Waste Management in India and Experience with the Implementation of Projects based on Public Private Partnership (PPP) model
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1 Waste Management in India and Experience with the Implementation of Projects based on Public Private Partnership (PPP) model Sundeep Kumar, IL&FS Environmental Infrastructure and Services Limited IRRC Conference, September 5, 2016, Vienna 1
2 Decades of Improper Municipal Solid Waste Management Huge dumpsites which are full to capacity in large cities Considerable environmental pollution of air (burning) and ground water (leachate) Land for new disposal sites is not easily available due to urbanization and population pressure Protests from surrounding residents for setting up of a new MSW disposal site 2
3 Municipal Waste Generation India is home to 1.2 billion people of which 377 million live in urban areas (population of persons mostly in non agricultural pursuits) Current daily average Municipal Solid Waste (MSW) is about 0.40 kg per person for cities with over 100,000 population. No. of cities Population (million 2011) Estimated MSW Generation (Metric Tonne/day) Top 100 cities ,000 Other cities with population >100, ,000 Total ,06,000 3
4 Urbanization Trend There is a steady increase in the urban population driven by low rural incomes and increases in population. Census Urban Population Total Population Percentage urban Year (million) (million) population to total Source: Govt. of India Census for 1991, 2001, 2011 Infrastructure in cities is unable to cope with this influx. The slum population in Indian cities has grown from 29 million in 2001 to 39 million in 2011 It is projected that the India s Urban Population in 2030 will be 590 million (Source : McKinsey Global Institute 2010) 4
5 Waste Characteristics The Last comprehensive study on MSW Characteristics was carried out by National Environmental Engineering Research Institute (NEERI), published in The Calorific Value was estimated between 800 to 1000 Kilocalories/kg on a dry weight basis Presence of a large number of unorganized waste pickers who collect the recyclable materials and sell the same Significant (25 %) quantities of inert material, moisture and lower quantities of plastic and paper all combine to yield a low calorific value of the MSW (typically less than 1000 kcal/kg LHV). The composition and characteristics can vary significantly across cities depending on the size of city and climatic conditions 5
6 Municipal Laws and Structure Urban areas are governed by Municipalities as per the Constitution of India. Governed by elected members. The day to day running done be officers (non voting) with specialized knowledge Waste Management is one of the functions and responsibilities The State Legislature makes laws to: authorise a Municipality to levy, collect and appropriate taxes, duties assign to a Municipality such taxes, duties, etc. levied and collected by the State Government provide grants-in-aid to the Municipalities from the Funds of the State; The State Finance Commission reviews the finances of the Municipalities and recommends principles for taxation and financing of the Municipalities 6
7 Legal Provisions for MSW Management MSW Management is governed by the Environment (Protection) Act, 1986 (29 of 1986) The Ministry of Environment and Forests (MoEF) under the Central Government issued the Municipal Solid Waste (Management and Handling) Rules, 2000, management of Solid Waste, which were applicable to all Municipalities. In 2016 the MoEF issued Solid Waste Management Rules, 2016 superseding the earlier rules The National Green Tribunal (a special national court set up to deal exclusively with environmental matters) is also propelling Municipalities to implement the MSW rules and bring about a change in the MSW management in the Country 7
8 History: Collection Operations Historically, the Collection operations were performed by the Municipal Authorities The performance was largely below par due to: budget constraints and use of high cost and inefficient manpower Over time, increasing number of collection contracts have been awarded to private players. Currently most of the large Municipalities award short to medium term contracts to private parties for collection Street Sweeping and drain cleaning is generally being done by the Municipalities on their own 8
9 Status: Collection Operations Generally the collection efficiency ranges between 70 to 90 % in major metro cities whereas in several smaller cities the collection efficiency is below 50%. It is also estimated that the Urban Local Bodies spend about Rs.500 to Rs.1500 per tonne for collection, transportation, treatment and disposal. (Planning Commission Estimates) About 60-70% of this amount is spent on street sweeping and waste collection, 20 to 30% on transportation and less than 5% on disposal of waste In terms of visible performance there is a great scope for improvement. Accumulation of waste at secondary collection points is common leading to unhygienic conditions within the cities Lack of transparent performance monitoring systems 9
10 History: Processing Operations Currently only 5 % -10 % of the total MSW generation is actually processed In late 1970s ten mechanical compost plants were set up by Government but later closed down for various reasons, including lack of maintenance Some key examples of the efforts of the Government were: The Okhla Compost Plant in Delhi was set up in The Plant ran for about 10 years and was finally shut down on account of operational difficulties. Subsequently this plant was taken over by a Private Operator and the Plant is now functional. In 1986 a Waste to Energy Plant was set up in Timarpur in Delhi using imported technology. The plant was subsequently shut down due to operational issues arising out of the low calorific value of the waste vis a vis the design. A 5 MW bio methanation plant was set up in Lucknow in 2003 for generating gas from MSW. This plant failed on account of low biodegradable content in the MSW supplied 10
