Innovative approaches to solid waste management in India

Indo-USFinancial InstitutionsReform and Expansion Project -Debt Market ComponentFIRE(D)Project NotesNote No. 15February1999Innovative Approachesto Solid Waste Management in IndiaFocus on Private Sector ParticipationAs the challenge of providing urban environmental services in India’s growing cities becomesmore and more pressing, beleaguered urban managers are turning toward private sector participation.Various approaches to privatization exist, offering cost savings, new technologies,improvements in efficiency and effectiveness and reduction in the need for permanent sanitationstaff. Still, new approaches require flexibility and adaptation to become effective. ThisProject Note describes innovations and lessons learned in several Indian cities, and discussesefforts of the FIRE(D) Project to help cities take a strategic approach to solid waste managementand develop commercially viable solid waste management projects in the cities of Surat,Kolhapur and Tiruppur.Funded byUnited StatesAgency forInternationalDevelopmentInnovative Approachesto Solid Waste ManagementAs India’s cities begin to grow at an accelerating rate,urban managers are faced with overwhelming demandfor services and inadequate resources with which toprovide them. And as densities increase and citiessprawl, solid waste is becoming a visible problem. Inthis scenario, privatization offers a promising alternativeto public sector management. Several Indian citieshave taken steps to introduce private sector participation(PSP) in various forms, and while resultshave been encouraging, it is also clear that frameworksfor PSP will have to evolve, depending upon the capacityof local bodies, legal and institutional provisionsand characteristics unique to the private sector.PSP in solid waste management offers several advantages,the first of which is cost savings, which areclosely related to improvements in the efficiency andeffectiveness of services. Privatization can also openthe door to introduction of new technologies. Moreover,it can reduce the establishment costs of keepingand managing a full complement of permanent staff.The cities of Navi Mumbai, Hyderabad, Surat andRajkot have each experimented with private sector participationin various aspects of solid waste managementwith encouraging results.PSP in Navi MumbaiIn its role as the developer and manager of NaviMumbai, a new township on the periphery of greaterMumbai, the City and Industrial Development Corporationof Maharashtra, Limited (CIDCO) has enlistedprivate sector participation in a number of cityservices, ranging from sewerage to street lights. Forsolid waste management, CIDCO has taken two approachesto engaging the private sector. One is theuse of sanitation contractors, who sweep roads andfootpaths, and collect and transfer garbage to streetcontainers. The second is transport contractors whothen transport the garbage, using CIDCO vehicles,from containers to disposal sites.Under both types of contracts, work is allotted for aperiod of six months, which is extended for anothersix months if performance is satisfactory. CIDCO has

INNOVATIVE APPROACHES TO SOLID WASTE MANAGEMENTFIRE(D)the right to levy penalties for unsatisfactory work or inthe case of complaints from the community, and if workis continuously unsatisfactory, the Chief Health Officeris authorized to terminate contracts with three daysnotice. A security deposit of 5% of contract value iskept by CIDCO, which is returned without interest atthe completion of the contract.CIDCO estimates that the use of private contractorsresults in a cost reduction of 40%, and has eliminatedthe need to hire and manage 450-500 sanitary workers.In 1992, Navi Mumbai Municipal Corporation(NMMC), covering four of Navi Mumbai’s seven nodes,was formed to assume management responsibility fromCIDCO, and NMMC plans to continue the use of privatecontractors for solid waste collection and transport.PSP in SuratIn 1994, the city of Surat experienced an outbreak ofthe bubonic plague which resulted in severe financiallosses to the city and the country as a whole. This episode,however, served to focus attention on publichealth and, in particular, the management of solid wastein the city. The Surat Municipal Corporation immediatelyundertook a number of steps to improve its managementof solid waste disposal and other urban environmentalservices. Today, Surat is one of the cleanestcities in India and has become a model to which othercities look for direction.Reforms undertaken in Surat include an acceleratedcampaign to clean sewage lines and septic tanks; majorroad widening; demolition of unauthorized construction;and cleaning of high density roads duringday and night. The administrative structure for solidwaste management was also decentralized to the chargeof six deputy health officers and 52 sanitary inspectors,and additional staff and vehicles were provided forsolid waste management. Surat also undertookprivatization of solid waste services.Private contractors have been engaged in road sweeping,garbage collection and transportation under a varietyof arrangements. Sweeping is paid on the basisof square meter coverage, and the entire road surfacemust be swept. Garbage collection and transport iscompensated on the basis of tonnage delivered to disposalsites, and a maximum of 4 tons per load has beenimposed to prevent artificial weighting of trucks withbrickbats and other heavy items. Vehicles are providedby contractors and payment made per vehicle, but corporationstaff are utilized for loading and unloading ofgarbage refuse. Surat’s experiences with private sectorparticipation have been extremely encouraging andthe city plans to continue private provision of solidFebruary 1999, Note No. 15waste services with the construction and operation ofa disposal plant.PSP in RajkotSix years ago, the city of Rajkot in western Gujarat tookaction to privatize a wide range of urban services. Theseincluded