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 mvestment It IS enVisaged that a pnvate contractor Will have to accrue the followmg capital expendItures over I the five-year lIfe of the contract • three compactor trucks (recondItIOned), I • new vehicles, mcludmg one pick-up and two motorcycles, • carts, bins, and other necessary eqUipment, I • temporary workshop for vehicle mamtenance, • small office, and I • office and workshop eqUipment Total capital costs are estImated at Rs 15 7 mIllIon (US$250,000) m current pnces over the I proposed five-year 1999/2003 contract penod Typical annual O&M and overhead costs are estimated to be Rs 65 mIllion (US$103,000) per annum m June 1998 prIces, mcludmg an allowance for profit and phySIcal contmgencles of I 10 percent of base costs WIth the addItIOn of prIce contmgencIes, total O&M costs for 1999 m current pnces are estImated to be Rs 6 98 mIllion (US$110,000)
I These estImates, however, do not mclude an allowance for fmancmg costs that may be necessary to purchase vehicles and eqUipment Should financmg be reqUIred, then the total annual opera tmg expenses would mcrease by Rs 09 illlllion (US$14,000) to Rs 7 9 mIllIon (US$125,000) I This IS based on the assumptIOn that 70 percent of the capital costs would be financed through I I I - 3 - - loans from Sn Lanka's bankIng sector, mcludmg SANASA Development Bank An mterest rate of 16 percent per annum has been assumed on fmancmg secured for five years
I On the basIs of the MC's 1998 annual expendItures, an Imputed contractor's charge per metnc ton of garbage collected would amount to Rs 490 (US$7 75) m 1998 pnces Addmg a 5 percent factor to cover the overheads of the Kandy MC, the total cost of collectmg garbage to the I taxpayers under the pnvatIZed optIon would be Rs 515 (US$8 15) per metrIc ton m 1998 pnces TIns pnvatIZed cost IS margmally lower than the present cost of Kandy MC operatIons, estImated I to be Rs 534 (US$8 45) It IS envIsaged that the pnvate contractor wIll be paId for collectIOn and transport servIces out of the local rate structure on a monthly basIs The contractor's total expendItures and revenues I over the proposed five-year contract penod are estImated to be Rs 42 7 mIllIon (US$675,000) and Rs 47 7 mIllIon (US$757,000), respectIvely ThIS results m an estImated net profIt to the I contractor of about 10 percent per annum 4 Next Steps I The followmg schedule sets out a tImetable through June 1999 for the selectIon and start-up of a pnvatIZed waste management program for Kandy's town center The estImated tIme requITed depends prImarIly on the penod needed to take the declSlon to pursue thIS optIon and to develop I the addItIonal data to be mcluded m the work scope for the tender documents I I I • I I I I I I - 4 -
Date ActIVIty/Event
1998
MId-May SubmIt draft pnvatIzation report for reVIew and comment
MId-June ReceIve comments and reVIse the report, mcludmg the tender document
- MId-July DecISIon reached by Kandy MC to proceed WIth pnvatizatIon August SWMD collects addItIOnal data to more clearly specIfy the proposed servIce The emphasIs of this work IS the reqUIred actIvIties that WIll form a part of the tender document ThIs should mclude the IdentIfIcatIOn of all waste generators m the town center and the estabhshment of a procedure to momtor future changes when generators move m or out of the town I center For larger generators, the quantity of waste each dIscards on a dally baSIS should be estabhshed
I Early Sept Issue the Pre-Quahficatton Request ProspectIve contractors WIll have 45 days to respond The Kandy MC needs to advertIse this tender, but I prospective bIdders should also be notifIed by mall MId-Sept Pre-quahficatIOn meetmg to answer questIOns and show prospectIve I bIdders the servIce area Meetmg should be mandatory MId-Oct Pre-quahflcatlon responses due EvaluatIOn of responses to take apprOXI I mately 30 days, dependmg on the number of receIved MId-Nov Issue tender request to those compames short-hsted as bemg quahfled The I short-hst should be lImIted to no more than fIve compames Prospective bIdders should be allowed 60 days to prepare and submIt a tender I 1999 I MId-Jan ReceIve tender responses EvaluatIOn to take about 45 days, dependmg on the number of responses The prImary focus of the evaluatIOn WIll be the proposed cost of servIces and the approach to be taken m provldmg the I servIces I Early March Selection of wmnmg contractor MId-March NegotiatIOn of servIce agreement and prIce WIth selected contractor i Early AprIl Award of contract and Issuance of notIce to proceed I I - 5 -
Apnl-May Contractor mobIlIzes (60 days) Procurement of eqUIpment, hmng of staff, supply of mamtenance yard, and related activIties
June Start of serVIce
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I 1\ I I I I I I I I I I I FeasibilIty Report and Tender Documentation Kandy - SolId Waste Pdot Project
1 introduction 1 1 Background USAID/Sn Lanka has a long track record of workIng WIth natlOnal and local government mstItu tIons to strengthen theIr capacIty to Identify and develop envIronmental mfrastructure projects The present assIgnment places emphasIs on envIronmental mfrastructure projects that are smtable for pnvate sector partICIpatIon Appropnate projects can be IdentifIed from the subsectors of I water supply and dIstrIbution, wastewater treatment and dIsposal, and sohd waste management USAID's overall scope for the present capacity-bmldmg aSSIgnment sets as a key dehverable a "how-to" techmcal and finanCIal manual that will provIde step-by-step guIdance m the IdentIfIca I tIOn and development of envIronmental mfrastructure projects Supportmg this manual IS the IdentlficatlOn of a specIfic envIronmental mfrastructure project smtable for pnvate sector I participatlOn To Identify an appropnate pllot proJect, the PADeO team carned out, m a pnor phase of the aSSIgnment, a rapId assessment of the current legal, regulatory, SOCial, pohcy, and pohtIcal I cllmate for mvolvmg the pnvate sector m the fmancmg and operatlOn of envIronmental mfrastructure projects m Sn Lanka It IdentIfied those speCIfIC elements (water, wastewater, sohd waste) where the short-term opportumtIes appear greatest for pnvate sector partICIpatIOn I The avallabIllty of soft loans from multllateral fundmg agenCIes for water supply and dIstnbutIOn and wastewater dIsposal make pnvate participatlOn m these subsectors dIffIcult m the short term
I The area of sohd waste management currently offers better opportumtIes for pnvate sector partICIpation ResponsIbIhty for sohd waste collectlOn and dIsposal IS vested WIth local govern ments Already a few of Sn Lanka's mumcipal and urban counclls have expenmented I successfully WIth contractmg collectlOn and dIsposal to the pnvate sector
The pllot project addressed m thIS report results from a request to USAID/Sn Lanka by the I mayor of Kandy, HIS Excellency Harmdranath DunuwIlle, to aSSIst the mumcipal counCIl m developmg a tender for contractmg out sohd waste collectlOn
I 1 2 OrgamzatlOn of Report ThIS report IS dIVIded mto seven sectIons, WhIch are supported by appendIces Followmg the fIrst mtroductory sectIon, the second sectIon prOVIdes a descnptIon of Kandy and the town center I m terms of populatIOn and commerCIal aCtiVIty The thIrd sectIOn contams detaIled sectoral technIcal, lllStItutIOnal, and fmancial assessments of the current solId waste system m Kandy and the town center The fourth sectIOn bnngs together the fmdmgs and conclUSIOns of the sectoral I assessments and recommends a strategy for sohd waste management The fIfth sectIOn descnbes a pIlot project m technIcal and fmancIaI terms The SIXth sectIon proVIdes the envIronmental, I SOCIal, and fInanCIal JustifIcatIon for the proposed pllot project Fmally, the seventh sectIOn I I - 7-
provIdes detailed deSIgn bills of quantIty, tender documents, and a draft contract agreement for the project
2 OvervIew: Kandy and Town Center 2 1 LocatIOn ExhIbIt 2 1 shows that the Town of Kandy IS about 110 kIlometers northeast of Colombo m the Central Provmce of SrI Lanka The town IS m the hIll country at an elevatIOn of 600 to 800 meters above sea level
The Central Provmce IS dIVIded mto three dIStrICts The Town of Kandy IS m the Kandy DIStrIct, an admmistratlve regIOn that mcludes 17 dIVISIOns (ExhIbIt 2 1) The town IS part of the I Gangawata Korale DIVISIon that covers an area of 1,906 3 square kilometers
The Town of Kandy has an area of 28 7 square kilometers (ExhIbIt 2 2) The town center covers I an area of almost 3 2 square kIlometers, whIch represents 11 percent of the land area withm Kandy (ExhIbIt 2 3)
I 2 2 Population 2 2 1 ReSIdent PopulatIOn I Kandy DIstrIct The latest populatIon forecast for Kandy DIStrICt m 1998 IS about 1 4 mIllIon of whom about 79 percent lIve m rural areas (Census Bureau, 1998) Its rural nature IS reflected by a low I population denSIty of 731 people per square kilometer
Town of Kandy I A realIstIC estImate of Kandy's reSIdent population m 1998 IS about 152,600 (IlCA, 1997) It IS mcreasmg at an annual rate of 1 2 percent An urban commumty, Kandy has a populatIOn denSIty of 5,320 people per square kIlometer The town accounts for about 11 percent of the I total population of Kandy DIStrIct and 70 percent of the DIStrICt's urban populatIon I Town Center It IS more dIffIcult to make populatIOn estImates for the town center However, m 1993, some 956 reSIdences m the town center were receIvmg waste collectIon serVIces (Kandy Mumcipal I CouncIl [KMC], 1993) It IS reasonable to assume that these represent most of the reSIdents population These reSIdences housed an estImated 4,550 people, or about 3 0 percent of Kandy's reSIdent populatIOn The number of reSIdences IS assumed to have remaIned faIrly constant smce I 1993 because of the lack of vacant land for new reSIdentIal constructIOn I I I I ___ 1 -- .. _- __
Exhibit 2.1 - Sri Lanka, Central Province, and Kandy Districf
N A
"Geographic Legend
-= I ~ ~tfaJorRiver
~ A Class Road ~ ~ RadRoad
• !ll'1aJorReservOir
l~llway I j Statton "'" 'd.CAtea• ~ IlS Boundanes o IJlStnct Boundanes
I III I N'" I o 20 40 -----_ .. _-----
Exhibit 2.2 Kandy Municipal Council Area
Geographic Legend -- MajorRlver o MCArea Rail Road
Railway Statton
A Class Road ~ II Mmor Reserv01f
KM I o 1 ? __-----1- ..-----
I I Exhibit, ' 2.3 I' , "J I ,ii' ,I, ,I Kandy'" Town Center I I I , ,I
Geographic Legend ps&~ M.,. R-:mur "\, 8M.CAnoa ,. ClasaaD8d - 8CJuaRoad n 2 2 2 Commuters/VIsitors As a regional employment, commercial, government, and tounst center, an estimated 50,000 to 80,000 commuters and vIsitors enter Kandy each day Tounsts are drawn to the town, which IS a deSignated World Hentage City There are many addltlOnal vIsitors to the town dunng major festivals, mcludmg the Kandy Esala Maha Perahera, which IS held over two weeks m August, every year The Impact of this transient population on the generation of solId waste IS thought to be pnmanly on the town center No data eXist, however, on the amount of waste generated by commuters and VISitors 23 Economy Kandy IS a regIOnal commercial and government center Major mdustnal actiVity, however, IS Imllted, and there IS opJy one major mdusmal operatlOn, a garment factory wlthm the town, but I located outside the town center area 2 3 1 Commercial ActiVity I In 1994, 3,486 commercial busmesses m Kandy accounted for an estlIDated 51 percent of the busmess activity m the Kandy District The central busmess dlstnct of Kandy generated 44 per I cent of the sales wIthin the town and 23 percent wlthm the Dlstnct There are two other major busmess areas, specIfically, the road corndors leadmg from the town I center Katogastota Road (Route A9) and Perademya Road (Route AI) The locatIOn of the larger commercial enterpnses wIthin the town center are shown as I Exhibit 2 4 2 3 2 InstitutIOns I In 1993, 195 mstItutlons were located m the town center These are lIsted m Exhibit 2 4 and mclude • government office bUlldmgs, I • hospitals, • schools, I • pnson, and • rehglOus faclhtles I Kandy General Hospital, a teachIng faclllty, IS the only major publIc medIcal faCIlIty ill the town center The hOSpItal has 1,650 beds, and an extenSIOn, currently under construction, WIll add another 600 beds The average daily number of patients usmg the hospItal IS between 1,400 and I 1,500 Dally admISSIOns and discharges average about 300 patients AdditIOnal users of the faCIlIty mclude between 1,200 and 1,400 outpatients and 4,000 vIsitors to the chmc I I I - 12 - The Bogambara Pnson, a facIlIty operated by the Mimstry of JustIce, IS located m the town center The MlIDstry also operates a remand JaIl m thIS sectIon of Kandy ExhIbIt 24 Larger CommercIal Busmesses and InstItutIons m Town Center CommercIal Busmesses LocatIOn Awanhala Hotel Dalada Street Bake House Hotel Dalada Street Chuty Restaurant Perademya Street Devon Hotel Dalada Street EmpIre Hotel & Bakers Perademya Street Flower Song Hotel Kotugodella Street - Foodland Hotel Yatmuwara Street Ganesha Nandan Hotel Perademya Street Kandy Comer Hotel DS Senanayake Street Kasamara Hotel Kotugodella Street I MuslIm Hotel Dalada Street Lake Front Hotel Dalada Street Old Emprre Hotel Temple Road I PaIwa Restaurant Yatmuwara Street Perera Hotel SWRD BandaranaIke Street Queens Hotel Dalada Street I Rodney Restaurant & Bar DS Senanayake Street Salgado Hotel Kotugodella Street Saumya Hotel DS Senanayake Street I Sn Lanka Tehcom Ltd SWRD BandaranaIke Street VICtOry Restaurant & Bar SrImath Bennet Soysa Street Vmcy Caters Kotugodella Street I WhIte House Hotel Dalada Street Woodlands Hotel DS Senanayake Street I Zazadis Hotel Dalada Street InstItutIons - Government I Army Camp (Smgha RegIment) Yatmuwara Street Central Provmcial CouncIl Yatmuwara Street Government Secretanat Yatmuwara Street I Kandy Mumclpal CouncIl Kande Street Mlmstry of HIghways & ConstructIOn Yatmuwara Street Nat'l Housmg & Development Authonty Yatmuwara Street I Post OffIce SWRD BandaranaIke Street I I I - 13 - InstItutIOns - MedIcal LocatIOn Kandy General