Allied forces that occupied Berlin oversaw the city's waste management. In August 1945, the Allied administration ordered the foundation of a new institution, the Grossberliner Strassenreinigung und Müllabfuhr, headquartered in the eastern part of the city, which also included formerly independent suburbs on the outskirts of Berlin. With a limited workforce and little technical equipment, the cleaning up of a city in ruins began. After it became clear that the task was too much for the limited resources available--by spring 1946, about four-fifths of the waste was not being picked up--the city's district governments and landlords had to contribute their share, and a two-shift system was introduced. Two years later, in spring 1948, the occupying forces in Berlin's American sector initiated a major clean-up campaign that was very successful.

A big problem in postwar Berlin was the transportation of the rubble left by the bombing out of the city. Since only a few railway cars had survived the war, only limited amounts could be hauled out of Berlin. New sites within the city, including trenches, a destroyed bunker, and a subway tunnel, were filled up with waste materials. However, these did not provide enough space for all the rubble that covered the city. Five years after the war ended, about 30 "rubble hills"--between 200 and 330 feet high--rose into the sky above Berlin. They were "built" by about 60,000 "rubble women"--Trümmerfrauen--who did the largest share of the clean-up work.

Separated in 1948; Reunited in 1992

When the Soviet occupation forces blocked railway and highway traffic between the western sectors of Berlin and the western part of Germany in July 1948, hauling trash outside the city became impossible for those three sectors. Over the next few months, the administrations in the western parts of town and the Soviet-occupied eastern part distanced themselves from each other. Soon it became clear that the city would be divided into two parts. That division included the division of Berlin's waste management. In 1949, two separate German states were founded. Two years later, the waste management department for the western part of Berlin moved to new premises in the Tempelhof district and was renamed Berliner Stadtreinigung. In 1970, it was changed to Berliner Stadtreinigungs-Betriebe (BSR). The waste management department in East Berlin retained the old name--Grossberliner Stadtreinigung und Müllabfuhr--until it was changed to VEB Stadtreinigung Berlin in 1976, then to Kombinat Stadtwirtschaft Berlin in 1981.

The postwar "economic miracle" in West Germany brought about an ever growing amount of waste. With a throw-away consumer culture on the rise, isolated West Berlin, which had been enclosed by a wall in 1961, was overwhelmed by an avalanche of trash and soon ran out of landfill space. The establishment of a waste incinerator seemed the only way out. In 1967, a newly built facility in the Ruhleben district was able to process one-fifth of West Berlin's waste. However, this was only a drop in the bucket. By 1970, the amount of waste had grown by 126 percent compared to ten years earlier. Beginning in 1972, the government of the German Democratic Republic, the East German state, allowed some of West Berlin's trash to be brought into their country. Two years later, an official treaty was signed between East and West Germany that guaranteed West Berlin the right to dump a certain amount of household trash, construction waste, and dirt into East German landfills for the next 20 years. The agreement included a guarantee by the western authorities that a specified minimum amount of waste would be brought annually to the eastern side. The agreement provided a welcome source of hard currency income for the East German regime. The West Berlin BSR had to invest in the necessary infrastructure for compressing the city's waste and transporting it to the East German sites. Consequently, the company had to raise their fees drastically and soon reached a cost unknown in other West German cities. BSR put more effort into recycling and tried to burn as much of the waste as possible. When the amount of West Berlin's waste began to approach a leveling-off point in 1984, the treaty had to be renegotiated. To make up the fees lost by East Germany, the state of West Berlin agreed to build a brand-new incinerator for hazardous waste in Schöneiche, southeast of East Berlin, which began operations in 1990.

By that time, the Berlin Wall had practically fallen after the East German regime had opened its borders in November 1989. On October 3, 1990, the two German states were officially reunited. Berlin--after a tough struggle against the established West German government bureaucracy in West Germany's capital of Bonn--once again became the German capital. Two years later, after 32 years of separate operation, the eastern waste management company was merged with BSR.

Challenges in the Mid-1990s and Beyond

The company, which had been formerly owned and run by the city, was transformed in 1994 into an Anstalt öffentlichen Rechts--an institution that is a legally independent entity but is governed by public law and is not allowed to make any profits. Throughout the second half of the 1990s, BSR struggled to integrate the two operations, to modernize its fleet and facilities to match new environmental standards, to optimize its processes and organizational structure in order to raise productivity, and to improve the company's public image.

