Technical Assistance Consultant s Report. NEPAL: Integrated Urban Development Project (Financed by the Japan Fund for Poverty Reduction)

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1 Technical Assistance Consultant s Report Project Number: P July 2012 NEPAL: Integrated Urban Development Project (Financed by the Japan Fund for Poverty Reduction) Prepared by Shafiul Azam Ahmed Ashok Ratna Tuladhar For Government of Nepal Ministry of Physical Planning & Works Department of Urban Development and Building Construction This consultant s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project s design.

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3 Government of Nepal Ministry of Physical Planning & Works Department of Urban Development and Building Construction PREPARING THE INTEGRATED URBAN DEVELOPMENT PROJECT (PPTA 7727 NEP) FINAL REPORT JULY 2012 Shafiul Azam Ahmed Ashok Ratna Tuladhar COPYRIGHT: The concepts and information contained in this document are the property of ADB & Government of Nepal. Use or copying of this document in whole or in part without the written permission of either ADB or Government of Nepal constitutes an infringement of copyright.

4 TABLE OF CONTENTS Page 1. INTRODUCTION Background Objectives of the Study Expected Results/Outputs Scope of Work Approach & Methodology Work Plan and Input Schedule ANALYTICAL ASSESSMENT OF CURRENT SWM PRACTICES AND TECHNICAL CAPACITY OF THE PROJECT MUNICIPALITIES Review of Existing Documents Consultation with Project Municipalities Current SWM Practices and Technical Capacity Nepalgunj Municipality Siddharthanagar Municipality Janakpur Municipality INVOLVEMENT OF PRIVATE SECTOR IN SWM Existing Situation in Nepal Background Solid Waste Management Act, Some Existing Arrangements in Various Municipalities Analysis of Existing Situation in Project Municipalities International Experience Background Examples from Selected Countries i

5 3.3 Summary of Strengths and Weaknesses of Different Models RECOMMENDATION ON THE SCOPE OF OPERATIONAL SERVICES FOR THE LANDFILL CONTRACTOR Operational Functions of the Proposed SWM System Collection Service Operation of Transfer Station Secondary Transport Processing and Final Disposal Management Analytical Review on the Scope of Operational Services for the Landfill Contractor Duration of Operational Services Financial Arrangement OUTPUT SPECIFICATIONS Introduction Key Aspects for Good Performance and Operational Guidelines THE DAILY AREA OF WORK SHOULD BE KEPT AS SMALL AS POSSIBLE AND NO MORE THAN 1 HECTARE THE SURFACE OF NEWLY DEPOSITED WASTE SHOULD BE COVERED EVERY DAY WITH 15 CM THICK SOIL OR SIMILAR MATERIAL NO Performance Indicators and Monitoring ASPECT...69 BASIC PERFORMANCE INDICATOR...69 MONITORING FREQUENCY...69 MEANS OF VERIFICATION...69 ASPECT...70 BASIC PERFORMANCE INDICATOR...70 MONITORING FREQUENCY...70 MEANS OF VERIFICATION Payment Mechanism in the Contract COST ESTIMATES Current Costs of SWM Current Cost of SWM Service in Nepalgunj Municipality S. 74 ii

6 N Current Cost of SWM Service in Siddharthanagar Municipality Current Cost of SWM Service in Janakpur Municipality S. 76 N Costs under Proposed Arrangement Unit costs of Operational Services Base Costs of Contractual Arrangement Comparison of Costs: Current Practice vs. Proposed Arrangement RELEVANT SECTIONS OF BIDDING DOCUMENTS ACTION PLAN FOR MUNICIPALITIES INVOLVEMENT OF SWMTSC ANNEXES: Annex-1: Annex-2: Annex-3: List of Key Persons Consulted Unit Costs Calculation of Operational Services Quality Standards for Environmental Monitoring at the Landfill Site iii

7 LIST OF TABLES: Table 1: Concise Methodology... 4 Table 2: Summary of Existing Situation in Project Municipalities...12 Table 3: Issues on Private Sector Involvement in SWM...13 Table 4: Municipal SWM Generation Stream ( ) - Nepalgunj Municipality...21 Table 5: Condition of SWM Vehicles and Equipment in Nepalgunj Municipality (Jan 2012)...23 Table 6: Municipal Staffing in SWM Service in Nepalgunj Municipality (Jan 2012)...23 Table 7: Municipal SWM Generation Stream ( ) - Siddharthanagar Municipality...24 Table 8: Condition of SWM Vehicles/ Equipment in Siddharthanagar Municipality (Jan 2012)..26 Table 9: Municipal staffing in SWM service in Siddharthanagar Municipality (Jan 2012)...26 Table 10: Municipal SWM Generation Stream ( ) - Janakpur Municipality...27 Table 11: Condition of SWM Vehicles/Equipment in Janakpur Municipality (Jan 2012)...29 Table 12: Municipal Staffing in SWM Services in Janakpur Municipality (Jan 2012)...29 Table 13: Summary of Strengths and Weaknesses of Different Models of PSP in SWM...46 Table 14: Proposed Contractual Arrangement...53 Table 15: Proposed Service Charges, Tipping Fees for the Operational Services (2016)...60 Table 16: Key Aspects for Good Performance and Operational Guidelines...62 Table 17: Performance Monitoring for Package A...69 Table 18: Performance Monitoring for Package B...70 Table 19: Operational Expenditure/ Revenue of SWM Service in Nepalgunj Municipality...74 Table 20: Operational Expenditure/ Revenue of SWM Services in Siddharthanagar Municipality...75 Table 21: Operational Expenditure/ Revenue of SWM Service in Janakpur Municipality...76 Table 22: Estimated Base Costs of Contractual Arrangement- Management Support to Package A (2016)...78 Table 23: Estimated Base Costs of Contractual Arrangement- Management Support to Package A and Total Service of Package B (2016)...79 LIST OF FIGURES Figure 1: Work Plan... 8 Figure 2: Input Schedule... 9 Figure 3: Typical Flow Diagram of Municipal SWM...50 iv

