addarrow-downarrow-outlinearrow-outline-downarrow-outline-leftarrow-outline-uparrow-upclosedownloadformat-pdfhelpinfoinfo-outlinelink-external-outlinesearchsource-handshakesource-klsource-web

Waste

Solid waste is inextricably linked to urbanization and economic development—as countries urbanize, and standards of living increase, consumption of goods and services increase, leading to more waste. Almost 1.3 billion tons of municipal solid waste are generated globally every year, and by 2050 this is expected to double. Poorly managed waste has an enormous impact on people’s health, the environment, and often results in higher costs for governments than if the waste was managed properly in the first place. 

Solid waste management is often regarded as the most local of all public utilities. Since the first steps were taken to decentralize this service in developing countries, responsibility for it is increasingly falling to municipalities, as it has been the case in Europe for decades. Frequently subject to financial, material, and work force constraints, municipalities try to manage just the most urgent needs, such as removing waste from cities to keep them clean. Many focus their efforts on developing basic cleaning services— street sweeping, waste collection, gutter maintenance, and running landfills—with mixed results and high costs. In some cities in Sub-Saharan Africa, operating costs can account for 30 to 50 percent of a municipality’s total annual budget. Yet this approach, based on collecting and storing waste in open landfills, falls short of managing municipal solid waste on a long-term basis.

The public and private sector together need to assume much more responsibility for waste generation and disposal, specifically product design and waste separation. Formalizing these responsibilities through well-structured public-private partnerships (PPPs) can result in significant improvements in efficiency and quality of solid waste management. Success requires governments to consider the content and volume of the existing waste stream, the appropriate technologies, the imperative of stringent environmental standards and community engagement, who will pay for what, and the availability of experienced private partners.

As PPPs become accepted practice, investments in the waste sector have grown as governments attract private capital and technical expertise for the construction, operation, and management of waste projects. Most commonly, these projects include waste incineration, waste treatment, recycling, and energy from waste (EFW) projects.

Through a PPP, governments contract with private companies to construct, operate, and maintain waste facilities. PPP transactions have been widely applied in the delivery of waste treatment and EFW facilities in the past decade. Most of the volume generated between 2005 and 2013 was from public projects tendered as PPP concessions: a total of 68 deals in the waste sector, worth $17.3 billion. Over the past decade, the countries with most active PPP market have been the U.K., Spain, Singapore, Australia, Poland, Italy, and France. In 2013 alone, the U.K. saw nine deals reaching financing close in the waste sector, including the construction of waste treatment plants and EFW facilities, with a total investment of $3 billion.  

Issues

  • Integrated management

    Reducing the quantity and noxiousness of waste at the source, introducing separate collection and sorting procedures to encourage recycling and reuse, organizing waste transportation, and investing in recycling, energy, and organic recovery...

    Reducing the quantity and noxiousness of waste at the source, introducing separate collection and sorting procedures to encourage recycling and reuse, organizing waste transportation, and investing in recycling, energy, and organic recovery technologies are the fundamentals of sustainable waste management. All the links in this chain are interdependent: they follow exactly the same path and address the same issues, regardless of region.

    An integrated system based on prevention-sorting-recycling-recovery-reuse is therefore key to reducing waste production over the long term and reducing the amount of waste deposited in landfills. The public sector’s efforts to develop waste management toward an integrated system are hindered by the difficulties associated with investing in and maintaining facilities, the lack of business competencies in certain links of the chain, and the ongoing absence of sustainable financing sources.

  • Public and private sector roles

    The private sector can correct the management failures encountered in a state-run system and provide the technical skills often lacking in the public sector. In best-case scenarios, private operators have qualified staff and appropriate...

    The private sector can correct the management failures encountered in a state-run system and provide the technical skills often lacking in the public sector. In best-case scenarios, private operators have qualified staff and appropriate production resources, while still being flexibly organized. Since costs cannot be fully covered by the fees collected from users, calling on specific service providers (for collecting waste, operating a waste transfer plant, or technical landfill center) is more widespread than the appointment of a large-scale private operator covering the entire sector.

    PPPs involving a build-operate-transfer contract are the most common; these involve a system of direct payment to the private operator by public authorities, based on a management cost per metric ton. This rate not only covers operating costs but also, in some cases, investment in initial infrastructure and upgrading works. As it is difficult for municipalities in developing countries to pay private operators enough to cover the cost of all waste management services, the central government often has to provide additional funding. The private network is therefore split between primary collection, organized by a very active informal service, and the rest of the waste management chain, where one can find global corporations as well as local operators, some of whom are from the informal sector. 

  • Need for regulation and oversight

    Private sector management of all or part of the system does not solve the problems entirely, and public authorities have to step up their involvement as regulators and project managers even further. Perhaps more so than for other public...

    Private sector management of all or part of the system does not solve the problems entirely, and public authorities have to step up their involvement as regulators and project managers even further. Perhaps more so than for other public utilities, waste management requires coordination among numerous stakeholders at different stages in the process, and calls for a broad range of skills and know-how. Implementing a proper waste management policy implies a strong involvement from the public authorities running the service. This includes controlling costs, planning investment, negotiating contracts with service providers, educating users, establishing and enforcing regulations, and involving producers and consumers.

  • Success factors

    Mobilizing the private sector, skilled as it is, does not in itself constitute a solution for better waste management. To be effective and appropriate, a waste management system must be accompanied by better financing mechanisms, increased...

    Mobilizing the private sector, skilled as it is, does not in itself constitute a solution for better waste management. To be effective and appropriate, a waste management system must be accompanied by better financing mechanisms, increased technical and institutional capabilities on the part of public authorities, and a well-structured regulatory framework. Specifically, the project must take into account the town’s socio-spatial structure, the type of waste involved, the resources available, the institutional setting, and whether those involved are from the formal or informal sector. A clearly defined regulatory framework enabling companies to compete equitably is a prerequisite for effective private sector involvement.

    In the absence of such an environment, private sector involvement—even if it can temporarily fill public management gaps—may still not be enough to achieve an integrated and sustainable waste management system. 

  • Financing

    Solid waste management services in both developed and developing countries rarely reach financial equilibrium. Local authorities in developing countries often have to resort to three different funding sources—household waste collection fees...

    Solid waste management services in both developed and developing countries rarely reach financial equilibrium. Local authorities in developing countries often have to resort to three different funding sources—household waste collection fees paid by the user, a household waste collection tax, and general budget contributions—in an attempt to cover sector costs. Waste collection fees are paid directly by each household and usually apply to collection only. The amount is kept low, to be manageable for households, and is typically paid to private or informal waste collection operators. These fees are generally not enough to cover the system’s upstream costs. Local authorities therefore try to obtain additional financing via a household waste collection tax, which is used to finance other aspects of the service. However, due to the lack of transparent systems for paying local taxes, losses inevitably occur. Consequently, the income generated is insufficient to cover the costs of setting up an integrated waste management system. 

Tools & Guidance

    • 2012
    • Ankit Kumar Chatri, Arslan Aziz

    Public Private Partnerships in Municipal Solid Waste Management - Potential and Strategies

    This report is part of a broader research exercise that aims to provide implementation guidelines and policy recommendations for catalyzing Public-Private Partnerships (PPPs) in the social sectors viz., urban water supply, municipal solid waste management and skill development. This report attempts to describe the status of municipal waste management (MSW) system in India, highlight key issues & challenges faced by various stakeholders in the MSW management space and gauge the potential for private sector participation in managing and delivering Municipal Solid Waste. The report also describes strategies that can be pursued by ULBs while planning for management of municipal solid waste.

    • 2010
    • CSIR Researchspace

    South Africa’s Good Waste Management Practises Toolkit

    Lessons learned

    The current poor state of waste service delivery by South African municipalities is a concern due to the potential impacts on human health and the environment. All municipalities are faced with similar challenges including lack of funding, low priority afforded to waste management and capacity problems to deliver services, although to different degrees. Despite this rather discouraging situation, certain municipalities have managed to overcome some of these challenges and good waste management practices are to be found. This paper reports on the development of a Toolkit for municipal waste management service delivery, based on some of the good waste management practices currently implemented in different municipalities across all the...