the maintenance of public toilets, street lights,gardens and the zoo; security; maintenance of drainagepumping stations; collection of toll taxes; and distributionof tax bills. Privatization was also pursuedfor street sweeping and collection and transportationof solid waste, with sweeping and collection contractedseparately from transportation. Though savings havebeen realized in both areas, overall results have beenmixed.Sweeping and collection was privatized in only two ofthe city’s 19 wards – only about 5% of total urban area– and cost savings have been estimated at about 15%.Transportation of solid waste, however, was privatizedin twelve of the 19 wards which generate about 80% ofthe city’s waste. Waste is transported to primary collectioncenters by contractors with the use of their ownvehicles, and payment is made on the basis of weight,determined at a public weighing machine. A maximumof 4 tons per vehicle was imposed to prevent overloadingof trucks and artificial weighting. A team of inspectorscross-checks weighing receipts, and in theevent of a discrepancy, the contractor is not paid fortransport of the garbage. Heavy penalties are also imposedfor repeated complaints. The rate paid for transportis determined through an annual contract auction.The Rajkot Municipal Corporation (RMC), however,has decided not to fully privatize its solid waste transportresponsibilities. Once the rainy season began, contractorsstopped work and demanded an increase inbenefits. In response the city threatened to terminatecontracts and take legal action, and the strike endedafter four days. But the RMC regards solid waste transportas an essential service and now finds it necessaryto maintain an emergency fleet of transport vehicles tomaintain daily services. Overall, the city has estimatedthat privatization of transport services has resulted ina cost savings of 23%.PSP in HyderabadThe Municipal Corporation of Hyderabad has privatizedsolid waste management in 58 areas of the city,covering 200,000 households. Contracts cover sweeping,collection and transport of waste to municipaldumping grounds, and tenders were invited from anybusiness, organization or individual with adequatecapability to perform the work. The tender scheduleidentified service areas to be covered and precisePage 2

INNOVATIVE APPROACHES TO SOLID WASTE MANAGEMENTboundaries; population; distance to be covered daily;estimated daily quantity of garbage; and the locationof the dumping grounds. Work is carried out on alldays of the year, including public holidays, and is tobe completed before 8 am on main streets and before11 am on all others.In response, offerors were asked to indicate the numberof workers and vehicles intended to be employed,types of equipment, identity and background of thework supervisor, and a monthly rate for undertakingthe work. Based on initial experience, a number of limitationsof this system have been identified, relating toinadequate monitoring and record keeping, as well asthe lack of a transport plan on the part of the contractor.In response, changes have been introduced whichare expected to improve the system, such as preparationof workplans and regular reporting to the sanitarysupervisor.Page 3The Surat Solid Waste Disposal ProjectThough Surat has been nationally recognized for itssuccess in management of solid waste, it is now facinga serious deficiency in its solid waste disposal capacity.Four of the garbage disposal sites for the city haverecently been filled to capacity, leaving only one remainingfacility. With support from the FIRE(D) Project, thecity is now moving forward with plans to construct anadditional disposal facility and it plans to implementthis project through PSP.As a first step, FIRE(D) helped the city to develop apre-qualification document through which it will identifyqualified firms or joint ventures with experience inthe operation of waste treatment and processing utilizingproven technology. In addition to providing abasic project description, the pre-qualification documentrequests information from interested providerson three weighted factors: financial capacity, technicalexperience and key personnel of the firm. This informationmust be provided in detail, and formats forsubmission are also included.The pre-qualification document is expected to be issuedin the very near future and will be followed by the issuanceof a detailed project description document.Once qualified firms are chosen, an RFP will be issuedto these firms, followed by proposal submission, evaluationand selection.The project is designed on a build-own-operate basis,and while the Surat Municipal Corporation will ensurea regular supply of a specified quantity of garbage, thecontractor must pay a price for the garbage as well asannual rent for the site. The concession will run for aperiod of 25 years.One of the advantages of private sector participation isthat it encourages the introduction of new technologies.In this case, options include pelletization, biomassenergy production and composting of organics.The pre-qualification document and RFP do providethat proposed technologies must be eco-friendly, butthe choice of technology is that of the contractor. Forthis reason, an appropriate site for the facility has beenidentified by the city which offers road access and connectionsto electricity and water supply.Strengthening the KolhapurSolid Waste Management SystemSolid waste generated in Kolhapur is disposed of inopen dumps, placing residents at the risk of soil andgroundwater contamination as well as decline in airquality. There is no organized system for storage ofwaste from shops, and though the Kolhapur MunicipalCorporation (KMC) has constructed two open garbagehouses in the market, vendors do not utilize thesefacilities consistently. So the KMC enlisted consultantsfrom the private sector to assist in upgrading its solidwaste management system over the next two decades.Throughout the process, FIRE(D) has been