8 LIST OF ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank asl above sea level BOO Build-own-operate BOOT Build-own-operate-transfer BOT Build-operate-transfer BSMC Biratnagar Sub-Metropolitan City CBO Community-based organization CEO Chief executive officer CKV Clean Kathmandu Valley A JICA study project DBO DSC Design-build-own Design and supervision consultant DUDBC Department of Urban Development & Building Construction DWSS Department of Water Supply and Sanitation EA Executing agency EO Executive officer EPA Environment protection Act EPR Environment protection rule FY GESI GIS GoN Fiscal Year Gender Equity and Social Inclusion Geographic Information System Government of Nepal GTZ German Agency for Technical Cooperation HH HRD Household Human Resource Development HW Hazardous waste HWM Hazardous waste management ICB International competitive bidding INGO International non-governmental organization IPT Integrated property tax IS International shopping ISWM Integrated solid waste management IUCN International Union for Conservation of Nature IUDP Integrated Urban Development Project JICA Japanese International Cooperation Agency KMC LFG LFS Kathmandu Metropolitan City Landfill gas Landfill site lpcd litres per capita per day LSGA LSMC Local Self Governance Act Lalitpur Sub-Metropolitan City v

9 MIS MLD Management information system Ministry of Local Development MoE Ministry of Environment MoF Ministry of Finance MOU MPP Memorandum of understanding Municipal periodic plans MPPW Ministry of Physical Planning and Works MSWM Municipal solid waste management MuAN Municipal Association of Nepal NCB National competitive bidding NBSM NGO Nepal Bureau of Standards and Metrology Non-governmental organization NPC National Planning Commission NPR o&m PCB PCO Nepalese Rupee Operation and maintenance Polychlorinated Biphenyls Project coordination office PIU Project implementation unit PPP Public-private partnership PPPUE Public-private partnership for urban environment PPTA Project preparatory technical assistance PSC Project steering committee PSP Private sector participation RFP 3R SLF Request for proposal Reduce-reuse-recycle Sanitary landfill SWM Solid waste management SWMRMC Solid Waste Management and Resource Mobilization Center SWMTSC Solid Waste Management and Technical Support Center TA Technical assistance TDF Town Development Fund TLO Tole and laneorganization TOR Terms of reference TS Transfer station UN United Nations UDLE USEPA VDC VOC WM WSTFC Urban Development Through Local Effort United States Environment Protection Agency Village Development Committee Volatile Organic Compound Waste Management Water Supply Tariff Fixation Commission vi

10 1. INTRODUCTION 1.1 Background 1. The proposed integrated urban development project (IUDP) is expected to improve effective, efficient and reliable delivery of municipal infrastructure and services with expanded outreach and inclusiveness in project municipalities of Dharan, Janakpur, Nepalgunj, and Siddharthanagar. After its preparatory works, the loan and grant factfinding mission by ADB was fielded in August-September 2011 for this project and its scope was finalized. In accordance with the priorities of each project municipality, integrated urban environmental improvement programmes including surface-water drainage systems, solid waste management facilities, and urban roads and lanes will be implemented in Janakpur, Nepalgunj, and Siddharthanagar municipalities. Whereas in Dharan municipality, a water supply development subproject will be implemented. 2. According to the modality of IUDP, each of the municipalities will establish a project implementation unit (PIU), which will take the lead in project implementation, under the overall supervision and guidance of the project coordination office (PCO) in the Department of Urban Development and Building Construction (DUDBC) of the Ministry of Physical Planning and Works. 3. Regarding the solid waste management component, which is of vital importance for the improvement of urban environment, it was realized that immediately after the development of all necessary infrastructure (construction of all physical facilities including sanitary landfill site for proper final disposal management together with appropriate recycling and resource recovery facility such as a compost plant, and procurement of equipment and vehicles, etc.), the municipalities may not be capable of properly operating the facilities to the expected level. In that case, the assets coming under the ownership of the municipalities after the project period may even change into liabilities. With due consideration of these concerns, a general agreement was reached during the fact-finding mission that the civil works contract for developing the landfill site should include the operational management service part (including landfill operation) for some definite period to ensure effective and efficient operation of the total solid waste management system, so that the municipalities shall get an opportunity during this period to learn more and improve its technical capacity to manage the total SWM service thereafter in a sustainable manner. 4. Under these backgrounds, it was realized that an additional support is required to specifically formulate an appropriate contractual arrangement for operational management service by the civil works contractor of the landfill site development. An international and a national consultant was engaged for this purpose to take into account the current practice and technical capacity of each project municipality, and prepare necessary documents to assist the PIUs. This report is prepared by the consultants as part of their assignment. 1