HospItal Bogambara area InstItutIOns - Schools St Sylvesters College Yatmuwara Street Tnmty College DS Senanayake Street VIdyartha College Katugastota Road InstItutIOns - Pnsons Bogambara Pnson Bogambara area - Remand Pnson Raja Veedlya (Kmg Street) - InStitutIOns - RehgIOus Kataragama Dewala Kotugodella Street I Sn Dalada Mahgawa (Temple of the Tooth Rehc) Dalada Street • Sn Selvavmayagar KOVII Perademya Road Tapovana Temple Kande Street I 3 Solid Waste Sector Assessment The development of a strategy for sohd waste management (SWM) reqUires an assessment of waste charactenstIcs, eXIstmg operatIOnal (collectIOn and dIsposal) practIces, new/proposed waste I management systems, and the fmancIaI aspects of the servIce In Kandy, the eXIstmg servIce IS provIded by the Sohd Waste Management DIVISIon (SWMD) I of the KMC InformatIOn on waste charactenstics (generatIOn, compOSItIOn) IS gIven In the fITst part of thIS I sectIon The next section reVIews the techmcal/operatlonalinformatIOn on the eXIstmg condItIOns of the waste management system ThIS covers the street deamng and waste collectIOn actIVItieS of the SWMD, Its staffmg, and eqmpment used for the entrre town, and specIfically m the town I center It also reVIews the dIsposal operatIon A reVIew of potential waste management projects under consIderatIOn by the KMC IS presented m the thrrd part PotentIal projects mclude the compostmg of orgamc waste from the publIc market and the sortmg of refuse for recovery of I recyclable matenals, the Improvement or expansIon of the eXlstmg dIsposal SIte, and the SItIng of a new dISPOSal faCIlIty The orgarnzatlOnal structure of Kandy's waste management program IS revIewed m the fourth part The final part provIdes mformatIon on the fmances of the KMC I AddItional data are presented on the cost of sohd waste management operatIons m Kandy and I for the town center I I - 14 - The analysIs m thIs sectIOn focuses on the overall town and the town center The town center, exclusive of the market area, IS designated Zone 1 by the SWMD Zone 1 IS compnsed pn manly of commercIal busmesses as well as InStitutIons, such as government buIldmgs, hospitals, and schools 3 1 SolId Waste CharacteristIcs 3 1 1 GeneratIOn Waste Discarded Waste dIscards are measured by gross generatIon, or the total amount of matenal dIscarded pnor to recyclmg or other dIversIOn actIVItIes The amount of waste for dIsposal IS defIned by net generatIOn, which accounts for dIversIOn, such as recyclIng The net generatIOn rate for Kandy has been estImated at 0 70 kIlograms per capIta per day I (flCA, 1997) Exhibit 3 1 shows that tills IS higher than that reported for the Colombo area Exlnblt 3 1 I DaIly Net GeneratIOn of SolId Waste PopulatIon DensIty DaIly Net GeneratIOn Rate I Commumty (people per square kIlometer) (kIlograms per capita) Kandy 7,180 070 Colombo 2,956 040 DehIwala-Mt LaVInIa 11,713 051 I Sn Jayawardenepura-Kotte 7,570 028 I Based on a generatIon rate of 0 7 kIlograms per capIta per day and an estImated 1998 populatIon (152,600), about 107 metnc tons per day of sohd waste are discarded In Kandy I Total dally (seven days per week) average waste dIscards m Zone 1 are estImated to be 40 metnc tons The total IS compnsed of a dally average of 36 metric tons of waste that IS I collected and 4 metnc tons of uncollected waste The waste quantIty dIscarded In Kandy IS assumed to mcrease m proportIOn to projected I populatIon growth at 1 2 percent per year Normally, waste generation IS seasonal, but no data on the monthly vanatlon In Kandy for a typIcal year were avaIlable One report, however, showed a monthly vanatIOn In the waste I quantIty receIved at the Colombo disposal SIte (lCI, 1996) VanatIons were noted between waste generation durIng the wet and dry seasons I Waste Collected The SWMD maIntains a log of the waste vehIcles enterIng the dIsposal site No data on waste I quantIties, however, were avaIlable In terms of eIther volume or weight Exhibit 3 2 shows the I I 15 - estnnated average dally (seven days per week) waste quantIty collected m Kandy to be 83 7 metnc tons In Zone 1, the estImated average dally waste quantIty collected IS approxnnately 36 metnc tons Estnnated waste collected m Zone 1 accounts for 43 percent of the total waste collected m Kandy ExhIbIt 3 2 Dally (Seven Days Per Week) Average Waste QuantIty (MetrIc Tons) Per Month, January-AprIl 1998* Market Month Zone 1 Area Zones 2-6 Total January 327 70 41 5 812 I February 369 73 402 844 March 375 84 403 86 1 Apnl 357 95 379 83 1 I Average 357 8 1 400 837 *Source AppendIX A I The average quantIty of waste collected on weekdays IS hIgher than that on weekend days Tills IS shown m ExhIbIt 3 3 The SWMD operates a full shIft on Sundays and generally collects more I waste on that day than on Saturdays, when employees work only a half day Uncollected Waste An urudentlfied quantIty of waste IS not collected by the SWMD The amount was estnnated by I subtractmg waste dIscards from the waste estnnated to be dumped at the dIsposal SIte The average dally quantIty of waste estnnated to be dIscarded m Kandy has been estnnated to I be about 107 metnc tons WIth a calculated average dally waste quantIty of approxnnately 84 metnc tons delIvered to the dIsposal SIte, 23 metrIc tons per day can be assumed to be I uncollected Some of thIS waste may be accounted for by recyclmg through waste scavengmg AddItIonal I scavengmg of food waste by arumals further reduces the amount collected Assummg the uncollected waste IS evenly dlstnbuted among the SIX SWMD zones, about I 4 metrIC tons per day ongmates m the town center All of tills, however, does not remam m the town center One source reported that some generators are makIng separate proVISIOns for the collectIOn of therr waste Nevertheless, smce thIs waste IS not bemg receIved at the dIsposal SIte, I It most lIkely IS bemg dumped Illegally I I I ------ Exhibit 33 DAILY (AVERAGE WEEKDAY I SATURDAY I SUNDAY) WASTE QUANTITY, JANUARY - APRIL 1998 * Waste Quantity (metrac tons) Market MonJh Dates Days Zone 1 Area Zone 2-6 Total "- January 5-11 Mon -Fn 381 94 473 948 ----~ Saturday 280 54 391 725 Sunday 272 54 447 773 February 2-8 Mon -Fn 362 51 41 0 823 Saturday 31 2 85 340 737 Sunday 375 107 363 845 March 9-15 Man -Fn 393 72 437 902 Saturday 281 85 340 706 Sunday 375 85 39 1 851 Apnl Man -Fn 425 11 1 420 956 Saturday 343 54 39 1 788 Sunday 406 138 360 904 * Source Appendix A -17- 3 1 2 CompositIOn Material Constituents Recent (MPPI, 1994) waste compositIon data for Kandy show a wIde vanatlon between dIfferent sectIOns of the town (see ExhIbIt 3 4) Two waste compOSItIOn samples taken from Zone 1 also show a WIde vanatlon m the percentage of the matenal constituents of the waste stream These vanatlons may be a reflection of dIfferent commercIal actIVIties m the areas of the town center The waste compOSItIon data for Colombo relatIve to Kandy show a higher percentage of orgarncs (food/plant wastes) and a lower level m the "other" category (see ExhibIt 3 5) Alternate waste sortmg/samphng techruques, mstead of an actual vanatlon m waste compOSItIOn, mayexplam these dIfferences The percentages of metal, glass, paper, and plastICS were relatIvely slffil1ar for both CIties - MOIsture Content The mOIsture content of waste samples from Kandy ranged from 40 to 85 percent (see ExhibIt 34) A later sample from the market area only showed an average mOIsture content of i 87 percent (GPEC, 1996), WhICh IS about 23 percent hIgher than that shown m ExhibIt 3 4 In comparIson, the Colombo waste samples were found to have a mOIsture content of about 40 percent (see ExhIbIt 3 5) However, an analySIS of the mOIsture content of market waste m Colombo reported a content of 85 percent (ICI, 1996) The Colombo data are SImIlar to that gIven m the GPEC report VariatIOns m the mOIsture content of the waste samples may be a result of several factors One IS that samples WIth a hIgher percentage of orgarncs (food/plant waste) should have a hIgher mOIsture content The second IS seasonal The mOIsture content of waste WIll be hIgher dunng the ramy season DenSity The estImated densIty of waste samples from Kandy was 250 kilograms per CUbIC meter (MPPI, 1994) (see ExhIbIt 3 4) Subsequent analySIS of samples from the market area were found to have a denSIty of 630 kilograms per CUbIC meter (GPEC, 1996) DUrIng collectIOn, waste densIty mcreases Waste compacts naturally m the traIler due to the I weIght of matenal on the top compressmg the waste below It Waste denSIty m a tractor/tral1er urnt was reported by the SWMD to be between 500 and 600 kl10grams per CUbIC meter I For the purpose of thIs report, a denSIty of 550 ktlograms per CUbIC meter for waste collected m tractor/tratler umts was used A densIty factor of 630 kilogram per CUbIC meter was used for waste from the market area I - I ------ Exhibit 3 4 KANDY MUNICIPAL COUNCIL SOLID WASTE - MATERIALS COMPOSITION (%) Kandy (MPPI, 1994) Kandy * Samagl Matenal (JICA,1997) Town Area 1 Town Area 2 MktArea Mawatha Mahavvawa Galawatta Organic (Food I Plant) 727% 738% 497% 790% 829% 780% 679% Paper 113% 137% 318% 05% 49% 55% 114% Metal 37% 04% 07% 00% 08% 03% 06% \ Glass 05% 04% 02% 00% 15% 05% 05% ...... Plastics 38% 17% 73% 04% 44% 43% 40% ~ Other ** 131% 100% 103% 201% 56% 11 6% 155% TOTAL 1051% 1000% 1000% 1000% 1000% 1000% 999% Density (kg/m3) N/A 250 250 250 250 250 250 MOisture Content (%) N/A 500 750 700 400 850 600 * Data as presented In source report ** Includes textiles, rubber, reffle, wood, leather, and clay I cerammcs ------ Exhibit 35 COLOMBO MUNICIPAL COUNCIL SOLID WASTE - MATERIALS COMPOSITION (%) Colombo Area Colombo * Sri (JICA, 1995) Jayawardenepure Dehlwala - Low Mid Mid/High Kotte Mount Lavinia Colombo Matenal Income Income Income (UDA.1996l (UDA.1996l (U SAID, 1993) Orgamc (Food I Plant) 751% 880% 809(1'0 831% 940% 836% Paper 140% 54% 117% 62% 10% 70% --..,S) Metal 16% 14% 03% 15% 05% 20% Glass 08% 03% 08% 21% 05% 07% Plastics 24% 28% 26% 31% 20% 56% Other ** 67% 26% 36% 39% 20% 11% TOTAL 1006% 1005% 999(1 1000% 1000% 1000% Density (kg/m3) 343 219 334 N/A N/A N/A MOisture Content (%) 3830% 3710% 4450% N/A N/A N/A N/A - Not available * Data as presented In source report ** Includes textiles, rubber, reffle, wood, leather, and clay I ceramlncs - 20- 3 2 EXlstmg Techmcal and OperatIOnal CondItIOns The SWMD provIdes a range of envIronmental serVIces wlthm Kandy These services mclude street cleamng, waste collectIOn, waste dIsposal, and collectIOn of septage from dram fIeld settlmg tanks and sewage from holdmg tanks There IS no wastewater collectIon/treatment system m Kandy The collected septage/sewage IS taken to the dIsposal sIte and dumped m gullIes that are dug mto the SIde of the facIlIty The SWMD also cleans drams along constructed gutters The SWMD IS the only ennty that undertakes street deamng and waste collectIOn serVIces m the town Some constructIOn/demolItIOn debns and garden waste, however, IS self-hauled by the generators In Apnl 1998, for example, nme self-hauled waste loads were delIvered to the dIsposal SIte The SWMD also operates the only dIsposal SIte used by Kandy ThIS facIlIty, WhICh IS located I Just outSIde the CIty lImIts m Gohagoda, receIves both SWMD and pnvately hauled waste The street cleamng operatIOn focuses on the collectIOn of waste from generators (reSIdences, commercIal busmesses, and mstitutIOns) and lItter clean-up The collected wastes are taken by I SWMD workers to collectIOn pomts, WhICh functIon as small transfer statIons Waste IS stored at these collectIOn pomts, untIl It IS loaded mto a vehIcle, eIther a traIler attached to a tractor I or a waste compactor truck, for transport to the dIsposal SIte 3 2 1 Operations ActiVities Street Sweepmg/Waste Collection I Street sweepmg and waste collectIOn IS undertaken by a number of crews who work a standard week of 5 5 days (45 hours) The crews work a full shift Monday through Fnday and a half shift on Saturday Employees may also work a full ShIft on Sundays, If they report for duty There I are two shtfts per day (mornmg and afternoon) m Zone 1 The other fIve zones and the market area have only a mornmg shift I In Zone 1, the mornmg shtft offiCially begIns at 06 50, when workers report to the muster yard The mormng ShIft begms half an hour later m the other zones Employees deSIgnated to work m Zone 1 are assIgned dunes and routes, collect therr eqUIpment, and begm work by 07 00 The I crews return to the muster yard by 1450 at the end of therr shift The afternoon shift starts at 1400 and ends at 2200 An exception, however, IS for the laborers I assIgned to the compactor truck For the fIrst four hours of the afternoon ShIft, the compactor truck laborers undertake street sweepmg They return to the muster yard by 18 00, and complete the afternoon ShIft workmg on the compactor truck The compactor truck crew completes ItS I work day at 19 50 The laborers work a shorter day because of the need to move qUickly between stops TypIcally, the same dnver IS assIgned to the compactor for both shIfts ThIS IS I a umversal method used to ensure that eqUIpment IS properly handled and mamtamed Street sweepmg crews collect waste from the maJonty of generators Waste IS placed m a hand I cart along WIth street sweepmgs (lItter), as a crew moves along ItS route Town-wIde, there are I I 21 - 67 day-shIft street sweepmg crews, of WhICh 12 serve Zone 1 On the afternoon ShIft, there are four street sweepmg crews m Zone 1 ExhIbIt 3 6 shows that there are 14 sweepmg routes m Zone 1 The street sweepIng crews serVIce about 10 7 kIlometers of roads, along WhICh are located 2,764 waste generators These compnse • resIdences - 956, • commercIal - 1,602, and • InstItutIOns - 206 A further 076 kIlometers on four roads eIther are beIng servIced by a dram crew or are In restncted areas and not served by the SWMD The waste generators on these roads mclude 9 resIdences and 12 mstitutIOllS I Waste generators are requrred to place therr dIscards m a contamer for storage pnor to collecnon However, some