In Mokattam, where the Zabbaleen - or garbage people - live, the stench of rotting trash is almost unbearable. Garbage is piled three stories high, pigs play in pens of thick, black mud, and streets ooze with waste.

But at closer glance, the picture is not so bleak. The monstrous piles actually have been sorted into plastics, textiles, and glass. In one nook a young man is granulating sorted plastic in a large steel machine, and in another a man is hanging recycled clothes hangers. In a sunny, concrete building, girls are weaving rugs, while others are laying recycled paper out to dry.

In fact, greater Cairo's 60,000 Zabbaleen, who gather one third of the city's 10,000 tons of daily garbage, have what is considered one of the world's most innovative and efficient models of solid waste disposal. They collect the garbage, sort it, and then recycle as much as 80 percent of it into raw materials and manufactured goods - plastics, rugs, pots, paper, and glass - which are then traded with thousands of businesses nationwide. The Zabbaleen's system has won awards, been applauded at international conferences, and been imitated in other cities, including Manila, Bombay, and Los Angeles.

While it would seem any government would embrace a system that costs the state nothing, recycles so much waste and employs tens of thousands of Cairo's poorest, this is not the case here. Last week, Egypt awarded contracts to private foreign companies to pick up Cairo's garbage using Egyptian workers. Government officials complain that the Zabbaleen weren't picking up all the city's garbage, two-thirds of which was collected by companies or government employees, or not at all. They also say that the Zabbaleen only want the more lucrative high-income trash, not the low-income waste, and that their methods are unhygienic and backward.

Beginning this year, the government will stop renewing the Zabbaleen's licenses, and over the coming months foreign contractors will gradually replace them. For the Zabbaleen and their supporters these new developments are extremely troubling.

"We're at our wits' end looking for solutions," says Leila Iskander, a community development practitioner, who has worked with the Zabbaleen since 1982. "We don't want this to turn into a human tragedy for 60,000 people, who will be cut out of a livelihood - women, children, everybody."

A Coptic Christian community of formerly landless and unemployed peasants, the Zabbaleen began coming to Cairo from southern Egypt around 50 years ago. They settled in slums on the city's outskirts and began collecting garbage in carts. Through their own initiative they started sorting the waste and trading it, eventually manufacturing the garbage in the 1980s with development agency assistance. Over the years they've used their profits from trash to upgrade their neighborhoods, educate their children (all are currently enrolled in school), create jobs for their women, and improve their equipment and methods.

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