Besides these internal challenges, BSR was facing various outside pressures and uncertainties. In the mid-1990s, it was not clear if the state of Berlin would renew BSR's de facto monopoly to collect Berlin's household trash and clean the city's streets. In 2000, BSR's contract was renewed until 2015 but with strict requirements for improving the company's efficiency and lowering its fees. Another important influence was legislation passed by the European Union (EU) that had to be implemented in every member country. One of the new requirements was that by 2005 all waste deposited in landfills had to be pre-processed to reduce its volume and possible negative environmental impact. On the other hand, the EU favored free market enterprises in waste management over municipally owned and run companies in waste management and required that all activities besides collecting waste had to be performed by private enterprises. However, while collecting household waste and cleaning streets was a rather cost-intensive and low-profit activity, recovering usable materials and processing the remaining waste, as well as serving larger businesses, was much more lucrative. To avoid being pushed into the least profitable market, BSR spun off some of its subsidiaries that processed waste materials or served commercial customers in 2000.

Two years later, the company was thrown into turmoil when it turned out that some of BSR's customers had been charged twice for the same service, which resulted in a EUR 60 million (about $60 million) fraudulent gain between 1999 and 2002. The "miscalculation," which had escaped the notice of auditors for almost four years, caused a top management crisis--the company's CFO and CEO resigned--made headlines, and initiated a new public discourse about BSR's future. The company's top management had to appear before a special committee of the state assembly, the Berliner Senate, which inquired into some of the company's financial practices. One of the main controversial issues was whether some of these practices complied with the principal requirement for its legal form--not to make profits but to translate financial gains into lower fees for its services. Some of the assembly members favored private-public partnerships, a model in which BSR would participate in the profitable processing of waste materials by cooperating with private waste management firms; others lobbied for strictly limiting its activities to collecting the waste. Still others suggested tightening the guidelines for fee setting, or even revoking BSR's collection monopoly altogether and letting private companies bid for the contract. To make things worse, in February 2003 a Berlin homeowner won a precedent-setting case in which he claimed that BSR had charged him too much for its services.

Meanwhile, competitive pressures in Germany's waste management market were rising enormously. While the amount of waste had been stagnating--due to more intense recycling efforts and a trend to avoid waste in the first place--every player in the market was trying to run their now-oversized facilities to the highest possible capacity by taking away customers from competitors. On top of the fierce competition between municipal and private waste management firms, a more liberal policy favored by the EU opened the market for large internationally operating companies. In the early 2000s, it was unclear who would win the race in Berlin. BSR's future was wide open.

Principal Subsidiaries: DASS Die andere SystementsorgungsGesellschaft mbH (50%); BRAL Reststoff-Bearbeitungs-GmbH (50%); brs berliner recycling service GmbH; FAREC Fahrzeugrecycling GmbH; FBS Fuhrpark Business Service GmbH (95%); gbav Gesellschaft für Boden- und Abfallverwertung (51%); RUWE Jörg-Peter Gabriel GmbH; KMG - Kraftfahrzeug Management GmbH; BC Berlin-Consult GmbH (65%); Radians Grundstücks-Vermietungsgesellschaft mbH; deltaorion Beteiligungs-GmbH; BSR Investitions- und Umwelttechnologiegesellschaft mbH; EKOTECHNOS-R gAG (Russia; 51%).

Principal Competitors: ALBA AG; RETHMANN Entsorgungs AG & Co; SERO Entsorgung AG.

Chronology

• Key Dates:
• 1875: German Kaiser Wilhelm I makes cleaning of Berlin's streets an independent branch of the city administration.
• 1894: Berliner homeowners and landlords found their own waste collection cooperative.
• 1922: The cooperative is replaced by joint-stock company BEMAG.
• 1935: BEMAG is transformed into the city-owned Städtische Müllbeseitigungsanstalt.
• 1945: The Grossberliner Strassenreinigung und Müllabfuhr is established.
• 1948: A separate waste management authority for the three western sectors is established.
• 1951: The West Berliner waste management division is renamed Berliner Stadtreinigung (BSR).
• 1967: BSR becomes a city-owned operation.
• 1974: A treaty for depositing West Berlin's waste in East German landfills is signed.
• 1992: East Berlin's waste management company is merged with BSR.
• 2000: The Senate of Berlin extends BSR's waste collection monopoly until 2015.