Teething problems are being blamed for a poor start to the £82m waste contract between Kier and Bridgend County Borough Council.
When the service was launched in June last year, residents complained of missed and delayed collections, bad smells and maggots.
The contractor was given a “significant’ fine for missed collections, although the council said it cannot reveal how much it was for legal reasons.
In a report to the council’s overview and scrutiny committee earlier this week, it was revealed that Kier amassed 425,000 penalty points in the first year due to missed or late collections. This is now down to 9,000 monthly and is decreasing.
However, the committee was told that the service had “gradually but significantly improved” and that “performance overall is now considered to be consistent with industry standards”.
Some parts of the service “are yet to be fully resolved” such as collections from housing estates.
A spokesperson for Bridgend council said: “In the 14 months since it was launched, the scheme has overcome its initial teething issues to become the second best recycling service in Wales.
“The recycling rate has risen from 57.9% to 68.6%, while contractual performance deductions and customer complaints both continue to fall.
“The council and its waste partner Kier are working to deliver further improvements that will ensure the scheme remains one of the very best in Wales.”
The authority said the recycling rate for the year is forecast to exceed 70%, while the Welsh Government recycling targets are 64% by 2019-20 and 70% by 2024-25.
A Kier spokesperson said the service was now “performing well” after “initial issues”.
The spokesperson added: “Working alongside the council, we constantly review the service and we have seen performance deductions continue to decrease, as well as customer complaints.”
Penalty points are awarded for missed or late collections. A missed single container or sack delivery results in five penalty points, for example, and a missed collection results in two points and a missed AHP collection 25 points.
Successive interim management arrangements were also reported to have contributed to poor service, which have now been resolved.
The call centre experienced difficulties, with 255 calls not being answered within the target of two minutes, 203 calls were abandoned and 108 voicemails were left out of 4,574 calls in July.
The overview and scrutiny committee also discussed how markets for recovered plastics had declined following China’s ban, placing a premium on quality material.
The committee said adding film and food trays to its collections could devalue the current sale of plastics product by £50 a tonne, and risk it being left unable to sell material at all. It estimated that accepting film and black plastic trays could lose £110,000 in revenue.