11 1.2 Objectives of the Study 5. The general objective of this assignment is: To assist project municipalities in formulating appropriate contractual arrangements for effective and efficient SWM operation services which, after review and finalization by PIUs and DSCs, can be included in the civil work contracts for development of sanitary landfill site. 6. The specific objectives (purposes) of this assignment are: 1) To draft appropriate contractual document for an effective and efficient SWM operation service by defining the scope of services, duration, and financial arrangement; including key performance indicators and targets for performance-based management contracts; and preparing cost estimates of the proposed arrangement in comparison to the current costs of SWM. 2) To draft relevant sections of bidding documents (including contract documents) for further use by the PIUs and design and supervision consultants for finalization. 3) To make specific recommendations for smooth transition to the proposed arrangement 1.3 Expected Results/Outputs 7. The expected results of this assignment shall be: - Available documents and information (particularly the PPTA consultant s report) reviewed and municipal staff consulted on the current solid waste management practice and technical capacity of the project municipalities of Janakpur, Nepalgunj, and Siddharthanagar; - Some arrangements involving private sector in Nepal (such as Kathmandu Valley, Biratnagar) and in countries with similar status reviewed, and strengths and weaknesses identified; - Scope of services (e.g. primary collection, secondary collection, transportation, final disposal, resource recovery, or a combination of these), duration and financial arrangement (service charge, tipping fee, etc.) assessed and defined; - Key performance indicators and targets for the performance-based management contracts developed; - Cost estimates of the proposed arrangement in comparison to the current costs of solid waste management prepared; 2

12 - Relevant sections of bidding documents (including contract documents) for further use by the PIUs and DSCs (to be engaged by PIUs) drafted; - Necessary actions (implementable and time-bound) to be taken by the municipalities and others, if any, for smooth transition to the proposed arrangement identified; and - Findings and recommendations to the key stakeholders in the municipalities and the government for obtaining a general agreement presented. 8. The outputs of this study were presented in the following reports (deliverables) as per TOR in such a way that it can be utilized to take decisions for further necessary actions: 1. Preliminary draft report 2. Draft report 3. Final report 1.4 Scope of Work 9. The scope of work of this assignment includes the following tasks: Task 1: Review available documents and information (particularly the PPTA consultant s report) and consult with municipal staff on the current solid waste management practice and technical capacity of solid waste management in the project municipalities of Janakpur, Nepalgunj, and Siddharthanagar. Task 2: Review some arrangements involving the private sector being practiced in Nepal (such as Kathmandu Valley, Biratnagar) and in countries with similar status and identify strengths and weaknesses. Task 3: Assess and define the scope of services to be performed by the civil works contractor for landfill site development, including the scope of services (e.g. primary collection, secondary collection, transportation, final disposal, resource recovery, or a combination of these), duration of services, and financial arrangement (service charge, tipping fee, etc.). Task 4: Develop key performance indicators and targets for performance-based management contracts. Task 5: Make cost estimates of the proposed arrangement in comparison to the current costs of solid waste management. Task 6: Draft relevant sections of bidding documents (including contract documents) for further use by the PIUs and DSCs for working out details. 3

13 Task 7: Identify necessary actions (implementable and time-bound) to be taken by the municipalities and others, if any, for smooth transition to the proposed arrangement, Task 8: Present the findings and recommendations to the key stakeholders in the municipalities and government for obtaining a general agreement, and Task 9: Coordinate with the Solid Waste Management Technical Support Centre (SWMTSC) to keep them aware and involved with the process. 1.5 Approach & Methodology 10. Our approach for this assignment includes a mix of desk review of secondary information, field observation, discussion and consultation with practitioners, and interaction with policymakers. Our analysis and recommendations are based on the strengths and weaknesses of the existing practices and understanding gained from the above methods. 11. A concise methodology for the specific tasks is presented below (Table-1). Table 1: Concise Methodology Tasks 1a. Review of existing documents and information (particularly the PPTA reports). 1b. Consultation with municipal staff on the current SWM practice and technical capacity. 2a. Review private sector participation in Nepal, particularly in SWM sector. 2b. Review private sector participation in other countries with similar status. 2c. Identify strengths and weaknesses of various models. 3. Assess and define the scope of operation for the landfill contractor including: (i) scope of services (ii) duration of services (iii) financial arrangement Methodology Desk review of relevant literature and extraction of pertinent information. Field trip to the three municipalities to hold meetings with relevant staff. Use of checklists to guide the discussions. Desk review of relevant literature and extraction of pertinent information. Collection and review of reports from various countries with similar status, extraction and analysis of pertinent information. Analyse compiled information and present the strengths and weaknesses of the models in a tabular form. Field visit to gain understanding of the present situation, discussion with municipal officials; analysis of options, and selection of the best options based on the collected information and professional judgement. 4