providingadvisory assistance to the KMC as well as AIC Watson,the consultants selected by the city.With technical assistance from the FIRE(D) Project, AICWatson carried out a field measurement program whichanalyzed the number of vehicles, trips to disposal sitesand quantities and composition of waste, and then usedthis information to produce system projections up tothe year 2021. Presently, about 60 percent of the 160tons-per-day (tpd) of solid waste generated is successfullycollected, transported and disposed of in designatedlocations, and the remaining waste is burned ordumped in open areas. By 2021, total waste generatedis expected to increase to 270 tpd. Based on these projections,a solid waste disposal and treatment projecthas been designed which will build on planned improvementsto the existing management system.The KMC has decided to implement this project withprivate sector participation on a Build-Operate-Transfer(BOT) basis. Under a 30-year concession agreement,the municipality will provide a long term lease for landto the selected operator, and the concessionaire will beresponsible to design, build, operate and maintain thefacility, and to finance these activities. Thus, the operatormust expect to generate profits, and two likelyoptions are controlled aerobic composting and biogasproduction. An RFP has been issued to pre-qualifiedbidders, and proposals are expected in early 1999. TheFIRE(D) Project will continue to provide technical assistanceto the city and its consultants throughout theevaluation and contracting process.February1999, Note No. 15FIRE(D)

INNOVATIVE APPROACHES TO SOLID WASTE MANAGEMENTDeveloping a Solid Waste Management Strategyfor TiruppurAs a demonstration city, the municipality of Tiruppurhas worked closely with the FIRE(D) Project onstrengthening of municipal administration, rangingfrom municipal accounting to identification of the city’sinfrastructure needs and priorities. The FIRE(D) Projecthas also assisted the partners of the Tiruppur Area DevelopmentProgram – The Tiruppur Exporters Association,Infrastructure Leasing and Financial ServicesLimited, and the New Tiruppur Area DevelopmentCorporation Limited – in the development of a watersupply and sewerage system which will benefit thecity’s growing industries as well as currently unservedconsumers in low income communities of the city andsurrounding villages.In light of growing solid waste management challengesin the city, the FIRE(D) Project sponsored a study tourfor municipal officials and elected women councilors,many of whom represent low income communities, tovisit innovative solid waste projects in Ahmedabad andSurat in 1997. Building on this experience, the Projectsponsored an assessment of Tiruppur’s solid waste situation.The assessment highlighted problems such as insufficientstorage and segregation of recyclables; lack of primarycollection; and irregular delivery of services suchas sweeping. It also pointed to the unscientific disposalof waste as an environmental health threat, and the inadequateadministrative capacity of the city. The assessmentresulted in recommendations for improvingsolid waste management in Tiruppur.During a two-day workshop in early 1998, a solid wastemanagement strategy was discussed and developed,and this strategy was unanimously approved by themunicipal council. The strategy adopted by the councilcalls for a reorganization of the city’s solid wastemanagement department and augmentation of its staffand also outlines a plan for disposal that utilizescomposting, new sanitary landfills and incineration.With an overall estimated cost of Rs. 8.77 crores, a newcomposting facility is to be developed by the privatesector on a build-own-operate basis at a cost of Rs. 4.5crores, and privatized management of an incinerationfacility for biomedical waste is planned. An Action Planfor implementing the strategy is now under development.~~~~~~~~~This Project Note is based on two FIRE(D) ProjectTechnical Reports: Private Sector Participation in SolidWaste Collection and Transportation by Chetan Vaidya;and Workshop on Solid Waste Management in Tiruppur,by P.U. Asnani.Page 4Indo-USFinancial InstitutionsReform and Expansion Project -Debt Market ComponentFIRE(D)The mission of the Indo-US FIRE (D)Project is tofoster the development of a commercially viableurban infrastructure finance system to financeimprovements in environmental services for allcitizens, including the urban poor. It is beingimplemented through four objectives:• Development of commercially viable urban environmentalinfrastructure projects in selecteddemonstration cities;• Development of a commercially viable urbanenvironmental infrastructure finance system;• Improvement of municipal financial managementas well as the administration of environmentalservices in demonstration cities;• Strengthening the capacity of public and privatesector professionals and technicians toachieve these objectives.This new approach, which emphasizes commercialviability, enables Indian cities and urban authoritiesto respond more effectively to the greatestneeds: increasing access to services and improvingservice levels. Significant benefits forthe poor, in particular, can be achieved througha commercial orientation.USAID is assisted in implementation of thisproject by Community Consulting International(CCI), a US firm with an office located in NewDelhi. This assistance is provided through a taskorder issued by USAID under its contract withthe International City/County Management Association(ICMA).Community Consulting International, IndiaE 3/4 Vasant ViharNew Delhi 110 054, IndiaTel: (91-11) 614-3551 or 614-9836Fax: (91-11) 614-1420 or 614-4480Regional Urban Development OfficeUSAID/New DelhiB-28 Institutional AreaNew Delhi 110 016, IndiaCommunity Consulting International1012 N Street, NWWashington, DC 20001-4297, USAFunded under USAID Contract#PCE-Q-00-95-00002, Task Order #810The Project Notes series is edited and producedby Laurie de Freese.