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Solid Waste Management Kandy, Sri Lanka

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Solid Waste Management Kandy, Sri Lanka I I I FINAL REPORT I Feasibility Report and Tender Documentation I I Pilot Privatization Project: Solid Waste Management I Kandy, Sri Lanka I Prepared for I Kandy Mumclpal Council Kandy, I Sri Lanka Umted States Agency for International Development I Colombo, Sri Lanka I Prepared by PADCO, Inc. I Washmgton, D.C. I Contract No PCE-1008-I-OO-6008-00, TO 9 I September 1998 I , '''" I Funds for productzon ofthIs report were provIded by the Umted States Agency for Internatlonal Development I I J I I I Table of Contents I Executive Summary 1 I 1 OvervIew of SolId Waste Sector Assessment 1 2 Project DeSCrIptIOn 1 3 Project Cost Estlffiates 2 I 4 Next Steps 3 1 IntroductIon 6 I 1 1 Background 6 1 2 OrgamzatIon of Report 6 I 2 Overview Kandy and Town Center 7 2 1 LocatIOn 7 2 2 PopulatIon 7 • 221 ResIdent PopulatIOn 7 • 222 Commuters/VIsItors 11 23 Economy 11 I 23 1 CommerCial ACtIVIty 11 232 InstitutIOns 11 I 3 SolId Waste Sector Assessment 13 3 1 SolId Waste CharacterIstics 14 311 Generation 14 I 3 1 2 CompOSItIOn 17 3 2 EXIstmg Techrncal and OperatIOnal CondItIOns 20 321 OperatIOns ActIvItIes 20 I 322 Staffing Patterns 23 323 EqUIpment 24 324 OrgamzatIOn of Waste Management Operations 27 I 3 3 Proposed Ongomg and ImtIatives m SolId Waste Management 27 331 Recovery 27 332 Waste EquIpment 30 I 3 4 Interest by PrIvate Compames m ProvIdmg Waste Management ServIces 30 341 PotentIal Waste Service Contractors 30 342 CommumtyIMerchants 31 I 3 5 FmancIaI 31 35 1 Local Government Revenues and Expenditure 31 352 Cost and Fmancmg SWM m Kandy 33 I 353 Pncmg and Cost Recovery PolICIes for SWM 37 4 Fmdmgs, ConclUSIOns, and Recommended Strategy 37 I 4 1 Techrncal 37 I I - II - 4 1 1 Street Sweepmg and Waste CollectIOn m the Town Center 37 4 1 2 Non-Town Center SpecIfIc ActivItIes 38 42 FmancIaI 43 4 2 1 Fmdmgs and ConclusIOns 43 4 2 2 Recommended Strategy 43 5 DescrIptIon of PIlot Project 43 5 1 Project Bnef 43 5 1 1 RatIOnale and Objectives 43 5 1 2 Scope of the Project 44 5 1 3 Expected BenefIts 45 I 5 1 4 Potential Constramts and MItigatIon Measures 46 5 1 5 CondItiOns 46 5 2 Project Plans 46 I 5 2 1 LocatIOn of ServIce 46 5 2 2 DIsposal SIte 46 5 3 Project DesIgns and Costs 47 I 5 3 1 Level of ServIce and Standards 47 5 3 2 Companson of AlternatIve SOlutIOns 47 5 3 3 Likely CapItal Investment ReqUIrements 48 I 5 3 4 ImplementatIOn Schedule 49 535 Implementmg Department 49 5 4 FmancIaI ConsIderatIOns 52 I 5 4 1 Projected Cost of Current OperatIOns to the KMC 52 5 4 2 Cost EstImates of a PnvatIZed OperatIOn to the KMC 54 5 4 3 Revenue Forecasts and ProfItabIlIty of the PnvatIZed OperatIOn 56 I 5 44 FmancIaI Inputs for Tender Documents 56 6 PIlot Project JustIficatIon 58 I 6 1 EnvIronment and SOCial 58 6 2 FmancIaI JustifIcatIOn 59 6 2 1 Cost EstImates 59 I 6 2 2 Revenue Forecasts 61 623 FmancIaI Returns 61 I 7 DetaIled Tender Documents, BasIs of Award, and Contract 61 7 1 Tender Documents 61 7 1 1 Tender Notlce 61 I 7 1 2 Pre-QualIficatIOn Request 62 7 1 3 Request for Tenders 62 7 2 BaSIS of Award 63 I 7 2 1 TechnIcal EvaluatIon CommIttee 63 7 2 2 Contractor