14 Tasks 4. Develop output specification including (i) performance indicators and targets (ii) performance measurement system (iii) payment mechanism. 5. Make cost estimate of the proposed arrangement and compare with current costs of SWM service. 6. Draft relevant sections of bidding documents following the scope and limitation of this study. 7. Prepare action plan for the project municipalities for transition to the proposed arrangement with steps that are specific, implementable and time-bound. 8. Present findings and recommendations to key stakeholders in the project municipalities and government to obtain general agreement. 9. Coordinate with the SWMTSC to keep them aware and involved with the process. Methodology Review of existing specifications from Nepal and other countries, selection of appropriate indicators and targets based on the technical capacity of the municipalities, alignment with present monitoring system, propose suitable payment mechanism, consultation with stakeholders and finalization of the specifications. Review of cost estimates by PPTA consultants, collection of standard rates, selection of cost lines, determination of costs. Review of existing procurement documents, preparation of specifications and technical matters in conformity with procurement guidelines. Listing of various necessary implementable action steps, sequential ordering of the steps, assigning realistic implementation time, consultation with key stakeholders and finalization. Organize dissemination meetings in municipalities and/or in Kathmandu to present the findings and recommendations, solicit views from the audience, incorporate comments and suggestions, finalize the recommendations. Regular sharing of information with the SWMTSC and ensuring their participation wherever appropriate. 1.6 Work Plan and Input Schedule 12. The proposed work plan with time frame for carrying out activities/sub-activities in details till completion of this assignment is presented in Figure 1. The input schedule is shown in Figure Time frame for submission of the reports (deliverables) of this study was (as per TOR) as follows: 0. Field visit reports shall be submitted by the week following respective field visits. 1. Draft preliminary report shall be submitted by 30 th November, Draft report shall be submitted by 31 st December, Final report shall be submitted by 7 th February, 2012 after receiving comments if any, on the draft report. 14. The preliminary draft report prior to the draft report included three chapters as follows: 5

15 1) A chapter on Introduction describing A brief background on the proposed integrated urban development project (IUDP) in general, and the importance and significance of this assignment for effective and efficient operational SWM services in the project municipalities of Nepalgunj, Siddharthanagar and Janakpur in particular; Objectives (general objective and specific objectives) to be achieved by the study under this assignment; Expected results/ outputs of the study, including deliverables to be submitted in the form of reports; Scope of work and activities in detail as defined by the TOR provided; Approach and methodology adopted for performing the defined activities and sub-activities to obtain the expected results/outputs; and Proposed work plan with timeframe and input schedule of consultants for completion of this assignment following the TOR. 2) A chapter on Analytical Assessment of Current SWM Practices and Technical Capacity in the Project Municipalities describing A review of available documents and information (particularly the PPTA consultant s report) related to this assignment; Consultation with municipal staff on problems and issues of current SWM services provided by the municipalities in general, and on views/opinions and suggestions for private sector involvement in SWM service in particular; and Municipality-wise analytical situation on current SWM practices and technical capacity based on the review of related PPTA consultant s report and observations during the first field visits. 3) A chapter on Involvement of Private Sector in Solid Waste Management describing Existing situation of private sector participation in SWM services in Nepal with a background on initiatives and problems faced, policy and legislative measures for its promotion in future, and some existing arrangements with strengths and weakness; International experiences in some other similar countries; and Summary of strengths and weaknesses of different possible models. 6

16 15. A draft report was prepared after 1) incorporating comments/suggestions on this preliminary draft report, 2) assessing and defining the scope of operation services, 3) developing output specifications, the performance measurement system and payment mechanism etc. The draft report mainly included, in addition to the above 3 chapters, other four chapters as follows: 4) A chapter on Recommendations on the Scope of Work for the Civil Contractor of Landfill Construction describing Scope of operational services; Duration of operational services; and Financial arrangements. 5) A chapter on Output Specifications describing Performance indicators and targets; Performance measurement and monitoring system; and Payment mechanism in the contract. 6) A chapter on Cost Estimates describing Currents costs of SWM service rendered in the municipality ; Costs under proposed arrangement; and Discussion on benefits and disadvantages. 7) A chapter on Relevant Sections of Bidding Documents following the scope and limitation of this study. 16. The final report has been prepared after 1) incorporating comments/suggestions on the draft report, 2) assessing and defining the scope of operation services, 3) developing output specifications, the performance measurement system and payment mechanism etc., and 4) 2nd field visit in the project municipalities for the purpose elaborated in the work plan. This report mainly includes, in addition to the above 7 chapters, two more chapters as follows: 8) A chapter on Action Plan for Municipalities, mainly focusing on smooth transition to the proposed arrangement, and 9) A chapter on Involvement of SWMTSC following the consultants coordination with the SWMTSC for its involvement in this study process and describing its expected follow-up supports to the project after completion of this study. 7