SImply place therr waste on the pavement and thIS IS cleaned up by the street sweepers ThIS adds to the work of the street sweepIng crews and the httenng of I orgamc waste presents a potential pubhc health nsk The SWMD has conducted campaIgns to educate waste generators m the town center on proper I waste management practIces One recent (1997) notIce Instructed reSIdents and shop owners to properly store and manage theIr waste pnor to collectIon Another handbIll passed out earher thIs year requested that waste be put m a contamer or plastIc bags and placed at the curb only I at specIfIC tImes m the mommg and afternoon for collectIon Street sweepmg crews unload therr carts at a collectIOn pomt located near the end of each route I There are 350 collectIOn pOInts throughout the town, of WhICh 28 are In Zone 1 Constructed storage bIllS, WhICh are enclosures of concrete hollow blocks on three SIdes, are used as collectIOn pomts at 180 SItes throughout the town Zone 1, whIch lacks open space to locate and I build storage bIns, has only seven At the collection pomts that lack suffiCIent space for a bIn, waste IS stored III the open ThIs apphes to 170 collectIOn pomts, of WhICh 21 are located In - Zone 1 After unloadmg, the sweeper crews m Zone 1 begm cleanmg therr route agam Dunng a shIft, a crew IS expected to servIce Its aSSIgned route three tImes Because the crews start work before I bUSInesses typIcally open at about 09 00, commercIal wastes are collected mamly dunng the second round I Waste collectIOn crews load the waste stored at the collectIOn POInts Into traIler umts or compactor trucks for transport to the dIsposal SIte The traders, wlnch have a capaCIty of between 3 98 and 634 CUbIC meters, are open-top umts WIth four SIde walls The rear wall I operates as a gate that IS lowered to allow the laborers access The rear gate IS typIcally not as hIgh as the other three walls ThIs, combmed WIth the lack of cover over the top of the load, I tends to result m waste bemg spilled durmg ItS transport to the dIsposal SIte CollectIOn laborers often place large pIeces of corrugated paper as a barner m an attempt to mlmmlZe spIllage from I the traIler I - 23- Medical Waste Kandy General HOspItal generates three types of waste (1) mfectIOus waste, (2) sharps, such as hypodermIc needles and scalpels, and (3) non-mfectIous waste InfectIOUS waste IS handled separately from the other types It IS transported by hospItal staff to a central area, where It, along WIth body parts, are collected separately from non-infectIOUS waste by SWMD employees Sharps, whIch are collected separately from other hospItals, are burned m a pIt on the hospItal grounds When a pIt IS full, It IS covered WIth soIl, and another IS dug Non-InfectIOus waste IS taken to a collectIon pomt on the hospItal grounds, where It collected by the SWMD for disposal I Disposal Site The dISposal SIte has been muse smce the early 1970s and IS located on 35 acres at a dIstance of about 8 kIlometers from the town center At the present rate of dIsposal, the SIte's remammg I 3 5 acres will be fIlled over the next three to four years Already one ravme has been fIlled and closed A parallel one IS now bemg used Plans are to fIll thIS Up to a honzontal plane, at a I SImIlar level to a closed part of the dump The dISPOSal SIte mamtaIns records on the number of vehIcles that dehver waste, but no record IS kept on the volume of matenal delIvered There IS no weIgh bndge at the SIte, hence, there I IS no record of the waste quantitIes received The dumpmg area covers the entIre WIdth (estImated 120 meters) of the ravme bemg fIlled The I SWMD has a plan to concentrate dumpmg to a narrower workmg area, whIch should help efforts to control the envIronmental Impact of the operatIon, mcludmg waste fIres and the number of anImals "cavengmg for food The ImplementatIon of thIS proposal and the regular use of cover I matenal (soIl) would help mInImIZe the envIronmental and publIc health Impacts To unload waste, collection vehIcles back to the honzontal edge of the workmg area Metal I plates are pOSitIOned for about three meters Up to the honzontal edge to gIve collectIOn vehIcles a solId surface on WhICh to dnve At the edge, collection vehIcles tip theIr waste mto the dISposal SIte Waste tumbles down the dIagonal face of the fIll toward the base The top of the I fIll area IS about 30 meters above the base of the ravme Currently, there IS no mechamcal eqUipment for compactIOn or spreadmg of waste I 3 2 2 Staffmg Patterns The SWMD has a staff of 462 employees, mcludmg I • the manager, supervIsors, and clerks - 33, • dnvers - 20, • permanent laborers - 250, and I • casual laborers - 159 I I - 24- Mamtenance work on the compactor trucks and the tractor/traIlers IS performed by the KMC's Mecharucal Department, WhICh undertakes all mamtenance work on KMC-owned eqUIpment The dnvers were also wlthm the Mecharucal Department until earlIer m 1998 Street Sweepmg/Waste Collection In Zone 1, up to 56 laborers are authOrIzed to undertake street cleanmg and waste collectIOn ThIs IS based on the labor allocation for the KMC's waste management operatIon, as part of the MInIstry of Fmance's total authOrIZatIOn The addItion of an afternoon ShIft about two years ago mcreased the total laborer allocatIOn to 60 (see ExhIbIt 3 7) A total of 67 laborers (44 permanent and 23 casual) are currently assIgned to the Zone 1 labor pool A major problem IS WIth the shortage of labor ThIS IS partIcularly acute on the afternoon • shlft;-where the shortfalls are met by the transfer of employees from the dram clearung operatIon In addItIon to laborers, Zone 1 has four dnvers and SIX supervIsors One supervIsor I IS an overseer and the other five are sub- and mmor overseers Casual laborers supplement the permanent laborers to fIeld a full work force Casual employees I receIve work when there IS a shortage of permanent employees Casual employees must report dally to theIr assIgned muster yard by the start of a shIft to be conSIdered for work that day Even so, an mabilIty to fIll all authorIZed pOSItIOns and regular absenteeIsm prevent the SWMD I from fIeldmg ItS authorIZed work crew of 56 employees The SWMD has reported ongomg problems m mannmg full work crews for street cleanmg and I collectIOn The problem was observed by the consultant on Apnl 28, 1998, when only 26 of the 44 members of the permanent labor force for Zone 1 reported for work Two casual laborers I were employed to make a total labor force of 28, or 50 percent of the authorIZed crew SIZe Wage scales are based on the labor category and seruonty Permanent employees also receIve benefIts that mclude medIcal leave (24 days per year) and casual, or vacatIon, leave (21 days I per year) AddItiOnal benefits mclude pensIOn contnbutIOns and the opportumty to take out low mterest loans of amounts up to 10 months of wages I Disposal Site The SWMD has a crew of eIght laborers and a supervisor assIgned to the dIsposal SIte I 3 2 3 EqUIpment EqUipment used for street cleamng and waste collection IS compnsed of I • 67 hand carts used to collect waste from generators and street sweepmgs, • 14 waste collectIOn tractors and traIlers, and I • 2 waste compactor trucks I There IS no major eqUIpment m use at the dIsposal SIte I I -----~~--~---~-~--- Exhibit 3 7 COMPOSITION OF STREET CLEANING AND WASTE COLLECTION CREWS ZONE 1 No of Actlvlt'l Shift Crew Size Crews Driver!:, Laborers Total Street Cleaning Day 3 member (1 pusher !Ioader, 2 sweeper 6 0 18 18 2 member (1 pusher !Ioader, 1 sweeper 5 0 10 10 1 member (1 pusher !Ioader! sweeper) -1 Q _1 -1 Subtotal - Day Shift 12 0 29 29 Afternoon f\ 3 member (1 pusher !Ioader 2 sweeper 3 0 9 9 ~ 2 member (1 pusher !Ioader, 1 sweeper .-2 Q -A -A ~ Subtotal - Afternoon Shift 5 0 13 13 Subtotal- Street Sweepers 17 0 42 42 Waste Collection Day 5 member (1 dnver, 4 laborers) 3 3 12 15 4 member (1 dnver 3 laborers) -1 1 --.3 -A Subtotal - Day Shift 4 4 15 19 Afternoon 4 member (1 dnver 3 laborers) * -1 Q --.3 ~ Subtotal - Afternoon Shift 1 0 3 3 Subtotal - Waste Collection 34 4 60 64 * Driver of compaction truck with operating packer body typically works both shifts so was not counted for afternoon shift 26 - Hand Carts The SWMD has 67 hand carts available for street cleanmg m the SIX zones and the market area Zone 1 has 12 carts assIgned The carts, WhICh cost about Rs 10,000 each, are made by the KMC's Mechamcal Department The basIc waste carrymg capacIty of the carts IS 0 42 CUbIC meters length, 121 9 centImeters, wIdth, 762 centImeters, and heIght, 45 7 centImeters Employees often use sectIOns of dIscarded corrugated contamers or other waste to mcrease a cart's heIght and, thus, the volume of waste that can be carned CollectIOn Tractors/TraIlers Twelve tractors-traIler umts are used to transfer waste from the 350 collectIOn pomts to the dIsposal SIte There are three addItional tractors for back-up Three other tractors are out-of I serVIce Two tractors are assIgned to Zone 1 The average age of the tractors IS slIghtly more than 12 years, but some are 18 or more years I old The age dIstnbutIOn of the operable tractors IS shown below Tractor Age Number of I (years) Umts 3 3 7 3 I 10 1 13 2 18 5 I 19 1 Total 15 I The eXIstmg tractors were manufactured by Massey-Ferguson In a recent (1998) tender response for new tractors, three compames offered umts made m IndIa The fourth offered Massey I Ferguson supphed tractors All of the traIlers m use were manufactured by compames m Sn Lanka I The dImensIOns and correspondmg capacIty of the traIlers vary They range from • Length - 2 84 to 3 05 meters, I • WIdth - 1 73 to 1 83 meters, and • HeIght - 0 76 to 1 29 meters I Compactor Trucks The SWMD uses two compactor trucks The compactor umt (packer body) on only one of the I trucks IS operable ThIs IS used only m the town center and collects from larger waste generators I I - 27- and some collectIon pomts The other truck also IS used only m Zone 1 and transfers waste from collectIOn pomts to the dIsposal sIte The compactor trucks are 4 and 12 years old, respectIvely, for the operable packel body and the moperable umt Both truck chassIs were manufactured by Isuzu, and both packer bodIes by Shmmyawa The packer body capacIty of both umts IS 3 5 CUbIC meters A recent check on a weIgh bndge showed a payload of 4 metrIc tons 324 OrganIZatIon of Waste Management OperatIons Smce January 1998, admlillstratIOn of the sohd waste operations has been the responslblhty of the MumCIpal Works Department (see Exhtblt 3 8) DIrect overSIght falls under the Sohd Waste I Management DIVIsIOn PrevIously, waste management came under the charge of pubhc health The shift to the Mum clpal Works Department reflects the perception of the KMC that waste management IS an I engmeermg functIOn Mamtenance of the waste collectIon fleet IS undertaken by the Mechamcal Department of the I KMC 3 3 Proposed OngoIng and ImtIatIves In SolId Waste Management I Recently lmplemented and proposed waste management lilltIatIves mclude (1) recovery (recychng, compostmg) of matenals that would reduce the quantIty of waste for dIsposal and I (2) the proposed supply of eqmpment through funds of nCA 3 3 1 Ilecovery I Ilecychng Recyc1mg IS an mtegral part of the KMC's eXlstmg waste management system Recyc1ables are recovered dunng street sweepmg and collectIOn and at the dIsposal SIte Recychng, however, I IS mformal In an effort to mcrease pubhc awareness about the envIronment, a program on recychng was held last year almed at school chIldren I A local nongovernmental orgamzatIOn (NGO), Center for Development Alternatives (CDA), began a more formal approach to recyc1mg m Apnl 1998 CDA IS focusmg on the collectIon of clean plastic fIlms (polyethylene) from several large generators, such as grocery stores The I matenaliS bemg stored and wtll be collected by a plastICS company m Hatton when a mmtrnum of 5,000 ktlograms has been accumulated CDA expects to receIve between 10 to 30 rupees per ktlogram for the plastICS, dependmg on the level of contammatIOn and whether the plastics are I clear or colored SuffiCIent space for storage of recovered matenals pnor to shipment IS lImItmg Its abIlIty to aggressIvely pursue further recyclIng I ~ I EXHIBIT 3 8 ORGANIZATION CHART MUnicipal Commissioner ) I Chief Municipal Works Engineer L I Works Engineer (Solid Waste Management) [ L __1 _ Chief Clerk Supenntendant I (Scavanglng) [ I Clerk (02 Nos) Office ASSistant Public Health Inspector Public Health Inspector I (Collection) (Disposal) - I Central Conervency IDP Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 (to I Lets) - Market DrainS I -r- - ~r_ ~ [ ___ 4 --I - - - [ r-- J- -r Overseer Overseer Overseer Overseer Overseer Overseer Overseer Overseer Overseer - _-_1 [- -- -r- - [- _r - [- __L J_ I Sub Sub Sub Sub Sub Sub SLb Overseer Sub Sub Overseer Overseer Overse§!r Overseer Overseer Overseer Overseer Oveseer - - - _J I ---_ r- - J__- -I~- ~ -J - - - r Minor J - I Minor Minor-I- Minor Minor Minor Minor Minor Minor Overseer Overseer J -_ Overseer Overseer Overseer Overseer Overseer Overseer Overseer I - L - -1-- - _J I _J r- 1 Labourers Labourers Labourers Labourers Labourers Labourers Labourers Labourers Labourers I _J I I I - 29- An estaBlIshed market was reported to eXIst for recyclmg of metals and glass The economICS of paper recovery was reported to be poor because of ItS low market value and the hIgh cost of transport to the major market of Colombo Compostmg Two compostmg projects are bemg developed by (1) Bio-Engmeermg ServIce TechnologIes Ltd and (2) the Umversity of Perademya Both are targetmg the tea estates as a potentIal market A possIble use IS as a beddmg medIUm m plant nursenes The compost also could be applIed to establIshed plants to provIde mOIsture retentIOn ApplIcatIOn of compost on tea estates m Sn Lanka poses a challenge because of the filly terram Bw-Engmeenng Servzce Technologzes Ltd For several years mterest has been expressed m startmg a compostmg program for the orgamc rIch