    • ICRA Management Consulting Services Limited, INDIA
    • Government of India, Asian Development Bank (ADB)

    Toolkit for Public Private Partnership Frameworks in Municipal Solid Waste Management

    Volume I: Overview and Process

    The Toolkit aims to facilitate a better understanding of applicability of potential PPP models in the context of the issues and challenges faced in the MSWM sector and to provide a step-by-step approach for identifying, evaluating and implementing PPP projects in the MSWM sector. A rapid assessment of the sector, covering recent policy developments in the sector, compilation of case studies of select PPP case studies in India and a review of the baseline scenario in select satellite towns to explore scope for application of PPP models suggested in this toolkit, was undertaken as part of the process of developing this toolkit

Projects & Case Studies

    • 2007
    • Daniel Hoornweg and Natalie Giannelli
    • PPIAF

    Managing Municipal Solid Waste in Latin America and the Caribbean: Integrating the Private Sector, Harnessing Incentives

    Latin America’s urban areas generate about 369,000 tons a day of solid waste. Ensuring that the waste is collected and disposed of properly will require strengthening the strategic role of municipalities.The private sector already plays a big part in waste collection. But private providers could do more in waste disposal and management, helping to improve service in close coordination with local authorities.This paper analyzes how some cities in Latin America have Integrated the private sector in managing municipal solid waste.

    • 2012

    The Garbage Book

    Solid Waste Management in Metro Manila

    The Garbage Book presents the solid waste crisis in Metro Manila. It is aimed at raising awareness of issues in the sector, and outlines potential solutions to address the problem. This book won the Bronze Anvil Award, the overall public relations tools award given by the Public Relations Society of the Philippines during its 40th Anvil Awards in 2005.

    • 2013
    • World Bank Group (WBG)

    West Bank and Gaza: Solid Waste Management

    PPP Stories

    Over the last decades, West Bank and Gaza have suffered due to political and economic instability, resulting in years of inadequate infrastructure investment and poor provision of public services to the people of Palestine. The provision of standard municipal public services, especially solid waste management, was of particular concern. In response, the World Bank Group provided an integrated solution to the client, the Joint Services Council for Hebron and Bethlehem (JSC-H&B), leading to the successful conclusion of the first public-private partnership (PPP) in the West Bank. The World Bank and other donors provided the necessary funding for a new sanitary landfill at Al-Minya but deemed that the local capacity to manage it was...

    • 2013
    • World Bank Group (WBG)

    India: Berhampur Solid Waste Management

    PPP Brief

    The municipal solid waste management system in Berhampur, a city in the Indian state of Odisha, is inadequate to meet the needs of its population and is not in compliance with national regulations. With little to no primary waste collection in about half the city, many citizens, mainly in low-income areas, are exposed to health risks resulting from pollution, water contamination, and untreated solid waste. The Department of Housing and Urban Development of the Government of Odisha and the Berhampur Municipal Corporation, seeking an affordable solution for delivering improved waste management services to its citizens, turned to IFC to help structure a PPP transaction and attract a private operator to improve the efficiency and...

Lessons & Analysis

    • 2014
    • Asian Development Bank (ADB)

    Municipal Solid Waste Treatment

    Case Study of Public–Private Partnerships in Wenzhou

    This case study examines the role of public-private partnerships (PPP) in municipal solid waste treatment in Wenzhou, People's Republic of China (PRC). Urbanization in the People’s Republic of China (PRC) has been on an extensive and accelerated path. In 2008, more than 600 million people were residing in 655 cities, pushing the urbanization level to 45.7%. Based on current trends, the urban population in the PRC is projected to cross the 1 billion mark in 2030 and eight megacities—each with a population of over 10 million—would be existing in the country by 2025 (Woetzel et al. 2008).  However, the rapid rate and sheer scale of urbanization is associated with increasingly pressing social, economic, and environmental problems....

    • 2014
    • International Finance Corporation (IFC)

    Handshake Issue #12: Waste & PPPs

    In this issue on waste public-private partnerships (PPPs), experts, entrepreneurs, and activists share innovations that can guide government officials toward effective solid waste management strategies; and contributors present a range of solutions and technologies that can be tailored to cities around the world, with special attention focused on approaches that will work in developing countries.

Explore Sectors