17 Figure 1: Work Plan Shafiul AHMED and Ashok Ratna TULADHAR S. ACTIVITIES/ MONTHS (2011/12) N. SUB-ACTIVITIES October November December January February 1 Meeting with PCO/DUDBC, SWMTSC/MLD for consultation on scope of work and work plan. 2 Review of: - relevant documents/ information, particularly PPTA reports, - private sector involvement in Nepal and in similar other countries 3 Submission of work plan and preparatory work for field visits 4 Field visit-1 for meeting with municiapl staff to clarify objectives & scope of work and field observation of current SWM service in - Siddharthanagar - Nepalgunj - Janakpur, and respective field visit reports 5 Assess & define scope of operation service 6 Develop output specification, performance measurement system, payment mechanism 7 Cost estimate of proposed arrangement compared to current costs of SWM 8 Drafting of relevant sections of bidding documents for detailing by PIU/DSC 9 Identification of necessary municipal actions for smooth transition to the proposed arrangements 10 Field visit-2 before FR for meeting with municiapl staff to clarify costs, bidding documents, necessary municipal action plan etc. in Siddharthanagar, Nepalgunj and Janakpur; and respective field visit reports 11 Presentation of findings & recommndations to key stakeholders in the municipalities & government 12 Preparation & submission of reports 12.1 Preliminary draft report 12.2 Draft report 12.3 Final report Full-time (Field) Input Home Office (Intermittent) 8

18 Figure 2: Input Schedule NAME OF EXPERT/ MONTHS (2011/12) TOTAL PERSON-DAY INPUT No. POSITION October November December January February HOME FIELD TOTAL INTERNATIONAL Shafiul AHMED Solid Waste Management Specialist 12 NATIONAL Ashok Ratna TULADHAR 21 2 Solid Waste Management Specialist Full-time (Field) Input Home Office (Intermittent) 9

19 2. ANALYTICAL ASSESSMENT OF CURRENT SWM PRACTICES AND TECHNICAL CAPACITY OF THE PROJECT MUNICIPALITIES 2.1 Review of Existing Documents Background 17. Nepalgunj, Siddharthanagar and Janakpur are secondary towns of Nepal. The estimated and projected population of the cities are given in Table 2. Out of the three project municipalities, only Janakpur is expected to cross 200,000 population by The present generation of solid waste is only about 27 ton/d for Nepalgunj and Siddharthanagar, and 44 ton/d for Janakpur. However, with the growth of the cities the amount of solid waste is expected to increase several times by The projected solid waste generation in 2031 is 80 ton/d, 96 ton/d and 157 ton/d for Nepalgunj, Siddharthanagar and Janakpur respectively. Collection 18. The present collection of solid waste in the cities is not adequate. The reported collection efficiency ranges between 41% and 79% as shown in Table 2 below. The actual efficiency, if properly accounted, could be lower. As the cities grow in population with consequent increase in waste generation, the collection efficiency must be improved to maintain a clean and healthy environment. 19. At present the municipalities are mostly collecting solid waste from main roads. House-to-house collection is available in some parts of the cities only. 20. There is no segregation of waste. Biodegradable waste is mixed with other types of waste including hazardous or infectious waste. 21. Indiscriminate throwing of waste on roads or into drains is commonly practiced. There is also a lack of synchronization between collection and throwing of waste causing piles of uncollected waste to remain on the streets for a long time. Drains are clogged with solid waste causing stagnation and breeding habitat for disease vectors. Secondary Transport 22. Municipalities generally provide secondary transport of wastes from main streets to the final dumping grounds. Trucks and tractor- trailers are used for this purpose. In Siddharthanagar, the municipal trucks also serve smaller lanes in parts of the city. In Nepalgunj, CBOs manage secondary transport in parts of the city. Like primary collection, the secondary collection service also requires improvement. The fleet of vehicles will need upgrading in response to increase in waste generation and operation of landfill sites. Final disposal 23. Open dumping of solid waste is the current practice in all three cities. This poses a serious threat to the environment and public health. Properly designed and 10

