Financial and Economic Aspects of Faecal Sludge Management

Transcription

1 International symposium on Faecal Sludge Management (FSM) Policy Dakar May 9-12th 2006 Financial and Economic Aspects of Faecal Sludge Management Martin Strauss EAWAG / SANDEC Tel /

2 1 Cost for whom? 2 How to make cost comparable 3 Costing examples 4 Who should get paid for what? Contents 5 Savings + benefits of ifsm 6 Agronomic aspects 2

3 The problem + consequences 1 Cost for whom? Indiscriminate and illegal dumping Health risks and water pollution 3

4 1 Cost for whom? Collector/hauler: Household: cost for pit emptying (and reconstruction) Cost of vehicles and their O+M (incl. salaries) 4

5 FSTP holder/operator: cost for treatment plant construction, O + M 1 Cost for whom? Farmer: Cost of organic fertilizer and organic fertilizer transport 5

6 2 How to make cost comparable Financial cost e.g.: Price charged to household for pit emptying Economic cost Cost shaped to allow for comparison of treatment or management systems? 6

7 2 How to make cost comparable Cost elements: Capital (or investment) cost $ Annual O + M cost $ p. year Cost elements: Annualised capital cost $ p. year (~ amortization ) Annual O + M cost $ p. year Cost elements: Annualised capital cost $ p. ton TS per unit FS treated Annual O + M cost $ p. ton TS Systems not comparable Systems still not comparable Systems now comparable! 7

8 Comparing cost of FS treatment alternatives Annualised capital cost Annual O+M cost 3 Costing examples Drying beds Settling pond, Buobai Constructed wetlands Settling ponds Settling/ thickening tank cost [US$/t TS] Total annual cost Drying beds Settling pond, Buobai Constructed wetlands Settling ponds Settling/ thickening tank cost [US$/t TS] Drying beds Settling pond, Buobai Constructed wetlands Settling ponds Settling/ thickening tank cost [US$/t TS] 100,000 inhabitants 20,000 m 3 /yr t TS/yr 20 % uncertainty range 8

9 Comparing cost of FS treatment alternatives Example from Nam Dinh (2,500 m3 septage/yr ~ 50 t TS/yr) Treatment option Investment cost * O+M cost p. year Land required Other A Constructed wetlands Cap $ 23,200 O+M 1, m2 Best products O+M need low Plant care 3 Costing examples B Drying beds + C Settling / thickening + ponds Cap 24,350 O+M 2,010 Cap 24,100 O+M 6,180 (* Note: Cost of one mini tug = $ 24,000!) 290 m2 245 m2 Polishing treatment required O+M high Less pumping organic fertilizer volumin. O + M high 9

10 The challenge All FS to designated treatment or disposal site 4 Who should get paid for what? Septic tanks emptied at shorter intervals Pit emptying affordable 10

11 Honey suckers the mobile sewer system Sanitation = Business Sanitation = Business I can do it at low-cost! Private entreprises can do the job of bringing the shit to the site efficiently and affordably!

12 The solution: incentives and sanctions Reversing the money flux 4 Who should get paid for what? Transport and Truck capital cost Legend ~30 Administration, office cost, etc. Household (pit owner) stakeholder cost revenue money flow Jeuland (2002) and Steiner (SANDEC) 2002 O+M cost? (~10) Collection company ~30 Pit emptying fee ~15 ~45 FS delivery remuneration License charge Sanitation tax ~5 FS treatment plant operator ~50 Subsidy Authority Capital cost ~13 organic fertilizer sale (based on Kumasi, Ghana, 200 m 3 /d) Based on costing data from Ghana 12

13 Finding the best financial system The solution: financial incentives 4 Who should get paid for what? Truck capital cost: US$ 200 per month Transport (salaries and fuel): US$ 2 per truck of 8 m 3 FS Administration, office cost, etc.:? Collection company Pit emptying fee: US$ 0.75/m 3 FS Household (pit owner)? FS delivery remuneration: US$ 3 per truck of 8 m 3 FS License charge: US$ 25 per month and per truck Sanitation tax: US$ 0.6 per captia and per year (based on Kumasi, Ghana, 200 m 3 /d) Based on costing data from Ghana O+M cost: US$ 31,500 per year FS treatment plant operator Subsidy: US$ 75,000 per year Authority Capital cost: US$ 40,000 per year organic fertilizer sale: US$ 19,000 per year 13

14 Defining impacts and benefits 5 Health savings and benefits Population higher amenity (less odours, emptying affordable, etc.) Monetary valuation Better livelihood Higher productivity Improved FS Management Impact Health sector morbidity and mortality reduced Monetary valuation Saving on med. d di l treatment Environment less pollution Monetary valuation Water res. protected Focus on health 14

15 Estimating impact and benefits from reduced diarrhoea incidence 5 Health savings and benefits Assumption: improved FSM (i-fsm) Type of benefit Averted health treatment cost Gained days from less illness (productivity gain) Averted fatalities (productivity gain) 3 % reduction of morbidity from diarrhoea Savings and benefits in $ / ton TS AFRO-D (Ghana) SEARO-B (Thailand) AMRO-B (Argentina) Sum of benefits

16 Benefit-cost ratio Benefits and cost in $ p. ton TS: 5 Health savings and benefits Ghana Thailand Argentina Settling + stab. ponds Constr. wetlands + stabilization ponds Settling ponds + cotreatment with wastewater in ponds FS treatm. cost Haulage cost Disposal Total cost Total benefit Benefit-cost

17 Uncertainties 5 Health savings and benefits How much does i - FSM reduce diarrhoea incidence? How to value gained productivity? Reliability of input data (e.g. cost of 1 diarrhoea case)? Are there additional important cost and benefits? 17

18 Main questions How much would the organic fertilizer cost? Where can I buy organic fertilizer? 6 Agronomic aspects Ability and willingness-to-pay for the hygienically safe organic fertilizer Where and in what form do the farmers want to buy the organic fertilizer? What is the agronomic value of the organic fertilizer? 18

19 Willingness-to-pay (WTP) 6 Agronomic aspects Nam Dinh study (2001): - Farmers indicating that they do need organic fertilizer - Organic fertilizer from FS and org. MSW accepted - WTP depends on potential agron. benefit and distance to sales outlet - Tentative WTP max. 15,000 VND (~ $ 1) / 50 kg Kumasi (Ghana) study ( ): - Peri-urban veg. farmers wtp $ 3.0 / bag of 50 kg or $ 84 p. year - Urban staple crop farmer wtp $ 2.0 /bag of 50 kg or $ 10 p. year 19

20 Willingness-to-pay (WTP) 6 Agronomic aspects Nam Dinh study (2001): - Preferred: sale of organic fertilizer in 50 kg bags at coop outlets Agron. value: % of dry solid (recent field studies): - N: Ghana 0.5 Argentina 1.0 Thailand P 2 O Org. matter: