private sector participation in solid waste management of...
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Private Sector Participation in
Solid Waste Management of
Developing CountriesWorld Bank Presentation – 1818 Society Urban and Water Group,
and the
Social, Urban, Rural and Resilience Global Programs Unit
Presenter: Eng. Sandra Cointreau
February 2015
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Have I learned anything
over the years?• Nothing is as it seems.
• Too many lies, too much fraud, and too little correct data.
• There is no substitute for field work.
• Investigate, investigate, investigate.
• Check and double-check.
• Generate data and use it to compare technical and public versus private options.
• Maximize competitive forces.
• Structure the deal to be win-win.
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How is the Solid Waste
Sector Unique
• It is not a natural monopoly.
• It has many moving, portable and short-
lived equipment units.
• It’s services do not exclusively benefit the
people served.
• There are extensive regional and global
externalities.
• It is largely a public good.
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Solid Waste Activities
Suitable for PSP
• Planning and Management of Services.
• Primary Collection.
• Secondary Collection.
• Transfer of Waste.
• Treatment of Waste (for recycling and resource recovery).
• Disposal of Waste (and residuals from treatment).
• Remediation/Reclamation of Disposal Sites.
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Types of PSP Contractual
Agreements• Private Sector Outsourcing ( PSO)
– Licensing for Open Competition (customers choose service provider and pay for service)
– Franchises for Zonal Services (government chooses service provider and customers pay for service)
– Service Contracts for Zonal or Facility Activities (government chooses service provider and government pays for services)
– Management Contracts for Oversight Activities (government pays the contractor to plan and improve overall systems)
– Concession Contracts for Facility Activities (government allows service provider to develop revenues from recycling or resource recovery of wastes)
• Public/Private Partnerships (PPP):– Shared responsibilities, investments, costs and revenues (the
most complex contractual format – should only be used for major investment projects)
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Who is the Private Sector
• PSO Informal Sector (women’s associations, youth associations, waste picker associations, community groups, NGO’s).
• PSO Formal Sector (micro-enterprises; small, medium and large companies; joint venture companies).
• PPP Formal Sector (large companies formed into special purpose vehicles; possible to require them to include some informal sector subcontractors).
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Revenue Opportunities• Commodity markets for waste-derived materials.
– Paper, metal, glass, plastic, tires, used oil, C&D wastes, compost.
• Carbon trading. – renewable energy, composting, landfill gas flaring,
recycling.
• Renewable energy preferential pricing.– Biogas from biogas or landfills, waste-to-energy
incineration, gasification/pyrolysis.
• Preferential procurements for recycled content.
• Subsidized markets, such as subsidized compost purchases.
• User charges.
• Tipping fees (including possible landfill taxes).
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Essentials
• Well sorted waste inputs to match technology.
• Competition from unbundling of some system elements.
• Economies-of-scale from clustering waste sheds for some system elements.
• Stringent emission standards to avoid EHS impacts.
• Facility setback criteria to avoid EHS impacts.
• Proven practical technology choices.
• Extensive public involvement to obtain public support and cooperation.
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Risks
• Lack of public cooperation with system requirements.
• Lack of adequate public financing support to enable financial sustainability.
• Poor public awareness about advancements in waste technologies and reactive public opposition to new facilities.
• Global market demand and pricing fluctuations for recyclables and recovered resources.
• Political intervention.
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Common Mistakes
• Creating monopolies.
• Excluding the informal sector.
• Excluding women.
• Not achieving critical mass, economies-of-scale.
• Over specifying how the private sector should work.
• Not including performance-based rewards.
• Government wanting too big a share of the revenues.
• Not providing enough land, including buffer areas.
• Too little time for the private sector to mobilize. Poor hand-over from one service provider to another.
• Inadequate supervision of design, construction, and operation.
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PSP Option for Multiple Small Cities100,000 to 1 million people, 50 - 500 tonnes/day
City 1
multiple collection contractors
City 2
multiple collection contractors
City 3
multiple collection
contractors
City 4
multiple collection contractors
Processing and Landfill
Facility
concessionaire
Transfer Station 2
single contractor
Transfer Station 1
single contractor
Transfer Station 3
single contractorTransfer Station 4
single contractor
Processing Facility 1
single contractor
Processing Facility 2
single contractor
Processing Facility 4
single contractor
Processing Facility 3
single contractor
© Sandra Cointreau,
2014
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PSP Option for Multiple Small Cities100,000 to 1 million people, 50 - 500 tonnes/day
City 1
multiple collection contractors
City 2
multiple collection contractors
City 3
multiple collection contractors City 4
multiple collection contractors
Processing and Landfill
Facility
concessionaire
Transfer Station 2
single contractor
Transfer Station 1
single contractor
Transfer Station 3
single contractorTransfer Station 4
single contractor
© Sandra Cointreau,
2014
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PSP Option for Medium City1 to 5 million people, 500 – 4,000 tonnes/day
Waste Shed 1
multiple collection contractors
Waste Shed 2
multiple collection contractors
Waste Shed 3
multiple collection contractors
Processing and Landfill
Facility
concessionaire
Transfer Station 2
single contractorTransfer Station 1
single contractor
Transfer Station 3
single contractor
Processing
Facility 1
Processing
Facility 2
© Sandra Cointreau,
2014
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PSP Option for Large City5 to 10 million people, 4,000 – 10,000 tonnes/day
Waste Shed 1
multiple collection contractors
Waste Shed 2
multiple collection contractors
Waste Shed 3
multiple collection contractors
Waste Shed 4
multiple collection contractors
Processing and Landfill
Facility
concessionaire
Transfer Station 2
single contractor
Transfer Station 1
single contractor
Transfer Station 3
single contractor
Transfer Station 4
single contractor
Waste Shed 5
multiple collection contractors
Processing and Landfill
Facility
concessionaireTransfer Station 5
single contractor
© Sandra Cointreau,
2014
Processing
Facility
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Due Diligence
• Value for Money analysis.
• Enabling framework – regulations and economic instruments.
• Obtaining public support for the system changes and facility siting.
• Tender documents that enable competitive bidding –Level Playing Field.
• Adequate time for advertising and short listing qualified firms.
• Contract documents with Shared Risk Allocation.
• Performance measures linked to performance incentives.
• Well structured monitoring responsibilities and reporting.
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Private Sector Participation in
Solid Waste Management of
Developing Countries
For more Information, Contact:
Sandra Cointreau
www.sandracointreau.com