20 operated sanitary landfills are required for the cities. In this regard, Nepalgunj and Siddharthanagar municipalities are in the process of acquiring land from private owners, while Janakpur municipality is considering a piece of land owned by a religious society (guthi). Recycling 24. The private sector is active in recycling paper, plastic, glass and metal in all three cities. But this sector is not formalized. Further encouragement and support to this sector will improve recycling practices. In contrast, recycling of organic waste is not sufficient. Segregation of waste into organic and inorganic parts followed by recycling of the organic part through composting or bio-methanation will improve solid waste management. This will reduce the volume of waste for landfilling and produce valuable products like compost or biogas. Private Sector Participation 25. While the private sector is active in recycling, it is not yet active in terms of providing service. In limited areas of the cities, some NGOs/CBOs provide primary collection service, and even manage secondary transport service. However, the full utilization of the private sector s potentials is yet to be harnessed. Initial attempts to engage the private sector in delivering SWM service met with some problems. The reasons include inexperience of the private sector and limitations of the municipalities. The municipalities, however, remain interested in building partnership with the private sector for delivering better SWM service. Public Awareness 26. The level of public awareness about solid waste remains low in all three cities. This is evidenced by the wide-spread practice of throwing waste into drains or roads. The municipalities have attempted to raise public awareness campaign in a limited way. Strong and effective programs on public awareness creation to inform, motivate and educate people to cooperate and participate in solid waste management are necessary. Social Inclusion 27. A multitude of people are involved in the solid waste sector including waste pickers, itinerant buyers of recyclable material, small businesses dealing in recyclables. Some of them belong to the most marginalized communities. They earn their living from solid waste and provide valuable service to the sector, but their contribution is often not recognized. While developing a more effective and efficient solid waste management in these cities, the impacts on their livelihood must be kept in mind and any adverse effects should be minimized as far as possible. The informal workers deserve support in terms of recognition, organization, income opportunity and health protection. So far the sweepers engaged by the municipalities are concerned, they are now socio-economically at better status than few years before, mainly because of raising the basic salary of lowest level staff by the Government relatively more compared to that of higher level staff. In the project municipalities, percentage of female sweepers is less 11

21 than that of male sweepers. For instance, in Nepalgunj (with maximum no. of sweepers) and in Janakpur, it is about 40%. And, as per government s rules & regulations, female sweepers get some more holidays for the same basic salary. Table 2: Summary of Existing Situation in Project Municipalities Aspect Nepalgunj Siddharthanagar Janakpur Estimated Population in 2011 Projected Population in 2031 Present SW Generation (2011) Projected SW Generation in ,000 72, , , , ,000 ~ 27 ton/d ~ 27 ton/d ~ 44 ton/d ~ 80 ton/d ~ 96 ton/d ~ 157 ton/d Collection Primary collection is inadequate. Primary collection is inadequate. Primary collection is inadequate. Only about 17 ton/d* Only about 21 ton/d* Only about 18 ton/d* Transportation Municipality provides secondary transport service in core area by picking up waste from main roads. Municipality provides secondary transport service in core area by picking up waste from main roads. Municipality provides secondary transport service in core area by picking up waste from main roads. Final Disposal Open dumping practiced. Open dumping practiced. Open dumping practiced. Recycling Plastics and glass recycling in limited scale by private agencies. Plastics and glass recycling in limited scale by private agencies. Plastics, paper and glass recycling in limited scale by private agencies. Private Sector Participation in SWM service Low level of private sector engagement reported. Detail data not available. Low level of private sector engagement reported, but a bit better experienced than Nepalgunj and Janakpur. Detail data not available. Low level of private sector engagement reported. Detail data not available. Waste Pickers Informal waste pickers exist. Detail data not available. Informal waste pickers exist. Detail data not available. Informal waste pickers exist. Detail data not available. Health Care Waste Management No proper hospital waste management is practiced. ~ 49kg/d infectious waste is generated. No proper hospital waste management is practiced ~91kg/d infectious waste is generated. No proper hospital waste management is practiced ~ 60kg/d infectious waste is generated. *Note: As reported by the municipalities (November, 2011) 12

22 2.2 Consultation with Project Municipalities 28. After review of available documents and information (particularly the PPTA consultant s report of IUDP), we interacted with the project municipalities to gain their views on pertinent issues. A questionnaire was distributed to them to collect latest basic information related to current SWM practices in addition to those provided in the IUDP reports. Subsequently we visited the municipalities and discussed the issues in detail by using a checklist. For this we met relevant officials of each municipality including CEOs, planning chiefs, SWM section chiefs, and social development officers. In addition, we met private agencies including NGOs and CBOs involved in SWM. We also observed the collection and transportation of solid waste being disposed of at the existing open dump sites. Transect walk through main roads and lanes helped us to get a general view of the existing condition of urban services including cleanliness, drainage, and road condition. 29. Table 3 presents a summary of our findings on the private sector involvement in SWM service. Table 3: Issues on Private Sector Involvement in SWM Aspect Nepalgunj Siddharthanagar Janakpur Institutional Views on PSP The Municipality has a favourable view about the private sector participation in municipal services. It is already involving private sector in vehicle parking management and bus terminal operation, but not yet in SWM service. Although privatization of SWM leads to an improvement in effectiveness & efficiency of service, Municipality is of the opinion that its existing large number of staff must be taken care of while pursuing the process of privatization. Nepalgunj being a high growth rate city, the waste volume will continue to rise. Municipality may not be able to manage its waste alone in future. Partnership with private sector is therefore necessary. Recycling operations are The Municipality in general has a positive view on private sector participation in the municipal services. It believes that efficiency and effectiveness in delivering SWM services can be good improved through partnership with the private sector. However, there have been a few problems in working with the private sector in the past. Therefore, some caveats were mentioned. There is generally a positive view on the private sector participation in the Municipality. It was reported that the primary collection part of SWM could be contracted out to private sector. Municipality is already working on such an initiative. It was suggested that the secondary collection part could be left as the Municipality s responsibility, as it requires vehicles, and private agencies may not be willing to invest in procurement of vehicles. The Municipality s view is that the private sector should be involved in service delivery as much as possible, so that these services are no longer a burden to the public sector. In this way the municipality can pay due attention to 13