waste dIscarded from the market area About eIght metnc tons per day of waste are I dIscarded m the market One preVIOUS proposal (GPEC, 1996) faIled to matenalIze Recently, the KMC has agreed to I enter mto a one-year pilot compostmg program WIth Bio-Engmeenng ServIce TechnologIes Ltd (BEST), a Kandy-based NGO Project start-up IS awaItmg the approval of the KMC's Land I OffIcer to hand over a SIte that WIll be used by BEST Compostmg WIll take place on a closed portIOn of the eXIstmg dIsposal SIte The KMC WIll prOVIde BEST WIth the land needed for the operatIOn, about 1,250 square meters (25 by I 50 meters) The KMC WIll delIver the market waste to the SIte Dunng the Imtlal phase, the KMC also will aSSIst BEST by provIdmg some labor and eqUIpment, and by assIstmg m a publIc I awareness program BEST's role m the project WIll be to operate the compostmg facIlIty, develop a market for the resultmg product, and test dIfferent techmques to establIsh the best method for compostmg the I market waste BEST WIll retam all revenues from product sales At the conclusIOn of an ImtIal phase, BEST will explore the potentIal of establIshmg a publIc-pnvate entIty that would contmue I the compostmg operatIon as a commercial venture A proposed partICIpant m the proJect, the MahawelI Watershed Project (MWP), had to WIthdraw support because of lack of funds The MWP was to have prOVIded fencmg around the I compostmg area, use of machmery, and partICIpatIon m the publIc educatIOn program BEST now plans to fence the area Itself and wIll use hand tools for the compostmg operatIOn f The Umverszty of Perademya The UmversIty of Perademya's Department of Agncultural Engmeermg has constructed a com merCIal-scale composter WIth a datly mput of four metrIC tons per urnt The compostmg process I IS based on the deSIgn of a combustIOn faclhty, WhICh IS descnbed below Waste IS Introduced Into the urnt from a feed chute, where It enters a compostmg chamber, I angled about 30 degrees downward As the waste IS compostmg, It falls down a senes of step I I - 30- grates as It passes through the urnt These grates allow air to enter the waste mass from below Exhaust arr eXits the compostmg chamber through stacks on the roof PIpes along the roof allow - water to be sprayed on the matenal to mamtam the deSIred mOisture content When the urnt reaches full-scale operatiOn, waste fed mto the urnt WIll have a retention tlffie of one month Further stablhzatIon of the compost through cunng may be needed dependmg on the reqUirements of users The urnt has been recelvmg about 1 5 metnc tons per day of waste collected by the urnverslty The SWMD has agreed to supply the addItional 2 5 metnc tons per day for the urnt to operate at capacIty The waste w111 be collected from an area near the urnverslty 3 3 2 Waste EqUIpment The KMC apphed (May 1997) to nCA for a grant to fmance the purchase of eqUipment for waste collectiOn and dIsposal nCA IS currently evaluatmg the KMC's request and has raIsed I several concerns, prlffianly WIth regard to the need to develop addItional capacIty for waste dIsposal and to the envIronmental lffipact of the current dISPOSal SIte An on-sIte evaluatIon of Kandy's request may occur as soon as June 1998 The requested eqUipment could be dehvered f wlthm the next 12 to 24 months, If the grant IS approved 3 4 Interest by PrIvate Compames m ProvIdmg Waste Management ServIces I Pnvate comparues provIde a range of waste management servIces m many countnes There IS also growmg mterest m provldmg such servIces m Sn Lanka The focus of pnvate waste management servIces has been on Colombo, where servIces currently under conSIderation for I pnvate partICIpatiOn mclude • constructiOn and operatIon of a landfIll, I • operation of a transfer statiOn, and • street sweepmg/waste collectiOn m the Fort and Pettah Wards I 3 4 1 Potential Waste SerVIce Contractors A number of comparues, some m aSSOCIatiOn WIth expenenced foreIgn partners, have expressed mterest m provIdmg a range of waste management servIces at the murncipal level These are I often large dIverSIfied domestic comparnes WIth departments that have ongomg contracts to proVIde Jarntonal and mamtenance servIces to pubhc sector chents I DISCUSSIOns were held WIth several of these comparnes, and mterest was expressed m pursumg a tender WIth the KMC to prOVIde street sweepmg and waste collectiOn m the town center I The Chamber of Commerce and Industry m Kandy also mdicated that local compames may be mterested, mc1udmg those currently provIdmg Jamtonal servIces, transport operatIOns, or I matenals handlmg SpeCIfIC comparnes are to be Identified by the Chamber m the near future I I I - 31 - 3 4 2 CommumtyIMerchants Kandy's resIdents and merchants cover the cost of waste management servIce through the general rate structure Payment IS based on the ratable value of property and IS not related to the serVIce provIded SatisfactIOn WIth the eXIstmg servIce and areas for Improvement are tOPICS to be raIsed by the Chamber WIth ItS membershIp In the near future, the Chamber WIll also address membershIp reactIOn to the provlSlon of waste management serVIces by a pnvate company 35 FmancIaI TIns sectIOn analyzes the cost to the KMC of provIdmg sohd waste management servIces It sets this cost WIthIn the context of mumcipal revenues and expendItures Fmally, It dIscusses Issues on cost recovery for SWM I Trends m mumcipal revenues and expendItures are assessed over a fIve-year penod m order to make mdicative prOjectIOns for the next five years Forecastmg the fmancIaI posItIOn of the KMC enables an assessment to be made of the amount of funds that could be made avaIlable for I SWM m the future 3 5 1 Local Government Revenues and ExpendIture I Revenues and expendItures for the KMC from 1994 to 1997 and estImates made from the 1998 budget are shown m ExhIbIt 3 9 MUll1CIpal revenues (excludmg water and electncIty) have Increased from Rs 109 8 mllhon m 1994 to Rs 167 5 mllhon In 1997 Budget forecasts for I 1998 mdicate an mcrease to Rs 1994 millIon Smce 1996, the KMC has reahzed a cash surplus from Its mumcipal operatIOns In 1994 and 1995, defICIts were eVIdent ProfItS from electncity and water supply servIces covered the losses, Implymg cross SubSIdIes from these servIces to • other mumcipal actIvIties The major source of revenue has been the revenue grants of central government, which finance I up to 80 percent of the salarIes of KMC employees Rates or property taxes constItute the next major source From 1994 to 1996 these have remamed relatIvely constant A sIgmficant mcrease m the revenue from general rates, however, was expenenced m 1997 and further Increases are I forecast m the budget for 1998 The Increase m 1997 IS attnbuted to the ImplementatIOn of a mumcipahty-wide property revaluation1 undertaken m 1993 Further mcreases are expected m 1998 because of the full ImplementatIOn of the revaluatIon The revaluatIOn of propertIes has I enabled the KMC to reduce the general rate percentages for reSIdential propertIes from 18 per cent m 1996 to 6 percent of the annual rental value, and for all other propertIes (mcludmg t government departments, commerCial, and mdustnal propertIes) from 24 percent to 14 percent I 1 PropertIes are generally revalued once III five years The last revaluation of properties III the KMC was carned out III 1993 However rrnplementatlon was delayed until the 1997 1998 penod 1 e after five years Had the 1993 revaluatIOn I been Implemented ill 1994 on schedule a further revaluatlon could have taken place III 1998 "'lth slgmfcant ImphcatlOns on mumclpal revenues I I EXHIBIT39 KANDY MUNICIPAL COUNCIL REVENUE AND EXPENDITURE ACCOUNTS FROM 1994 to 1998 (Rupees Thousands) I I 1994 1995 1996 1997 1998 Actual Actual Actual Actual Budget I (Draft) REVENUE Rates I 19405 19,595 19,458 30,995 36,000 Rents I 7,470 15,807 9,983 11,608 18,792 LIcense fees 4,795 5,957 4414 11,542 6025 Fees for services 6601 6853 8,793 13,666 10270 I Other Income 1,451 2607 23,065 26,518 38359 Revenue grants 70035 68,386 68,565 73,121 89950 Sub Total 109,757 119,205 134,278 167,450 199,396 I Revenue from water 62057 71 389 73,010 75787 107283 Revenue from electricity 179,469 185,131 I~T~ 351,283 375,725 207,288 243,237 306,679 • RECURRENT EXPENDITURE Salaries I 67,868 84,668 79,573 84,773 110755 Supplies I I 14,613 19,458 18,334 19448 27337 I Repairs/maintenance 511 1,141 1,255 910 2170 Pensions etc I 23000 19137 21624 22756 34834 Other expenses I 6819 8992 12,506 9725 17911 • SubTotal 112,811 133,396 133,292 137,612 193,007 Water supply expenses 59,188 59,149 62,122 61265 98019 Electricity expenses 170065 180349 I ~ I 342,064 372,894 195,414 198,877 291,026 Net Surplus/Deficit) without Water & Electricity (3,054) (14,191) 986 29,838 6,389 Net Surplus/Deficit) with Water & Electricity 9,219 2,831 11,874 44,360 15,653 I Interest payments I 223 566 1,629 1678 3,083 Capital grants 16982 3799 2129 12,447 Capital expenditure 45566 42099 62638 45474 a I Source Kandy MC, Annual Accounts 1994 to 1996 Draft Accounts 1997 and Budget 1998 I I I Note 11 Electricity services were taken over by the Ceylon Electricity Board In 1996 I I I I - 33- Other slgmficant revenue mcreases relate to the category of "other mcome " ThIS mc1udes stamp duty on property transfers and mterest on fIxed deposIts 2 ExpendItures on mumclpal servIces, excludmg water supply and electnclty, m current pnces has remamed farrly StatIC from 1995 to 1997 Slgmflcant mcreases, however, are forecast for 1998, particularly for salanes and penslOns A dIfferent pIcture emerges when revenues and expendItures are convert~d mto constant 1998 pnces ExhIbIt 3 10 mdlcates that there have been real decreases m mumclpal revenues from 1994 to 1996 Estimates for 1997 envIsage real mcreases, WhICh are forecast mto 1998 The revenue from general rates has decreased m real terms from 1994 to 1996, but has shown a slgmflcant mcrease m 1997, wIth a modest mcrease forecast for 1998 Revenue grants from central government have dec1med m real terms from 1994, followmg the real salary decreases However, they are forecast to mcrease m 1998 I Smce the begmmng of 1996, the provIsIon of electnclty was taken out of mumclpal control Water supply IS stul under the responslblhty of the KMC, but It IS separately accounted for and 1 fIgures show that It has consIstently reahzed a surplus Several conc1uslOns can be drawn from this analYSIS Frrst, local authontles are hIghly dependent I on the collectlOn of local property taxes (the general rates) and the receIpt of central government revenue grants Fmance IS tIght and the ever-mcreasmg demand for servIces means that the KMC needs to seek ways of lmprovmg efficIencIes, mcreasmg value for money m serVIce provlSlon and reducmg costs wherever possIble Second, a more accurate accountmg of each I mdIvldual mumcipal servIce IS reqUIred to ascertam actual costs of provislOn Thrrd, the accountmg prmclples for mumclpal finances do not adequately dIstmgulsh between operatmg and I capItal expenses 3 As a result, the depreciatlOn costs of fIXed assets are not presented satIsfactonly These have lmphcations on determlmng the real cost and fmancmg of SWM m Kandy I 3 5 2 Cost and FInanCIng SWM In Kandy The estlmated total cost of SWM m Kandy m 1998 IS Rs 29 34 ml1hon (see ExhibIt 3 11) ThIS I has been calculated on the basIs of a number of assumptlOns and WIth reference to the budget forecasts prepared by the KMC for 1998 Key assumptlOns and data mc1ude • the SWM servIce employs 409 laborers, 20 dnvers, and 33 supervIsors/staff, a total of I 462 persons, these numbers would be retamed, I 2 Stamp dunes on property transfers are paId by purchasers to the Provmclal Council (PC) Fees collected from property transfers taking place Wlthm the KMC are submitted to the MC by the PC The KMC has large fixed depOSits m banks I because of surpluses of prevIOus years These earn substantial mterest 3 The costs of land and bUlldmgs are not shown III local government balance sheets A l1stmg of land and bulldmgs owned by the KMC IS aVaIlable showmg ownershIp of a number of propertIes mcludmg markets and shops All capItal expendIture Illcurred on land and bUIldmgs IS charged to the revenue and expendIture appropnatlon account hence are I 'deprecIated III the year they are spent All other fixed assets such as vehIcles, plant and eqUIpment are not deprecIated at all I I EXHIBIT 310 KANDY MUNICIPAL COUNCIL REVENUE AND EXPENDITURE ACCOUNTS FROM 1994 to 1998 (AT 1998 CONSTANT PRICES) (Rupees Thousands) 1 1994 1995 1996 1997 1998 Actual Actual Actual Actual Budget I (Draft) REVENUE I Rates 30,854 27237 23,933 34095 36,000 Rents 11877 21,972 12,279 12,769 18792 License fees 4,794 8,280 5429 12,696 6025 Fees for services 10,496 9,526 10,815 15,033 10,270 I Other Income 2307 3,624 28,370 29,170 38,359 Revenue grants 111 356 95057 84,335 80,433 89950 Sub Total 171,684 165,695 165,162 184,195 199,396 I Revenue from water 98671 99231 89,802 83366 107283 Revenue from electricity 285356 257,332 I ~~~ 555,710 522,258 254,964 267,561 306,679 RECURRENT EXPENDITURE Salaries 107,910 117,689 97,875 93,250 110,755 Supplies 23235 27047 22,551 21,393 27,337 I Repairs/maintenance 812 1,586 1,544 1,001 2,170 Pensions etc 36,570 26,600 26,598 25,032 34,834 Other expenses 10,842 12499 15,382 10698 17911 I Sub Total 179,369 185,420 163,949 151,373 193,007 Water supply expenses I 94109 82,217 76410 67392 98019 ElectriCity expenses 270403 250,685 I f§!1l~8JiRf 543,882 518,323 240,359 218,765 291,026 Net Surplus/Deficit) without Water & ElectriCity (7,686) (19,725) 1,213 32,822 6,389 Net Surplus/Deficit) with Water & ElectriCity 11,829 3,935 14,605 48,796 15,653 I Interest payments 355 787 2,004 1846 3083 Capital grants 27001 5281 2619 13,692 I Capital expenditure 72450 58,518 77,045 50,021 Cumulative Inflation facors used 1 59 139 123 1 10 I I I I I EXHIBIT 311 COST OF SWM IN KANDY AND TOWN CENTER -1998 I Town No Rate/year Kandy No Center I (Rs) RsOOO Rs 000 Rs 000 Salaries & Wages Engineer I 1 94,800 95 Supervisors 29 