But Mayor Dave Cull has denied the charge, saying the council was putting ratepayers' interests ahead of its own bottom line.
The debate followed last week's announcement Delta, a DCC-owned company, had lost the eight-year, $20.6million contract to run the landfill.
Waste Management Ltd was instead the council's preferred contractor, following a competitive tender process which attracted four bids.
Waste Management, owned by the Beijing Capital Group Co Ltd of China, has a New Zealand presence, including in Dunedin.
The announcement is expected to cost Delta at least 12 jobs, although the company was still refusing requests for details yesterday.
It is understood 12 workers were told on Friday their jobs were on the line, and that at least one manager's role could also be affected.
A Delta spokesman would only say the company was ''working through the implications and are unable to comment on potential outcomes''.
That did not stop former Dunedin deputy mayor Dame Elizabeth Hanan from contacting the Otago Daily Times to criticise the ''short-sighted'' decision.
Delta had performed well at the landfill and transfer station in recent years, earning it an Enviro-Mark gold certification standard, she said.
Axing the company's contract meant job losses and reduced income to funnel back into the council's coffers as dividends.
Total savings for the council of just $500,000 over the life of the new contract meant the deal did not ''stack up''.
''The maths does not stack up and the ratepayers stand to lose ... How can the DCC be so short-sighted?
''Another blow for the city, and this time created by the DCC itself.''
Mr Cull rejected the claim but said the council would be criticised either way.
''If council has completely objective criteria for deciding who to put a contract with, and one of our own companies misses out, as is the case now, we get criticised.
''If we favour our own companies and make it part of the criteria, and possibly pay more or get lower value or whatever, we get criticised.''
The council had overhauled its procurement process to ensure it was ''completely objective'' and delivered the best value for ratepayers, he said.
Council acting infrastructure and networks general manager Richard Saunders said the open tender simply aimed to secure the services of the best candidate.
''There was certainly no specific decision made to take it away from a Dunedin company,'' he said.
''It was just a case of the tender process being the process we go through to get the best outcome for whatever the particular contract is we're looking to let,'' Mr Saunders said.
''While we understand that some people would question why a contract would be shifted to a company outside Dunedin, from our point of view we're just looking at it as far as running a very transparent and robust process to appoint the best contractor to deliver a particular contract, and that's what we've done in this case.''
Tender documents released yesterday showed the rival bids were measured against a series of price (30%) and non-price (70%) attributes.
Non-price attributes included the company's experience, skills and resources, financial viability and health and safety records.
Mr Saunders said the process aimed to deliver ''a fair and equitable playing field'' to companies bidding for work.
The impact on council dividends was not one of the criteria, and savings resulting from the change were ''just an outcome of this process'', he said.
Mr Saunders could not say when contract negotiations with Waste Management would conclude, ''but we wouldn't expect it to take too long''.
Related Stories
Comments
"But Mayor Dave Cull has denied the charge, saying the council was putting ratepayers' interests ahead of its own bottom line." So perhaps you need to ask him whose bottom line is coming second to ratepayers' interests? What on earth can he mean?
Good on the DCC for having the balls to take a contract away from a flabby, over-staffed, council organisation. Hopefully this will wake Delta up.
Ms Hanan is entitled to her opinion, but it's certainly an uninformed one. The only thing that doesn't "add up" is her own logic.
Simple maths. $20mil contract at a guess Delta make $1million in profit over the 8 years (which goes back to the council).
Net position ratepayers lose $500k. Rates go up.
There doesn't seem to be a day goes by without another questionable decision coming from DCC.
I seriously doubt any savings will be made over 8 years. The 2% purported saving will easily be soaked up by out of scope charges and contractor failings. DCC should have to release the full contract including all KPI's and other measurements. This is standard practice in the US of A. No reason apart from butt covering that it can't happen here. None of this commercial in confidence rubbish.
DCC have proven themselves to be terrible managers of outsourced work. Wonky lines on sports grounds, failure to clean drains etc. And ratepayers are always picking up the costs for their ineptitude. I really hope this contract is different, but I doubt it. If this deal turns out to be another failure, someone at council should have their name on the deal and be fired when the contractor fails. Some personal accountability might just focus their attention to doing a better job in contractor selection. And that goes to the CEO and Mayor as much as their underlings.