23 Aspect Nepalgunj Siddharthanagar Janakpur best done by the private sector. other important issues to develop the city. Dealing with the existing workforce in a prudent manner is an important issue for initiating PPP. Municipality may choose to retain their workers but place them under the supervision of private agency. Also, implementing the PPP initiative in a small area first, then expanding based on lessons learned may be a good strategy. This way the efficiency and effectiveness gained through PPP will help Municipality take further decision. It may be noted that building partnership with private sector does not lessen the burden or responsibility of the municipality. Such partnership is used for gaining efficiency & effectiveness. The municipality s responsibility shifts from direct operation to monitoring and management. This requires particular expertise for which the municipality must build its capacity. Also, involvement of private agencies does not mean that the municipality s financial burden will be greatly reduced. In reality, the private agencies may require a lot of guidance and support from the municipality as well as sharing cost of services. Experience in PPP In several wards, street cleaning and waste collection is managed by ward level SWM committees composed of local residents. The municipality provides some manpower (workers) and materials (brooms). The Red Cross is also a partner and provides some equipment (wheelbarrows). There is also a program on urban sanitation where the municipality is partnering with the Swiss Red Cross, Nepal Red Cross, District Offices (Agriculture and Health), and the Chamber of Commerce. Till July 2011, a private company was engaged for routine street cleaning along 17 km of main roads within the city core area for waste collection, transportation and final disposal service. However, this contract had to be cancelled due to poor performance of the company, as it did not complied with terms and conditions of the contract agreement. Reportedly, one of the main reasons behind this problem was the low bidding of the contractor, which the municipality had to accept due to its legal bindings while awarding contract. However, detail review of this contractual This municipality is now in contract with a private enterprise in managing a public toilet built and owned by the municipality. Plans are also underway to contract out the cleaning, waste collection and disposal service by dividing municipal area in 6 clusters. Preliminary plans are being prepared with a PPPUE program support of UNDP for this initiative. After some necessary decisions of the municipality board, the contracts are expected to be awarded soon. It is reported that the contracts will be for one year at first but renewable upon satisfactory service. Under these 14

24 Aspect Nepalgunj Siddharthanagar Janakpur Readiness for PPP The municipality has already some experience in working with CBOs, NGOs and various other organizations. agreement also shows some weak points in its terms & conditions, particularly regarding special cleaning and additional services (e.g. during festivals, special occasions etc.) expected to be performed under Municipality s instruction as and when required being not at all specific. This is to be taken as a good lesson for improving terms & conditions of the contractual agreement while contracting out the landfill operation and other related functions. There is another existing arrangement with a CBO called Belahiya Village Samaj for total cleaning of Belahiya area (ward no. 1), including waste collection & transportation to the final disposal site. This service has been continuing for about 5 years satisfactorily with a nominal municipal support. The Municipality only provides 3 ltrs. diesel per day and 4 sweepers. Other financial sources for sustaining this arrangement includes funds collected from socio-cultural programs and charity shows organized by the Samaj during special occasions (e.g. Bhailo in Tihar) and membership fees of the society. Door-to-door collection service is provided in limited area only, for which currently no fee is being collected. The Municipality has a PPP Committee to handle private sector participation. This committee is responsible for engagement with the private sector. contracts, private sector agencies will collect waste from small lanes and bring those to main streets to load into municipal trucks. The existing municipal workers in the proposed cluster, where services will be contracted out, will be reallocated to other areas. The municipality seems to be ready to engage with the private sector as evidenced by its initiatives with public toilet operation and outsourcing of SWM 15

25 Aspect Nepalgunj Siddharthanagar Janakpur services. Views on landfill operation Nepalgunj Municipality firmly believes that the operation of the landfill site should be done by a private party under the supervision of the Municipality. From the very beginning, the Municipality itself should not attempt to run this facility. The Municipality thinks that the landfill site may be operated by a private agency during the project period. However, the municipality is concerned by the fact that civil contractors in Nepal are not experienced in operating landfill sites. This may create a problematic situation by assigning the long-term operation of landfill to a civil contractor. The Municipality thinks that landfill operation should be best left with the municipality itself for the above reason. This risk will be minimized as IUDP will select the operator through international competitive bidding. A prequalification process may be adopted to allow only qualified and experienced firms to bid and exclude inexperienced firms. The bidding process will also lead to associations between international and national firms for better performance. The opinion of the Municipality is that the landfill site should be operated by the private sector. The landfill could be continued to run by the private sector even after the project is over, but the asset should belong to the municipality. The Municipality thinks that the private sector will be more effective and efficient in operating the site. As for future plans, the municipality is thinking about promoting segregation of waste and composting the organic fraction. This will extend the life of the proposed landfill facility. Financial Municipality thinks that the landfill site should be operated in a gradual manner and with due consideration of limited municipal resources. Once the project is completed, the landfill site must be operated within the budget of the municipality. Therefore, it should be considered while designing the operational plan. Otherwise, this asset will become a liability for the municipality. 16