56000 1624 6 336 Clerks 3 69000 207 1 69 Drivers 20 60,000 1,200 4 240 Labor - permanent 250 44,000 11 000 44 1,936 Labor - casual 159 36000 5724 23 828 Sub-Total 462 19,850 78 3,409 Staff holiday pay 800 137 Petrol & diesel 1,200 512 Uniforms 100 43 Brooms 500 213 Repairs & mamtenance 300 180 Travelling I 60 26 ElectriCity 150 64 Additional expenses dUring Esala perahera 600 480 DepreCiation of vehIcles & eqUipment 888 739 Sub-Total 24,448 5,803 Overheads of Kandy MC - 20% on cost 4,890 1,161 Total 29,338 6,963 I Estimated SW collection per day I M/tons 84 36 - Estimated SW collection per year M/tons 30,551 13,031 I Umt cost of SWM RslTon 960 534 Sources Actual labor utilization m April 1998 Salary rates and expenses from 1998 Kandy MC budget I Depreciation calculated at 12 5% per year on cost of fixed assets I SW collection figures estimated by the MC Engineer I I I I I 36 - • average annual salarIes and wages of Rs 94,800 for the chIef engmeer, Rs 56,000 for supervIsors, Rs 69,000 for clerks, Rs 60,000 for dnvers, Rs 44,000 for permanent laborers, and Rs 36,000 for casuals, • estunates of O&M expenses contamed m the 1998 budget forecasts, • depreCiatIOn of vehIcles and other eqUipment calculated on the baSIS of the assumed useful hfe of each asset, and • Murnclpal CounCIl overheads estImated as 20 percent of all costs From the murncipalIty-wide figures, ExhibIt 3 11 also shows that the cost of SWM for the center or Zone 1 area IS estImated to be Rs 6 96 mIllIon ThIS was calculated on the baSIS of • the employment of 78 full-tIme persons m the town center area, compnsmg 67 laborers, 4 dnvers, and 7 supervIsors/staff, • average salanes at the same rates noted above, • • staff expenses apportIOned on the baSIS of the above salanes relative to the total for SWM, • 80 percent of the speCIfIC expenses attrIbuted to Esala Perahera apportIOned to the town I center, • depreCiatIOn based on the lIfe of the vehIcles and eqUipment aSSIgned to the town center, • 60 percent of total reparrs and mamtenance costs apportIOned to the town center, I • other expenses apportIOned on the baSIS of estunated solId waste collectIOn quantities, and • Murnclpal Councl1 overheads estunated as 20 percent of all costs I It has proved chfficult to establIsh the actual cost of SWM m prevIOUS years because of problems m desegregatmg figures from those compl1ed by the KMC Costs relatmg to SWM are contamed I under the Health ServIces program of expendIture and are not separated as a speCIfic cost center It IS understood, however, that, from 1998 on, SWM costs may be consIdered a separate cost I center GIven the costs of Rs 2934 mIllIon for SWM m Kandy and Rs 696 ml1lIon for the town center area and annual garbage collectIon volumes of 30,551 metrIC tons and 13,031 metrIC tons, I respectIvely, It IS estl..t11atedJhat the- -costa of collectmg and disposmg garbage m Kandy IS some Rs 960 per metnc ton For the town center area, thIS IS estImated to be lower Rs 534 per metnc ton Tlus ImplIes a much lugher urnt cost of collectIOn for the areas outSIde the town I center than Withm It, WhIch WIll have sIgrnficant cost ImplIcations on the MC If the serVIce IS separately controlled or admtrnstered I There are several reasons for the VarIatIOn m the urnt costs between the town center and the town overall • More labor IS reqUITed to servIce Kandy overall compared to the smaller town center area I • The town center has a greater concentratIOn of commerCIal and mdustnal actIVItIes, hence I there are economIes of scale I I - 37- 3 5 3 PrICIng and Cost Recovery PolIcIes for SWM In common WIth all other local authontles, the KMC does not unpose a dIrect charge for SWM The cost of SWM IS recovered mdrrectly from mumclpal revenues, particularly the general rates and the centrally funded revenue grants The KMC does, however, charge for solId waste collectIon when a resIdent or busmess makes a special request for servIce A charge of Rs 159 IS made pertractor load In-general, the public and the buSlfleSS commumty expect solId waste collectIOn servIces to be funded out of mumclpal revenues DIScUSSIons WIth the KMC revealed that there were no plans to unpose drrect user charges for solId waste management servIces m the near future There are neIther spt"cifiC pTlcmg polIcIes nor dIrect cost recovery mechamsms for SWM 4 4 Findings, ConclUSIOns, and Recommended Strategy ThIs sectIon summarIZes the fmdmgs and conclusIOns of the assessment of Kandy's solId waste management operatIOns Problems are IdentIfIed and a strategy IS formulated to unprove the operatIOns of street sweepmg and waste collectIon m the town center PnvatIzatIOn of the opera • tIOn IS recommended as a way to unprove effICIency and effectIveness 4 1 Techmcal 4 1 1 Street SweepIng and Waste CollectIOn In the Town Center FIndIngs Operatzonal EffICIency I The SWMD collects an average of about 36 metrIC tons per day from the Kandy town center An addItional 4 metrIC tons of uncollected waste has been estunated, some of WhICh IS bemg • hauled outsIde Zone 1 and unproperly dumped The eXlstmg waste management operatIOn has been unable to cope WIth the magmtude of the waste generated m the town center from resIdents and busmesses, as well as the mgh level of I lIttermg Waste that IS collected IS stored loose at collectIOn pomts, until transferred to the dIsposal SIte I CollectIOn of tills waste IS a labor-mtenslve task I Durmg the transport of waste to the dIsposal SIte, refuse IS often spIlled from the tractor/traIler umts used I Publlc Health RIsks Improper waste management presents a number of potentIally senous publIc health nsks and SOCial costs The most senous IS that unproper storage and handlmg of waste aIds the spread I of dIseases Waste prOVIdes food that can spread dIseases, partIcularly rodents (rats) I 4 In contrast the KMC has pncmg and cost recovery poliCIes for water supply serVIces I I 38 ConclUSIOns Operational EffIcIency The KMC needs to unprove the operatIOnal effIcIency of Its waste management servIces, particularly m the town center A more effICIent servIce would • reduce the amount of waste that IS uncollected, • control the level of lIttenng to reduce the collectIOn effort, • provIde storage contamers at the collectIon pomts, or preferably elunmate thIS step, and • reduce/elunmate spIllage as waste IS bemg transported to the dIsposal sIte Publzc Health RIsks A management system IS needed m Kandy that addresses potential publIc health nsks through proper contamment and collectIOn of solId waste Management Options Several options can be pursued to achieve operatIOnal effICIency and reductIOn of publIc health I rIsk One option IS to Improve KMC effiCIency and effectiveness m ItS waste collectIOn opera tIOn Another option IS to contract WIth a pnvate company to prOVIde thIS servIce I For several reasons, a pnvate contractor IS the preferred approach • Operational effICIency wIll be greater, smce a pnvate company wIll have a fmancial mcentive to prOVIde waste management servIces m a more effective manner m order to , reduce costs, •A pnvate company WIll have greater fleXIbIlIty m hmng and removmg employees that fall to perform and m fmancrally rewardmg outstandmg employees I •A pnvate contractor WIll have a contractual oblIgatIOn to perform to a speCIfied level, and faIlure to achieve these oblIgatIOns WIll result m fmancial penalties I •A pnvate company wIll have a more focused approach to provIdmg waste management servIces than will the KMC, winch IS responsIble for carrymg out a WIde range of other I tasks A focused approach WIll result m a more effectIve and effICIent operation Recommended Strategy The KMC should pursue pnvatIZatIOn of street sweepmg/waste collectIon servIces m the town I center 4 1 2 Non-Town Center SpeCIfic ActIVItIes I Waste CharacterIstIcs Fmdmgs I There IS a lack of relIable data on the quantIty of waste bemg generated The InformatIon presented m SectIon 3 1 IS based on a number of assumptIOns, mcludmg an assumed generatIOn I rate and waste densIty I I - 39- ConclusIOns The lack of data may lead to mvalId conclusIOns bemg drawn regardmg the type and amount of eqUIpment needed to properly manage wastes Furthermore, It creates uncertamty on the quantIty of uncollected waste Recommended Strategy The SWMD should weIgh each of the collectIOn vehIcles when loaded Each vehIcle should be weIghed on several occaSIOns (e g , three to SIX tImes) over a penod of tIme (e g , one to two months) The crew should not be nOtifIed pnor to a welghmg to aVOId ItS trymg to mcrease the waste placed on a vehIcle ThIS mformatlon WIll provIde the SWMD WIth more rehable data on the quantIty of waste bemg managed and WIll be a baSIS for assessmg the type and amount of eqUIpment needed for waste collectIOn EXIstmg Techmcal/OperatIOns CondItIons Street Sweepmg and Waste CollectIOn - Operanons FIndIngs A sigruficant amount of labor IS devoted to street sweepmg because waste IS bemg httered, rather than properly placed mto contamers for collection LIttermg provIdes feedmg I and breedmg areas for dIsease carrymg arumals, Insects (flIes), and bIrds, all of which represent a potential pubhc health nsk It also gIves the commerCial and rehgIOus areas m the I town center an unsIghtly appearance that could adversely effect customers and VISItors Waste and lItter collected by the sweepers IS deposIted at collectIOn pomts for plckmg up and transport to the dISPOSal SIte At the collectIon pomts, waste IS stored loose, and reqUIres a SIg I ------mfica..~t a..'110u..'lt-ef rehandlmg by the collectIon creW- Tne nanmmg TIfioose waste at collectlOn I pomts presents a range of potential health and safety hazards ConclUSIOns Waste management, at least m terms of storage and collectIOn, IS a matenals handlmg Issue As WIth any other matenal, the fewer tImes waste IS handled, the more cost I effective IS the process Waste generated by merchants, reSIdents, and mstitutIOns needs to be properly stored m a con tamer or plastIc bag pnor to collectIOn IndIVIduals need to use htter contamers rather than dIS I cardmg waste on the street I Under the eXlstmg system, waste should be placed m contamers at collectIOn pomts ThIS would IIlllllllllZe the work of collectIOn crews m transfernng waste to a collectIon vehicle and allow a crew to collect more waste m a day A faster transfer of waste at the collection pomts I wIll reduce the number of velncles needed for transportmg waste to the dIsposal SIte Handhng waste m contamers rather than loose reduces the health and safety problems I Recommended Strategy The followmg t:hJ;ee recommendatIOns would result m a more effective waste collection process • Contamer Use Ordmance The KMC should pass an ordmance that would reqUIre waste I generators, partIcularly those located m the town center, to use a contamer (pall or I I - 40- plastIc bag) for waste storage pnor to collectIOn or should provIde one for them to use The generators also should be reqUIred to place them at the curb at a specIfIed tIme for emptymg • Pubhc EducatIOn An educanon program should be Implemented by the KMC ThIS wIll need to be an ongomg effort to ensure complIance WIth proper waste storage and handlmg procedures Even WIth educatIon, the town wIll need to establIsh penaltIes and enforce them to gam complIance from those generators who are unwIllIng to modIfy theIr behavIor • Collecnon Pomt Contamers Contamers, manageable by the crews, should be placed at collectIOn pomts Waste brought to these pomts would be placed m the contamers, WhICh would be emptIed mto the collectIOn vehIcles ... Street Sweepmg and Waste CollectIOn - Customer IdentifIcatIOn FIndIngs There IS a lack of current InfOrmatIOn on the number and type of waste generators located on each road and the correspondIng routes The current mformatIOn IS about fIve years old I ConclUSIOns Up-to-date Information would allow for relIable planmng on routmg Such InformatIOn would allow routes to be balanced based on the waste dIscarded by types of generator (commercIal busmess, mstItutIon) and therr specIfIc aCtiVIty (restaurant, retaIl shop) I Waste generatIOn rates and composItIon tends to dIffer by type of generator and actIVIty As an example, restaurants have a hIgher percentage of food waste, whIle retaIl shops dIscard I more paper Understandmg the waste generators (customers) on each route and theIr waste management I needs IS unportant to prOVIde an acceptable level of servIce It WIll also be unportant to a pnvate contractor In assessmg the level of effort that will be requrred to proVIde an appropnate collectIOn servIce m the town center I ImplementatIOn of the recommended strategIes on contaIner use and publIc educatIOn WIll be expedIted WIth a better understandmg of the types of premIses m the town center I Recommended Strategy A detaIled lIstmg of all customers should be prepared and mamtamed ThIs wIll requIre the collectIon of data on waste generators to establIsh a database I The ImtIal lIst and updates could be compIled from the property tax records of the KMC Street Sweepzng and Waste Collection - Transport to DIsposal SIte I FIndIngs The rear wall on trailers that transport waste to the dIsposal SIte IS often lower than those on the other three SIdes ThIs deSIgn allows waste to spIll onto roadways Laborers often try to use pIeces of the waste collected (corrugated paper) to prevent SPillage Nevertheless, I waste spIllage IS eVIdent on the road to the dIsposal SIte ConclUSIOns An extensIOn of the rear tall gate to at least the same heIght as the other walls I wIll SIgnIficantly reduce waste spIllage Such an extensIon could be hmged m several ways to I I - 41 - allow It to be moved out of the way durmg waste loadmg and unloadmg, yet moved back mto posItion when a traIler IS bemg transported Recommended Strategy A rear gate extenSIOn should be added to traIlers that have a rear wall lower than the other three Dzsposal - 8zte Capaczty Fmdmgs The eXIstmg dIsposal sIte has a hmited remaImng capacIty that WIll be consumed m about 3 5 years At present, the sIte's deSIgn IS to dump waste to a level that IS hOrIzontal WIth the top of the ravme bemg fl1led There IS OpposItIOn by neIghbors to the current sIte because of envIronmental problems However, an adjollling property owner may be wIlhng to sell land for use as a dIsposal sIte There IS no apparent mterest by other commumtIes m the area to host a replacement dIsposal sIte ConclUSIOns ExpansIOn of the eXIstmg dump may be pOSSIble by purchasmg land adjacent to I the dIsposal SIte to allow a honzontal expanSIOn of the operatIOn AddItIOnal capaCIty could also be obtamed by expandmg the dISPOSal operatIon vertIcally, which would mvolve moundmg I waste over the hOrIzontal plane of the current fIll A vertIcal expansIOn could add a number of years of hfe to the dIsposal SIte Such an operation, WIth an acceptable SIde slope angle (e g , 3 to 1) and appropnate fmal cover, would I dIvert preCIpItatIOn away from the waste better than a hOrIzontal surface Water dIverSIOn WIll reduce the volume of leachate leakIng from the base of the dump (See next sectIon on dIsposal sIte) On a horIZontal surface, water IS unable to dram away from the waste and WIll percolate I through, producmg addItIOnal leachate Recommended Strategy The KMC should seek to expand the dIsposal capaCIty through the I acqUISItion of adjacent land and mcreasmg the heIght of the eXIstmg dIsposal SIte WIth development of a new dIsposal operatIon on adjacent land and/or a vertical mcrease, a SUitable I deSIgn should be prepared to control the enVIronmental effects of dISPOSal Dzsposal 8zte - Envzronmental/Publzc Health I FIndIngs The dIsposal SIte IS an open dump that IS pollutmg the envIronment and servmg as a nUisance to ItS neIghbors Problems mclude • water pollutIOn from leachate, I • aIr pollUtion from smoldenng fues III the waste mass, and • potential publIc health hazards I ConclUSIOns The envIronmental and nUisance aspects of the dIsposal SIte can be mllliIDlZed I through modIfIcations to current practIces I I - 42 - Leachate from the dIsposal sIte appears to be InlXmg WIth groundwater and flowmg toward the MahawelI RIver The leachate could be mtercepted for treatment One option to recover leachate IS to dIg a trench between the dIsposal sIte and the nver A soIl bonng at the base of the dIsposal sIte mdicated that bedrock mIght be at 4 5 meters below the surface Addltlonal bonngs are needed to determme actual depth to bedrock The SWMD has proposed concentratmg the workmg face of the dump sIte to an area smaller than the entrre front of the dIsposal sIte A controlled workmg face combmed wIth regular cover (soIl) wIll mirumIZe the potential for waste fIres and reduce publIc health hazards Recommended Strategy The resources needed to collect and treat leachate should be sought and made avaIlable to rmrunnze the lffipact on water qualIty Control of the fIllIng area should be lffiplemented and cover applIed on a regular baSIS - One optIOn for covenng IS WIth constructIOn debns, WhIch appears to be dIscarded mamly along roads A combmatIOn of antidumpmg enforcement regulatIOns and a nommal charge to cover the extra cost to transport constructIon debns to the dIsposal sIte wIll encourage the I delIvery of at least part of the cover matenal needed AddItIOnal cover matenal could be obtamed by excavatmg a portIOn of the closed dIsposal sIte The matenal m thIS area should have decomposed and be SUItable for use as cover on the I operatlng portIon of the fIll Before the SWMD proceeds, however, samples from the former dIsposal area need to be taken to determme If the waste IS suffICIently decomposed I Waste Recovery Fzndzngs The current state of formal recyclmg and compostmg actIVIties has a mlnlffial lffipact on reducmg the quantIty of waste for collectIOn and dISPOSal Recyclmg and compostmg, however, are at an early stage of lffiplementatIOn ConclUSIOns Both recyclmg and compostmg can play a more lffipOrtant role m waste management m the future I Recommended Strategy The SWMD should actively momtor recyclIng and compostmg, not only m the Kandy area, but also elsewhere m Sn Lanka, to make use of the findmgs for the reductIOn of waste I generatIOn The SWMD should support these actIVItIes through the supply of waste to be composted, par I ticularly for BEST and the Umversity of Perademya However, the SWMD should have a clear agreement to stop waste supply, If the recovery operatIOn creates adverse envIronmental or I nUIsance effects I I - 43- 42 FmancIaI A summary of the fmdmgs and conclusIOns on the fmancIaI management of SWM are gIven below 4 2 1 Fmdmgs and ConclusIOns The costs of SWM are recovered out of general mumcipal revenues, essentially the general rates, hence, those WIth higher value propertIes Will pay more There are no specIfIc allocations from these revenues for SWM Estimated costs to provIde the servIce are budgeted as expendIture Items and paId for accordmgly The cost analysIs presented m SectIOn 3 5 2 shows substantially dIfferent costs per umt of garbage collected and dIsposed from the town center area and elsewhere m Kandy Impllcit IS that there IS a cross SUbSIdy from the town center to other areas DIrect charges for SWM are not Imposed at present and there are no plans for theIr mtroduction m the ImmedIate future I Because of the nature of current local government accountmg pollces and procedures, It IS dIffICult to establIsh the preCIse costs of the SWM operation I 4 2 2 Recommended Strategy An ImmedIate mtroduction of dIrect user charges for SWM IS unllkely to be acceptable polItically, socIally, and admimstratIvely, hence, the costs of SWM should contmue to be I recovered out of general revenues To establlsh the real cost of SWM m Kandy, there IS a need to develop a cost accountmg system for SWM actIVItIes ThIs would enable the proper allocatIOn of dIrect costs and mumcipal over heads together WIth adequate allowances for the depreCiatIOn of fixed assets • The KMC should consIder the evaluatIon of alternative cost recovery mechamsms for SWM for pOSSIble ImplementatIon over tIme DIrect servIce charges IS one alternatIve - 5 Description of Pilot Project 5 1 Project Brief I 5 1 1 RatIOnale and Objectives RatIOnale I The town center covers about 11 percent of the area of Kandy, but accounts for 43 percent of the waste delIvered to the disposal site Although the eXlstmg service collects on average about I 36 metric tons per day, an estImated 4 metnc tons per day are uncollected The town center IS also the focal area of the commerCIal and mstitutIOnal actIVIties of Kandy and for tOUrIsm Mamtenance of a clean, aesthetIcally pleasmg area IS Important to retam ItS func I tions as a thnvmg regIOnal center I I 44 - Hrrmg a pnvate contractor to collect and transport garbage from the town center wIll enable the KMC to establIsh a standard of servIce for the provIsIon of an appropnate level of clearung The contractor wIll be able to provIde thIs servIce WIthOut the eqUIpment and staffmg constramts that would have to be addressed by the SWMD Furthermore, to meet the standards set by the KMC, a qualIfied contractor WIll purchase the necessary eqUIpment to servIce the operatIon m a cost effectIve manner and use It accordmgly Objectives The key ObjectIve of the pIlot project IS to provIde an Improved level of waste management servIces m Zone 1 through the effiCIent collectIOn of waste from generators and transport to the dIsposal sIte, whIle reducmg publIc health and envrronmental hazards To make thIS project acceptable to the KMC, the contractor should provIde thIs serVIce at a charge that IS at or below - the current cost of a SImIlar servIce 5 1 2 Scope of the Project Project Area The focus of the project IS Kandy's town center, also known as Zone 1 ThIS target area I currently excludes the market area, a separate waste management admlrustratIve zone from Zone 1 The KMC could deCIde to (1) mclude the market m the area to be servIced by a pnvate company, (2) add the market to the area served by a pnvate contractor at a later date, or I (3) contmue to have the SWMD servIce the market area Term I The pnvate contract should be of suffIcIent duratIon to allow the contractor to deprecIate ItS eqUIpment A sUItable term IS fIve years ThIS penod IS used m the draft tender and contract I documents presented m SectIon 7 An alternate arrangement would be a three-year agreement WIth two one-year renewable OptIOns I ExerCIse of the optIon years would be at the KMC's dIscretIon Contractor Services I The serv'lces to be provIded mclude \"aste collectlOll,-Street sweepmg, and transport to a dIsposal SIte I Waste CollectIOn All reSIdentIal, commerCIal, and mstItutlonal entItles In Zone 1 are to have theIr waste collected at least once per day for SIX days a week Larger generators eIther are to be served I seven days per week or be provIded WIth suffiCIent contamers for samtary waste storage on Sundays Waste IS to be collected In compactor trucks I The contractor wIll prOVIde suffiCIent contamers to larger waste generators for proper storage pnor to collectIOn The contamers are to be of suffICIent SIZe that all waste stored may be I contamed mSIde and none placed on the ground I I - 45- The collection servIce would be for murncipal sohd waste only and would exclude hazardous, mfectIOus, and other such waste Street Sweepzng The streets m Zone 1 are to be cleaned so that a lItter-free appearance IS mamtamed throughout the day LItter contamers are to be placed at regular mtervals along roadways, so that pedestrIans wIll have a place to properly dIspose of theIr trash The mmnnum placement of htter contamers should be one per block on each SIde of the street Transport Collected waste and htter are to be transported to a dIsposal SIte WIthOut spIllage from the load The eXIstmg dIsposal SIte IS eIght kIlometers from the town center The contractor WIll transport waste this dIstance or to an alternate SIte at a SImIlar dIstance If a new dIsposal SIte IS located farther away, the addItIOnal transport expense WIll be a pass-through charge to the KMC Pass-through expenses would be based on actual cost MUnICipal CouncIl ResponsibIlitIes • CollectIon servIces wIll be paId for out of the general rates The KMC WIll pay the contractor for the serVIce proVIded on a monthly baSIS Assurance should be proVIded to potential contractors on the KMC's abIhty to pay for waste management servIce ThIS WIll address a perceIved nsk of default through non-payment of the serVIce fee The KMC also should pass SUitable ordmances that reqUire waste generators to set out theIr waste m contamers for collection and others that prohibIt httermg Enforcement of these ordmances should be undertaken to the extent needed to help remedy these Issues A program to educate the pubhc on proper waste collectIon practices and to modIfy behaVIOr that results m httermg should be Irntlated by the KMC Actual development and ImplementatIOn of the program could be subcontracted to another entIty, such as an NGO 5 1 3 Expected Benefits Major benefits of pnvatIzation wIll stem from an mproved and more effiCIent waste management I servIce m the town center The quantIty of waste collected IS expected to mcrease by reducmg the amount of uncollected waste This WIll arIse because of the standard under WhICh the con I tractor WIll be reqUITed to perform Improved waste collectIon servIce m the town center wIll benefIt those who work and VISIt the area through reduced publIc health nsks The area wIll be cleaner and will present a better mage I of the town This WIll encourage VISItors to return, as well as to recommend Kandy to others, partIcularly tounsts I I I • - 46- 5 1 4 Potential Constramts and MItIgatIon Measures The dIsplacement of SWMD employees currently assIgned to the town center IS a concern For permanent laborers, there IS a suffICIent shortfall between the number employed by the SWMD and the number needed for the other fIve zones These employees could be shIfted to other areas The number of casual laborers needed by the SWMD would, however, be reduced A condItIon m the contract could be that the contractor should consIder eXlstmg employees for employment To the extent that these employees are hued by the contractor, they would benefIt by havmg regular employment 5 1 5 CondItIOns Contractor The selected contractor must demonstrate an abilIty to perform the scope of work m a competent manner In addItIOn, the contractor must show that It has the finanCIal capaCIty and stabIlIty to undertake the servIces over the fIve-year penod Mumclpahty The mumcipalIty needs to proVIde an assurance that the contractor WIll receIve payment for the serVIce to be proVIded 5 2 ProJect Plans 5 2 1 LocatIOn of ServIce The contractor would servIce the town center area, defmed as Zone 1 by the SWMD (see Exh.lb.lt-2 3) The-sen.ee could lllclude the marlret-area, whIch IS a separate area from Zone 1 However, the tender and contract documents presented m SectIOn 7 are based on serVIce bemg prOVIded to Zone 1 only 5 2 2 DIsposal SIte Collected waste and lItter wIll be transported to the KMC's dIsposal sIte, eIght kIlometers from the town center The eXlstmg dump has 3 5 years of lIfe remammg, but the potentIal eXIsts to mcrease ItS sIte lIfe through honzontal and/or vertIcal expansIOn ThIs would mcrease the dIsposal capaCIty beyond the projected fIve-year term of the agreement Should both expansIOn optIons fall to be achIeved, the KMC wIll need to IdentIfy another dISPOSal facilIty In thIs case, the contractor WIll be reqUITed to transport waste from Zone 1 to the new dISPOSal sIte Should thIS occur and the transport dIstance IS longer than eIght kIlo meters, the contractor's addItIonal expenses WIll be paId by the KMC on a pass-through baSIS of the actual extra costs mcurred - 47 5 3 -----Project DesIgns and Costs 5 3 1 Level of ServIce and Standards Waste CollectIOn The contractor wIll be reqUIred to collect waste from all premIses (resIdences, commerCial busmesses, mStItutIOns) m the town center, at least once per day for SlX