SelectIOn 64 7 2 3 NegOtiatIOns 64 I 73 Contract 65 I I I - III - 8 Contract Performance/Enforcement and EducatIOn Program 65 8 1 Contract Performance/Enforcement 65 8 1 1 Performance Bond 65 8 1 2 Llqmdated Damages 65 I 8 2 EducatIOn Program 67 - AppendIces .. AppendIX A Calculated QuantIty of Waste DelIvered to DIsposal SIte, January-Apnl 1998 AppendIX B Draft Tender NotIce AppendIX C Draft Pre-QualIfICatIOn Request I AppendIX D Draft Request for Tenders AppendIX E Draft Contract - ServIces for Waste CollectIon, Street Sweepmg, and I Transport to DIsposal SIte ExhIbIts ExhIbIt 2 1 Sn Lanka, Central Provmce, and Kandy DIstnct I ExhIbIt 22 Kandy Mumclpal CouncIl Area ExhIbIt 23 Kandy - Town Center ExhibIt 24 Larger CommercIal Busmesses and InstItutIOns m Town Center I ExhibIt 3 1 Dally Net GeneratIon of SolId Waste ExhibIt 3 2 DaIly (Seven Days Per Week) Average Waste QuantIty (Metnc Tons) Per I Month, January-Apnl 1998 ExhIbIt 3 3 Dally (Average Weekday/Saturday/Sunday) Waste QuantIty, January-Apnl 1998 I ExhIbIt 3 4 Kandy Mumclpal CouncIl SolId Waste - Matenals CompOSItIon (%) ExhIbIt 3 5 Colombo Mumclpal CouncIl SolId Waste - Matenals CompOSItIon (%) ExhIbIt 3 6 Street Sweepmg Routes - Town Center (Zone 1) I ExhibIt 3 7 CompOSItIOn of Street Cleamng and Waste CollectIOn Crews Zone 1 ExhibIt 3 8 OrgamzatIOn Chart ExhibIt 3 9 Kandy Mumcipal CounCIl Revenue and ExpendIture Accounts from 1994 to I 1998 ExhIbIt 3 10 Kandy Mumclpal CouncIl Revenue and ExpendIture Accounts from 1994 to 1998 (at 1998 Constant Pnces) I ExhIbIt 3 11 Cost of SWM m Kandy and Town Center - 1998 ExhibIt 5 1 CapItal Cost EstImates ExhIbIt 5 2 Project Schedule I Exlubit 5 3 Projected Costs of SWM OperatIOns m Kandy MC and the Town Center Exlubit 5 4 Annual O&M and Overhead Costs of Contractor (1998 Pnces) ExhIbIt 5 5 ProfitabIlIty Forecast of Contractor (at Current Pnces) I ExhibIt 6 1 FmancIaI AnalySIS of Improvements to SolId Waste Management, Kandy I Town Center I I Executive Summary 1 Overview of Solid Waste Sector Assessment Kandy's net generatIon of waste has been estunated at 0 70 lalograms per capIta per day Based on thIS generatIon rate and 1998 populatIon estImates, about 107 metrIc tons per day of solId waste are dIscarded m Kandy Total dally waste for the town center averages about 40 metrIc • tons I Of the 40 metrIc tons, about 36 metrIC tons are collected, while the other 4 metrIC tons go uncollected Some of the four tons of uncollected waste may be accounted for by recyclIng through scavengmg AddItIonal scavengmg of food waste by anunals further reduces the amount I collected The majorIty of Kandy's waste (around 70 percent) IS orgamc, WIth the remamder fallmg m the categorIes of paper, metals, plastICS, and other The mOIsture content ranges from I 40 to 85 percent dependmg on the percentage of orgamc matter and the season The Kandy MC's SolId Waste Management DIVIsIOn (SWMD) IS responsIble for the management of solId waste It prOVIdes a range of enVIronmental servIces These servIces mclude waste I collectIOn, street cleamng, waste dIsposal, and collectIon of septage from dram fIeld settlmg tanks and sewage from holdmg tanks Street sweepmg crews collect waste from the majorIty of reSIdences and commercIal establIshments Waste IS placed