11 History: Processing Operations Waste to Energy In the past Waste to Energy projects by both Government and Private have largely been a failure (Source Planning Commission) Reason Timarpur Vijaywada Hyderabad Lucknow Kanpur Lack of due diligence on the part of investor and public sector. Non-supply of committed quantity / quality of waste to the plant by the municipal authority Presence of inerts - dust & C and D waste in MSW delivered for processing, making the operations difficult and very expensive. No market for sale of compost / RDF Public outcry against the location of the plant Lack of financial viability of the project Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA NA NA NP Yes Yes NA NA Yes NA Yes NA NA NA Yes 11
12 Status: Processing Operations Currently there are several Private Sector Companies involved in the processing of MSW and generally work under long term concessions from the Municipalities under a Build Own Operate Transfer model. The data for the top 8 private companies is as under: (source: Company Websites) Composting Plants: 59 nos (About 50 % of such plants have been shut down) Waste to Energy Plants: 23 nos (mostly just awarded. Currently only one Waste to Energy plant (JIFT Urban Infrastructure) is operational in India. Two Plants are under commissioning (IL&FS and Essel) and three plants are under construction (IL&FS, Essel and Ramky)) Integrated (collection and composting): 13 12
13 Status: Scientific Landfilling Scientific Landfilling of MSW or processing rejects is a major weakness Only a few cities have a scientific landfill (Delhi and Hyderabad are examples) Some exploratory efforts are now being made to reclaim and remedy existing dumpsites and create scientific landfill for the rejects 13
14 History: JnNURM The entry of private players in MSW sector was encouraged by the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) which was launched by Government of India in 2005 to provide financial support to Municipalities for developing urban infrastructure JnNURM envisaged an investment of Rs.1,000,000 million over 7 years from to with a Central Government share of Rs. 660,000 million (fur urban infrastructure including MSW management) JnNURM covers 65 cities and towns. Broadly, to be eligible for grant (upto 40 % of project cost) required a minimum 30 % of project cost contribution from the Private Sector. The balance funding by the State Government or through other sources With funds under JnNURM and related Schemes. 46 MSW projects in 20 states were approved at a cost of Rs 19,250 million and Rs 6,940 million released. Only 19 of the 46 projects supported are operational. The support enabled some improvements in MSW management in certain states and cities but much remains to be done. (Source: Planning Commission) The substantial investments made under JnNURM have failed to have the envisaged impact of the MSW management in the country 14
15 Reasons for Lack of Success of MSW Management and PPP model Lack of expertise with the Municipalities to tender, evaluate technology, and monitor PPP contracts New entrants from the Private Sector rushing into this upcoming sector did not possess the necessary expertise or financial strength Reduction in prices of Carbon Credits The above has resulted in: Award of tenders at very low and unsustainable bid prices Such un remunerative prices has contributed to closure of processing facilities For collection operations it has resulted in inadequate collection of waste Poor segregation of MSW and mixing of street sweeping and construction waste to MSW have made processing operations more difficult Lack of seriousness / will of the Municipalities to implement rules and lack of penalties on Municipalities or Private Operators Poor Municipal Financial Situation 15
16 Recent Developments In 2014 the Prime Minister of India launched the the Swachh Bharat (Clean India) Mission (SBM) for a period of 5 years i.e until 2019 The Mission objectives include Elimination of open defecation, and Scientific Municipal Solid Waste Management To effect behavioural change regarding healthy sanitation practices Generate awareness about sanitation and its linkage with public health Capacity Augmentation for Urban Local Bodies and To create an enabling environment for private sector participation in capital expenditure and operation and maintenance 16
17 Recent Developments...2 The estimated cost of implementation of SBM is Rs. 620,090 million (over 5 years). The Government of India (GoI) share as amounts to Rs. 146,230 million (as grant). In addition, a minimum additional amount of Rs. 48,740 million shall be contributed by the States as State/ULB share. The balance funds is proposed to be generated through various other sources of fund including Private Sector Participation and User Charges SBM has led to a steep increase in the activities related to MSW Processing including several Waste to Energy Projects. The Government of India has also launched the Smart City program for100 cities where A focussed program to convert them into modern and smart cities. Government of India funding is available for this program. Since MSW management is a key aspect for any smart cities, this smart city program will also help in better MSW management 17
18 Recent Developments.3 The Central Electricity Regulatory Commission (CERC) has fixed a preferential tariff for power generated from Waste to Energy. The Tariff Rate is: at Rs 7.90/Kwh for RDF based Waste to Energy Rs 7.04/Kwh for MSW based Waste to energy Although the Tariff for a specific Project is to be set by the State Electricity Regulatory Commission certain States have adopted the CERC tariff while bidding out projects. The bidding parameter in such cases is the tipping fee For support composting operations the Government has announced a subsidy of Rs 1500/ tonne of compost 18
19 Expectations for the Future It is expected that the momentum gained in MSW Management through the SBM will continue and more Municipalities will come out with proposals to invite the Private sector in MSW Management However, the success will be determined by the ability of the Municipalities to build up their competence levels and shore up their finances through appropriate taxes and user charges. The Private Sector too will need to be responsible for doing a quality job and bidding in a responsible manner Strong performance monitoring systems are necessary 19
20 Thank You 20
21 Diese Präsentation erfolgte im Rahmen der Veranstaltung: IRRC IRRC WASTE-TO-ENERGY 5. und 6. September 2016
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