days per week Waste collectIOn wIll be provIded seven days a week to larger generators that operate on weekends, such as Kandy General HospItal and hotels, as shown m ExhIbIt 2 4 (page 12) The selected contractor wIll collect waste dIrectly from each generator WIth compactor trucks ThIS wIll elImmate the need for temporary waste storage at the collectIOn pomts The contractor could be allowed to forego collectIOn on Sundays and holIdays, If waste storage contamers of suffICIent capacIty are proVIded to the generators If a holIday follows a Sunday, the contractor wll1 need to proVIde servIce to those generators whose contamers reach capacIty Street Sweepmg The selected contractor will be responsIble for lItter removal from the publIc streets m the town center At a mInlffium, the contractor WIll sweep each street once per day The contractor should have the sweepers collect lItter m a hand cart lmed WIth a plastic bag The bag and the collected debns wll1 be deposIted m lItter contamers strategIcally placed along theIr routes There will be at least one lItter contamer on each block The contractor WIll coordmate WIth the KMC on the locatIons of the contamers All lItter contamers are to have a surface SUitable for placmg anti-lItter posters, WhICh are to be posted and mamtamed through the contract penod The contamers are to be emptied dallY, except on Sundays and holIdays, unless a festlvaiis bemg held m Kandy Durmg festIvals, the contractor IS to proVIde suffICIent staff and eqUipment to mamtam the cleanlmess of streets and to servIce busmesses (hotels) and mstitutiOns (temples) that requIre waste collectIOn Generators wIll be reqUIred to contact the contractor when theIr waste con tamers are reachmg capaCIty Transport Waste IS to be transported to the dISPOSal SIte WIthout spIllage or blowmg from the vehIcle 5 3 2 ComparIson of Alternative SolutIOns Two alternatIves to the preferred optIOn descnbed above were consIdered as operatIOnal/techmcal approaches to waste management m the town center • the eXIstIng approach, which uses sweepers to collect waste from each generator and to store It at collectIOn pomts for later transport to the dIsposal SIte, and • collection from each generator usmg tractor-traIler umts rather than waste compactor trucks I 48 - I Under the eXIstIng approach that uses hand carts, waste would be collected by sweepers as they pass a property The contractor would be reqUIred to posItion large contamers at the collectIOn pomts for waste storage, pnor to transfer to a vehIcle for transport to the dIsposal sIte ThIS I would mmmnze the eXlstmg potentIal pubhc health nsk From a contractor's perspective, waste m contamers could be loaded mto the transport vehIcle more qUIckly, WhICh would permIt the more effiCIent use of eqUIpment Under the second approach, tractor-traIler umts would be sub I stItuted for compactor trucks ThIS would ehmmate the need for collectIOn pomts These two alternatives, however, fall to proVIde the level of collectIOn effectiveness and I effICIency that WIll be achIeved WIth compactor trucks, which are the preferred eqUIpment for waste collectIOn I 5 3 3 LIkely Capital Investment ReqUIrements To proVIde lffiproved SWM serVIces for the town center area wIll requITe addItIOnal capItal I mvestment The total capItal costs reqUIred are estlffiated to be Rs 15 7 mIllIon m current pnces over the 199912003 penod SpeCIfIC cost Items are detaIled m ExhIbIt 5 1 Base cost estlffiates were prepared m Apnl 1998 pnces and were estabhshed as follows I • The purchase pnces of vehIcles were those quoted by local agents and mclude all taxes and duties • Three recondItIOned compactor trucks are reqUITed for garbage collection and transfer to the I landfIll SIte • Pnces for carts, bms, and other needed eqUIpment were based on prevIOUS pnces paId by I the KMC, escalated to AprIl 1998 pnces, which were checked agaInst current market pnces •A medIUm-SIZed storage bm IS proposed for each medIUm-SIZed commerCial establIshment, and one large bm IS proposed for each hotel and major mstitutIOn recelvmg the servIce I • One recondItIOned pIck-up truck and two motorcycles reqUITed for travel by the supervIsors are needed •A temporary workshop for vehIcle mamtenance and a small office wIll be constructed on I rented premIses Estlffiates of the constructIOn costs were estabhshed WIth the aSSIstance of • an MC engmeer •A nommal amount was assumed for office and workshop eqUIpment - PhYSICal contmgencles were added at 10 percent of all base costs Pnce contmgencles of 24 per cent per annum for foreIgn costs and 10 percent per annum for local costs also were mcluded to convert estlffiates to current pnces The InItIal capItal cost, amountmg to Rs 11 39 mtlhon m current pnces, was assumed to be spent m the fITst half of 1999 Subsequent capItal costs covered the replacement of all storage - bms m 2001 and agam m 2003 I - 49- I 5 3 4 implementatIOn Schedule SelectIon and start-up of a prIvatIZed waste management program for Zone 1 could be m place I by June 1999, based on the schedule gIven m ExhIbIt 5 2 The actual tune depends prunanly on the perIod needed to take the decIsIon to pursue this option and to develop the addItIonal data I to be mcluded m the work scope for the tender documents 5 3 5 Implementmg Department The SWMD will oversee the work of the contractor and assess performance Payments WIll be I made accordmg to standard procedures for contractor payments by the KMC Actual payment WIll be made by the Accounts Department I I I I I I I I I I I I i I I I I EXHIBIT 51 CAPITAL COST ESTIMATES I Value I Quantity Rate (1998) Depreciation Annual Rs 000 RsOOO Rate (%) Depreciation Compactor trucks (reconditioned) 3 2000 6,000 125 750 Carts 10 15 150 200 30 I Bins - medium 307 3 921 500 461 Bins -large 66 6 396 500 198 Pickup (reconditioned) 1 700 700 125 88 I Motor cycles 2 125 250 125 31 Communication equipment 50 200 10 Office and workshop equipment 500 200 100 I Construction of workshop/office 1,000 50 50 Total - Base Costs 9,967 1,717 Physical contingencies (10%) 997 172 I Total 10,964 1,889 I PHASING OF CAPITAL COST ESTIMATES (In Rupees Thousands) I Item 1999 2000 2001 2002 2003 Total Compactor trucks (recondition) 6,000 6,000 Carts 150 150 I Bins - medium 921 921 921 2,763 Bins -large 396 396 396 1,188 Pickup 700 700 I IVlotorcycles 250 250 Communication equipment 50 50 Office and workshop eqUipment 500 500 I Construction of workshop/office 1000 1 000 Total- Base Costs I 9,967 - 1,317 - 1,317 12,601 PhySical contingencies (10%) 997 132 132 1260 I Price contingencies 430 478 884 1 792 Total 11,393 - 1,927 - 2,332 15,653 I I I I I I - 51 - I ExhIbit 5 2 Project Schedule I Activity/Event 1998 I MId-May SubmIt draft pnvatIZatIOn report for reVIew and comment MId-June ReceIve comments and reVIse the report, mcludmg the tender documents I MId-July DecIsIon reached by the KMC to proceed WIth pnvatizatIOn August The SWMD collects addItIOnal data to more clearly speCIfy the eXlstmg servIce to prOVIde The focus of thIS work IS the appropnate recommended actIVIties I m SectIon 4 1 2 ThIs should mclude the IdentIfIcatIon of all waste generators m Zone 1 and the estabhshment of a procedure to momtor future changes when generators move mto or out of Zone 1 For larger generators, the I quantIty of waste each dIscards on a dally basIs should be estabhshed ModIfy the tender document to reflect the addItIOnal mformatIOn avaIlable I from the SWMD's defImtIOn of work to be undertaken m Zone 1 Early Sept Issue the Pre-Quahficauon Request ProspectIve contractors WIll have 45 days to respond The KMC needs to advertIse thIS tender, but prospective con I tractors also should be nOtifIed by mall MId-Sept Pre-QuahficatIOn meetmg to answer questIOns and show prospective con tractors the servIce area Meetmg should be mandatory I MId-Oct Pre-QuahficatIOn responses due EvaluatIOn of responses to take 30 days, dependmg on the number receIved I MId-Nov Issue Tender Request to those compames short-lIsted as bemg qualIfIed The short-hst should be lImIted to not more than fIve companIes ProspectIve I contractors should be allowed 60 days to prepare a tender 1999 MId-Jan ReceIve tender responses EvaluatIon to take about 45 days, dependmg on I number of responses The pnmary focus of the evaluatIon WIll be the proposed cost of servIce and the approach to be taken m provldmg the servIces I Early March SelectIOn of contractor MId-March Negotiation of servIce agreement and pnce WIth selected contractor Early Apnl Award of contract and Issue of NotIce to Proceed I Apnl-May Contractor mobIlIZation (60 days) Procurement of eqUIpment, lure staffmg, supply mamtenance yard, and related actiVIties I June Start of servIce I I - 52- I 5 4 Fmancial ConsideratIOns A JustIfIcatIon for the prIVatIZatIOn of collectIOn and transfer functIOns of SWM m the town I center area IS the achtevement of greater operatIonal effICIencIes and, hence, cost savmgs to the MC Thts sectIon lughlIghts these savmgs Furthermore, It assesses the cost Impact of the pro posed contract on the overall fInances of the KMC The fmancIaI VIabIlIty of the operatIons of I the selected contractor IS also assessed m thIS sectIOn Payments to the selected contractor under the SWM servIce contract wIll be m the form of a I regular fee paId for provldmg the servIces A number of contractors wIll bId to proVIde the servIce The KMC will select on the baSIS of several crIterIa, one of WhICh WIll be cost For the KMC to be able to establIsh a reasonable prIce for provldmg the servIces, an estImate of the I lIkely cost to be mcurred by a contractor has been made and can be used as the base for the evaluatIOn of proposals I Both the lIkely cost to the contractor and that of contmumg operatIOns m-house prOVIde a useful benchmark for the KMC to assess bIds agaInst known fIgures I 541 PrOjected Cost of Current OperatIOns to the KMC ExhIbIt 5 3 forecasts revenues and expendItures of SWM operatIOns of the KMC from 1998 through 2003 These fIgures are m current prIces and have been estImated on the baSIS of the I followmg assumptIons • a base figure for SWM expendItures for the town center of Rs 24 45 for 1998 as computed I m SectIon 3 5 1, • escalatIOn of all expendItures net of depreCIatIon usmg a local mflatIon factor of 10 percent per annum, and I • depreCIatIon mcreases m the year 2001 because of the expected replacement of vehIcles and eqUIpment I Total costs are forecast to mcrease from Rs 29 3 ml1lIon m 1998 to Rs 47 0 m~llIon m 2003 Fmancmg wIll be through the central government revenue grant and the general rates On the assumptlOn that the revenue grant amounts to 80 percent of the cost of salarIes and wages, I financmg reqUIred from other munICIpal revenues was calculated as the dIfference between total costs and estImated revenue grant Thts ImplIes a_reg!lu"ement from the genera! r-ares of -I Rs 13 5 mIllIon In 1998 Increasmg to Rs 21 4 millIOn In 2003 These figures Imply that 37 per cent of the general rates WIll need to be allocated for SWM In 1999, decreaSIng to 33 percent In 2003 ThIs IS based on forecasts made for general rate revenues that assume an annual Increase of 5 percent from 1998 to 2000 A general revaluatIOn of propertIes IS hkely to be I earned out In the year 2000, WIth ItS fulltrnplementatlOn In 2001 Hence, It was assumed that I the revenue from the general rates wIll Increase by 50 percent In 2001 On the assumptlOn that the base costs (excludIng depreclatlOn) WIll Increase by 10 percent per annum because of local mflatIon, the total cost of provldmg SWM servIces m the town center I area IS estImated to be Rs 7 6 millIon m 1999, rIsmg to Rs 10 8 mIlhon m 2003 I I I EXHIBIT 5 3 PROJECTED COSTS OF SWM OPERATIONS IN KANDY MC AND THE TOWN CENTER I (In Rupees Thousands) 1998 1999 2000 2001 2002 2003 Revenues General rates needed to fund SWM 13458 14715 16364 17885 19,558 21398 I Revenue grant 15,880 17468 19215 21 136 23,250 25575 Total 29,338 32,182 I 35,578 39,021 42,807 46,973 I Deduct Expenditures Salarres and wages 19,850 21835 24018 26420 29062 31 968 Staff holiday pay 800 880 968 1065 1,171 1288 I Petrol & diesel 1200 1320 1452 1597 1757 1933 Uniforms 100 110 121 133 146 161 Brooms 500 550 605 666 732 805 I RepaIrs & maintenance 300 330 363 399 439 483 Travelling 60 66 73 80 88 97 Electrrclty 150 165 182 200 220 242 Additional expenses durrng Esala perahera 600 660 726 799 878 966 I DepreCiation of vehicles & equipment 888 888 1,155 1 155 1,155 1,155 Sub-Total 24,448 26,804 29,662 32,513 35,648 39,098 Overheads of Kandy Me - 20% on cost 4890 5379 5916 6508 7159 7,875 I Total 29,338 32,182 35,578 39,021 42,807 46,973 SurplUS ------I Estimated expendIture In town center area 6963 7586 8270 9023 9852 10763 Proportion of general rates needed to fund SWM 37 39 41 30 31 33 I Total general rates 36,000 37800 39690 59535 62,512 65637 I I I - I - 54- I 542 Cost Estnnates of a PrivatIZed Operation to the KMC To provIde equIpment for a SWM operatIOn to adequately servIce the town center area, capItal I mvestment costs have been estimated m SectIon 53 3 to be Rs 15 7 mIllIon over the 1999/2003 penod I TYPICal annual O&M and overhead costs are estImated to be Rs 6 5 mIllIon per annum In Apnl 1998 pnces, IncludIng an allowance for profit and phySIcal contIngencIes at 10 percent of base costs WIth the addItIOn of pnce contIngencIes computed on the basIs of 24 percent per annum I mflatIon for foreIgn costs and 10 percent per annum for local costs, total O&M costs for 1999 In current pnces are estimated to be Rs 6 98 mIllIon PreCIse estimates are shown as I ExhIbIt 5 4 Base cost estlffiates were prepared accordIng to the follOWIng assumptIons I • ThIrty-one p~rsons, Includmg t\Vo super"'sors WIll be reqUJred-to provIde the servIce • Two persons wIll be employed In the proposed workshop • AdmillistratIOn support wIll conSIst of a bookkeeper and a general duty clerk I • Head offIce overheads WIll be at 2 5 percent of annual expenses • ProfIt for the contractor WIll be a mlmmum of 10 percent