m hand carts and taken to collectIOn I pomts located near the end of each route Waste stored at the collectIon pomts IS then loaded onto traIler umts or compactor trucks for transport to the dIsposal SIte I Kandy's 35-acre dIsposal SIte has been m use for over 25 years The MC estImates that the eXlstmg dump has about 3 5 years of lIfe remalmng The potentIal eXIsts, however, to mcrease I ItS useful lIfe through hOrIzontal and/or vertIcal expansIOn The SWMD's eqUIpment for street cleanmg and waste collectIOn mcludes 67 hand carts, 14 waste collectIon tractors and traIlers, and 2 waste compactor trucks The Kandy MC has I applIed for a Japanese grant (Japanese InternatIOnal CooperatIon Agency [IICA]) to fmance the purchase of addItIOnal eqUIpment for waste collectIon and dIsposal If the grant request IS I approved, the eqUIpment could be delIvered wlthm the next 12 to 24 months Currently, the cost to the Kandy MC of waste management IS covered by the general rate structure (local property taxes) paId by the reSIdents and merchants located m the MC area I Payment IS based on the ratable value of the property and IS not related to the level of servIce proVIded In 1998, It IS estImated that Kandy wIll spend about Rs 67 mIllIon for solId waste I management III the town center 2 Project DeSCription I Kandy's town center IS the locus of the proposed solId waste management pIlot project WhIle the town center covers only 11 percent of the MC's area, It accounts for 42 percent of the total I waste delIvered to the dISPOSal SIte It IS the hub of the CIty'S commerCIal and tOUrIsm actIVItIes I I • - 2 - I The key objectIve of the pllot project IS to provide an unproved level of waste management serVIces m the town center through a pnvatlZed approach to a more effIcient utlllZatIOn of labor and a more effectIve system for waste collectIon and dISPOSal Achievement of thiS ObjectIve WIll I concomitantly reduce publIc health and envIronmental hazards The servIces to be proVIded mclude waste collectIOn, street sweepmg, and transport to the dIsposal site It IS enVisaged that these services will be provided by the selected contractor at a charge that IS at or below the cost I of the current servIce The pIlot project calls for all reSIdentIal, commerCIal, and InstItutIOnal addresses m the town I center to have their waste collected at least once per day, SIX days per week The collection servIce wlll be for mumclpal waste only and Will exclude hazardous, mfectlous, and other such servIces Streets are also to be cleaned so that a lItter-free environment IS mamtamed throughout I the day Collected waste and lItter are to be transported to the disposal site Without spIllage The major benefits of pnvatIzed waste collectIOn and transport m Kandy's town center Will stem I from unproved and more effiCient management that Will reduce enVIronmental and publIc health I nsks for the reSIdents, commuter populatIon, and tounsts 3 Project Cost Estimates The cost of pnvatlZmg solId waste collectIOn and transport m Kandy's town center IS compnsed I of capital and annual operatIon and mamtenance (O&M) and overhead costs Improved solId waste management services for the town center Will requIre additIOnal capital
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