26 Aspect Nepalgunj Siddharthanagar Janakpur The municipality already collects sanitation fee together with street lighting and fire brigade. In the fiscal year 11/12, service 8% of integrated property tax is being collected, and shall be increased to 10% next year. A significant part of it may be used for SWM operations once the facilities are built and the service improved. The city also receives grants from the central government, a part of which may also be used for SWM. At present the municipality collects SWM fee of NPR per household per year. The paying of this fee has been made compulsory by strictly linking with other municipal services, e.g. while giving permissions, issuing the municipal recommendation letters in various affairs by the municipality. The municipality is against the idea of private agencies collecting service charges directly from the citizens. As reported by municipality, any additional fee collection by a private agency will appear as a system of double taxation. Therefore, the municipality wishes that service fees should be collected by the municipality itself, and then be used to engage qualified private agencies. Many financial arrangements between the private sector and municipality are possible. The nominal service fee collected so far is for the door-to-door pick-up service outside city core areas (i.e. individual households bringing their wastes to the vehicle on route standing at some common point at main roadside). But mainly in city core areas, for direct door-to-door collection service (i.e. waste collectors going to individual households to collect waste, which is also one level higher service), it is better that the private sector rendering this direct service The present municipal budget as reported is about NPR 100 million per year, out of which about NPR 10 million is spent for SWM service. The revenue collection may be improved to partly absorb the additional cost of operating the new waste management facilities. Their present plans include involvement of private agencies to deliver SWM services and to authorize them to collect NPR 30/month per household. The rate for shops and commercial establishments would be more. Municipality s experience in some commercial areas shows that the people are willing to pay such service fee happily, if the service is good. The service fees collected from households and institutions will only partly cover the cost of proving SWM service. The rest still has to be borne by the municipality. Therefore, thorough accounting and budgeting are required. 17

27 Aspect Nepalgunj Siddharthanagar Janakpur collects the fees itself for better accountability of the service provided however as per the fee structure fixed by the municipality. Social The municipality thinks that creating public awareness to support effective and efficient SWM service is one of its most important functions deserving top priority. The Municipality has to play a vital role in promoting the reduction of waste at source. The municipality actively engages with citizens and CBOs. This good practice may be further boosted to cover all wards of the city. Janakpur Municipality has an active Social Development Section. They are trying to involve community members, women s groups and school children in promoting better SWM. This section works with a number of NGOs & CBOs, and even with the local Chamber of Commerce. In few areas, efforts for improvement of SWM have been made by introducing rickshaw vans for collection and assigning extra workers with some support from UN-Habitat. The Social Development Section, however, has only two full-time staff. They do not have any ward level staff. It is expected that citizens forums will be formed in each ward in future. Then the Section will be able to work through these platforms at ward level. Legal The municipality believes that the provisions of the local self government act (LSGA) are sufficient to make necessary by-laws. This is deemed not so difficult for the Municipality. One of the legal problems identified by the municipality is that they are generally bound to select the lowest bidder in the bidding process of contract. This practice very often leads to the selection of unsuitable private agencies lacking in capacity to deliver services. It appears to the municipality The Municipality thinks that there is not much legal barrier against private sector involvement. The present laws are sufficient. Such laws also permit the Municipality to allow private sector to collect service fees from citizens. It was noted that the Municipality has not received the new SWM Act, 2068 (2011) so far. 18

28 Aspect Nepalgunj Siddharthanagar Janakpur that the private sector s motive is only profit-oriented, whereas the municipality must ensure public service. This makes engagement of private sector inherently complicated. This problem has become apparent in case of a vegetable market operation. The municipality entered into partnership arrangement with a private agency to construct and operate a vegetable market. However, their performance is unsatisfactory. The Municipality is now finding it difficult to break the contract as the private agency invested funds and needs to recover the cost. Therefore, legal safeguards should be in place in case of poor performance. Some copies of the SWM Act, 2068 (2011) have been forwarded to Janakpur Municipality. Capacity Building Needs Although local self governance act (LSGA) gives the authority of passing required by-laws, it is still not an easy process for the Municipality. The municipality needs training in landfill operation and recycling. Besides, general capacity improvement in GIS, e- bidding and procurement, accounting, and tax collection are also needed. IUDP will launch a capacity development technical assistance for strengthening the capacity of four municipalities. This will include support to GIS, financial management and For capacity building support, the municipality made specific request for introduction of GIS, e- bidding and procurement, accounting, and integrated tax collection system. For SWM, trainings on composting, transfer station, landfill operation and building awareness within the municipal staff were requested. There is still not sufficient capacity in the municipality Capacity building support will be needed on the technical and contract management aspects. They will also require support in creating public awareness. 19