of total expendItures, IncludIng I head offIce overheads However, the estlffiates do not Include an allowance for fInanCIng costs that may be necessary to purchase velncles and eqUIpment Should fInanCIng be requIred, then the total annual I operatIng expenses would Increase by Rs 0 9 mIllIon to Rs 7 9 mIllIon ThIS IS based on the assumption that about 70 percent of the capItal costs would be financed through loans from the I bankIng sector In Sn Lanka, IncludIng the SANASA Development Bank An Interest rate of 16 percent per annum has been assumed on fInanCIng secured for fIve years I On the baSIS of 1998 annual expendItures, an lffiputed contractor's charge per metnc ton of garbage collected would amount to Rs 490 In 1998 pnces (see Exlnblt 5 4) AddIng a 5 percent factorS to cover the overheads of the KMC, the total cost of collectIng garbage to the taxpayers I under the pnvatIZed optIOn would be Rs 515 per metnc ton In 1998 pnces The pnvatlzed cost of Rs 515 IS margInally lower than the present costs of MC operatIons I estImated to be Rs 534 The cost dIfferential wIll be further Increased If pnvatlzatlon IS not pursued because addItional mvestment WIll be needed by the KMe for vehIcles and new eqUIp ment Under pnvatIzatIon, the cost of these WIll be borne by the contractor and not the mum I cipallty It IS expected that the greater operatmg effICIenCIes of the pnvate operator wIll lead to an Improved servIce, thus further mcreasmg the cost savmgs 5 ThIs has been reduced because the contractor t1kes over many of the functIOns such as vehtcle mamtenance and work shop operatIons undertaken by the KMC I I I EXHIBIT 54 NUAL O&M AND OVERHEAD COSTS OF CONTRACTOR (1998 PRICES) RsOOO Operating Costs I Gangs No of Rate per RsOOO Persons Year (Rs) Sweeprng Labor 4 12 50000 600 Labor 3 6 50000 300 I Trucks Drivers 2 3 65000 195 Labor 2 8 50000 400 Supervisors 2 85000 170 I Sub-Total 31 1,665 EPF/ETF contribution @15'7'0 250 Total Operatrng Labor 1915 Workshop expenses I Mechamcs 1 65000 65 Helpers 1 40000 40 I Sub-Total 2 105 EPF/ETF contribution @15'7'0 16 Total Workshop Labor 121 Rent of pr.emlses 240 I Workshop expenses 250 Vehicle maintenance 250 Diesel 520 DepreCiation 1889 I Sub Total - O&M Costs 5,184 Overhead Expenses I Book-Keeper 1 80000 80 Clerk 1 65000 65 Sub-Total 2 145 EPF/ETF contribution @15'7'0 22 I Total Office Salaries 167 Commumcatlon 120 Utilities 60 I Other expenses 240 Sub-Total- Office Expenses I 587 Total Base Costs - O&M and OffIce Expenses 5,771 I PhYSical contrngencles (10%) 577 Total Base Year - O&M and Office Expenses 6,348 Head office overheads (2 5% of annual expenses) 159 Sub Total O&M, other expenses and overheads 6,507 I Profit (10% mark-Up on expenses) 651 Total (1988 prIces) RsOOO 7,158 Waste collection per year MlTons 14600 I Contractor's Charge per MlTon of SW Collected RslTon 490 (Without Interest Charges) Interest on loan (loan of 70% of capital costs) 921 Total including Interest (1988 prIces) 8,079 Contractors Charge per MlTon of SW Collected 553 (With Interest Charges) I - 56- I 5 4 3 Revenue Forecasts and ProfitabilIty of the PrivatIzed OperatIon Revenue Forecasts I Revenue forecasts, or the assumed payments to the selected contractor, were computed m rela non to the amount of garbage to be collected and an Imputed tanff per metnc ton of Rs 490 m 1998 prIces Inflatmg the urnt rate to 1999 pnces gives a fIgure of Rs 527 per metnc ton I Revenues to the contractor were calculated by multlplymg the annual amount of garbage to be collected by the average urnt cost of collectIOn In lIne WIth the proposed InflatIOnary clause In the draft contract document, the Imputed charge per metrIC ton of garbage collected was assumed I to mcrease at a rate of 7 5 percent per annum,6 about 75 percent of the forecast domestIc InflatIOn rate I ExhIbIt 5 5 shows that the revenues or payments to the selected contractor In 1999 would be about Rs 3 8 mIllIon, assumIng that the contract commences on July 1 The table shows that thIs figure would Increase to Rs 10 8 mIllIon In 2003 and to Rs 11 7 mIllIon In 2004, the last I year of the contract The estImates Imply that In the year 2000, the fIrst full year of pnvatIzed operatIOns, about 21 percent of the general rates would need to be allocated to cover the pay ments to the contractor ThIS decreases to 15 percent In 2001 and 2002 and to 16 percent In I 2003 I ProfitabIlity On the assumptIon that the KMC pays the selected contractor an agreed sum on a monthly baSIS and that the MC WIll be responsIble for the collectIon of the general rates from reSIdents and I bUSIness, revenues and expendItures relatIng to the contractor's operatIOn can be estImated and compared ThIS determmes the profItabIlIty of the operatIon to the contractor and IS shown as I ExhIbIt 5 5 Base year expendIture estImates, as presented In ExhIbIt 5 4, have been used In the analysIs Total O&M and office expenses, mcludmg head office overheads, were estlffiated to be I Rs 65 millIon per annum In 1998 pnces Assummg that all costs, except depreCiatIOn, mcrease In lIne With domestIc InflatIon, currently forecast to be 10 percent per annum, annual expendI I tures m current pnces are shown m the table The net profit to the contractor IS estImated to average about 10 percent per annum It starts at I Rs 0 4 mIllIon m 1999 and mcreases to Rs 1 2 mIllIon m 2003 5 4 4 FmancIaI Inputs for Tender Documents The two categones of fmancIalmputs for the tender documents are (1) pre-qualIfIcations and I (2) performance assurances I I 6 EstImates show that the depreCIatIOn of fixed assets account for about 24 percent of the contractor s total expenses SInce depreCIatIOn IS a constant figure, a 75 percent annual Increase In revenues would be adequate to sustaIn I profitabIlIty I I I EXHIBIT55 PROFITABLITY FORECAST OF CONTRACTOR (AT CURRENT PRICES) 2004 1999 I Units SIX Months 2000 2001 2002 2003 (6 Months) QuantIty of waste collection Mrron 7300 14775 14952 15131 15313 7748 Imputed charge per mlton of SW collected Rslton 527 567 609 655 704 757 I I Revenue from MC Rs 000 3847 8371 9107 9907 10778 5863 Deduct Expenses Operating labor Rs 000 1053 2317 2549 2803 3084 1696 I Workshop labor RsOOO 66 146 161 177 194 107 Rent of premises RsOOO 132 290 319 351 387 213 Workshop expenses RsOOO 138 303 333 366 403 221 I Depreclatron Rs 000 944 1889 2005 2005 2092 1046 Vehicle maintenance RsOOO 138 303 333 366 403 221 Diesel RsOOO 286 629 692 761 837 461 I Overhead Expenses I Office salaries RsOOO 92 202 222 244 269 148 CommunicatIons RsOOO 66 145 160 176 193 I 106 Utilities &pUblic awareness Rs 000 40 87 96 105 116 64 I Other expenses Rs 000 132 290 319 351 387 213 Head office overheads RsOOO 87 211 232 256 281 155 I Contingencies Rs 000 317 698 768 845 929 511 Total expenses Rs 000 3,491 7,511 8,189 8,807 9,574 5,161 Net Profit RsOOO 356 860 918 1100 1204 701 I Net profit as a % of revenue % 9 10 10 11 11 12 I Notes 1 Waste collection IS assumed to Increase by the population growth rate of 1 2% per annum 2 The Imputed charge per mlton IS assumed to Increase by 7 5% per annum 3 Expenses are assumed to Increase by the local Inflation factor (10%) I 4 Operating profit does not Include any finance charges Incurred I I I I I I I - 58- I Pre-QualIficatIOns Stage ThIs mfonnatlon IS requested to show that prospective contractors have the necessary fmancIal! I busmess resources and expenence to perfonn the work m a proper and satIsfactory manner ProspectIve contractors are to supply the followmg as part of the Pre-QualIfIcatIons Request (see C;;:Pf't1t"'ln 7 1 ")\ - .... _ ...."'...loJ.I.... I .I. ""J I • fmancIaI statements (balance sheet, mcome statement, cash flow statement) audIted by an mdependent certIfied publIc account (a certIfIcatIOn on any change m fmancIaI pOSItIOn smce last audIted statement must be mcluded), I • statement on avaIlabIlIty or access to workmg capItal to perfonn contract servIces, • estImate of capItal requIred for start-up and the prospectIve contractor's explanatIOn of how I these costs WIll be met, • If prospective contractor IS a jomt venture or partnershIp, or other entity fonned wlthm last 12 months, then fmancIaI records for each party to the entity are to be submItted, I • IdentIfy the fInancIal mstItutiOns to be used m project ImplementatIOn and obtam, If pOSSIble letter of commItment, I • prOVIde eVIdence of COmmItments receIved for bId bond and perfonnance bonds on preVIOUS projects, and • mformatIOn that the prospectIve contractor and each assocIated fInn was not mvolved m I bankruptcy actIons or fallure to perfonn on contracts dunng the past fIve years, an explana tIon should be provIded If such problems have ansen I Performance Assurances The performance assurances that wIll be reqUired are (1) bId bond, and (2) perfonnance bond I The bId bond, or certIfIed bank check made payable to the KMC, should be m the amount of 2 percent of the fIrst year annual value of the proposed pnce The bond IS to remam m effect for 120 days after responses to the Request for Tenders (RFT) are due The bond, or check, I would be returned to contractors after a contract IS SIgned I The selected contractor IS to delIver to the KMC a perfonnance bond at least 60 days pnor to the start-up of the contract The bond IS to be for the annual value (first year) of the contract WIth provIsIons for annual renewal throughout the fIve-year tenn of the contract The renewed I bond IS to be receIved by the KMC at least 30 days pnor to the end of the bond m effect at that time The value of the renewed bond IS to be based on the adjusted contract value of the next I annual penod 6 PIlot Project JustificatIon I 6 1 EnVironment and SOCIal It IS proposed that a pnvate company wll1 be contracted to collect dIscarded waste and to sweep the streets m Zone 1 and transport these wastes to the KMC's dIsposal SIte ThIs work wIll I mvolve collectIOn/sweepmg of the eXlstmg waste III a more samtary manner The contractor, I I I - 59- I who wIll be held to a strIct performance standard, IS also expected to reduce the portIOn of the waste that currently IS uncollected I The contractor IS to collect waste m compactor trucks, whIch wIll elImmate the use of collectIOn I POInts A more samtary waste management operatIOn WIth a pnvate contractor wIll produce real publIc health benefIts Under the proVISIOns of the contract, the storage of loose waste m collectIon I pOInts and pIles of lItter wIll be elmllnated Improper waste management presents a publIc health rIsk 7 Loose waste serves as a food supply I for rodents, whIch, In turn, encourages a hIgher rodent populatIOn A major socIal aspect of prIVatizatIOn IS mcreased cleanlmess A cleaner town WIll present a I better Image to VISItors, both for !lhoppers m the commercIal area and tOUrIsts TOUrIsm IS an Important part of the local economy, and Improvmg the enVIronment wIll make Kandy a more I attractIve tOUrIst destmatIOn 62 Fmanclal Justification The pIlot project has been evaluated m terms of Its fmancIaI mternal rate of return (FIRR) and I Its fmancIaI net present value (FNPV) CapItal mvestment and O&M costs are recovered by the contractor through dIrect payments receIved from the mumcIpalIty The mumcIpalIty m tum I recovers these costs through general rates from the publIc and busmesses The fmancIaI analYSIS has been carrIed out over the hfe of the contract, WhICh IS assumed to be fIve years startmg on July 1, 1999 and endmg on June 30, 2004 Accordmgly, revenue and I expendIture estImates were mput for only SIX months m 1999 and 2004 ExhIbIt 6 1 presents the fmancIaI analYSIS of the proposed prIVatIZatIOn of solId waste collectIon I m Kandy's town center I 6 2 1 Cost Estunates CapItal costs are Input at constant 1998 prIces A physIcal contmgency of 10 percent has been added Taxes and dutIes are mcluded m the cost estunates The medIUm and large storage bIns I have a hfe of only two years, and they WIll need to be replaced accordIngly AddItIOnal costs for these have been assumed m years 2001 and 2003 Most other assets acqUIred for the contract will have a useful lIfe beyond the contract perIod The reSIdual value of these has been mcluded I as a negatIve capItal cost m the year 2004 O&M costs have been mcluded m constant 1998 pnces These are based on the fIgures contamed I m ExhIbIt 54 I 7 As an example m the early 1990s IndIa suffered an outbreak of bubOnIC plague spread by fleas hvmg on rodents I (rats) I I I I I EXHIBIT 61 I FINANCIAL ANALYSIS OF IMPROVEMENTS TO SOLID WASTE MANAGEMENT I KANDY TOWN CENTER 1998 CONSTANT PRICES (Rs 'Millions) I Year Capital O&M+ Total Revenue Net I Cost Overheads Cost Revenue 1999 1096 231 1327 371 -96 I 2000 462 462 733 27 2001 145 462 607 759 1 5 2002 462 462 796 33 I 2003 145 462 607 845 24 2004 -4 11 231 -1 80 454 63 I NPV@ 12% 94 158 253 267 1 4 I Financial Internal Rate of Return I Base case 174% SensitiVity Tests I 10% Increase In Investment costs 135% 10% ReductIon In benefits 71% Benefits delayed by 1 year 89% I 10% Increase In Investment costs and 10% reduction In revenues 42% 10% Increase In Ibvestment costs and revenues delayed by 1 year 72% I 10% ReductIon In benefits and revenues delayed by 1 year 38% I I I I I - 61 - 6 2 2 Revenue Forecasts Payments from the mumcIpalIty to the contractor were taken as revenue, and these were based I on those presented In ExhIbIt 5 5 but converted to 1998 pnces 6 2 3 Fmanclal Returns I The capItal cost and the O&M cost streams were subtracted from the revenue stream to establIsh net revenues for each year I A base case FIRR of 17 4 percent was computed ThIS IS satIsfactory and IS above the fInanCIal opportumty cost of capItal assumed to be 12 percent, IndIcatIng that the project IS sUItable for pnvatIzatIon The proJect, however, IS sensItIve to changes In costs and revenues Where costs I Increase by 10 percent, the FIRR of 13 5 percent stIll exceeds the fInanCIal opportumty cost of capItal The project IS profitable When dISCOuntIng the net revenues at the fInanCIal opportumty I cost of capItal, a FNPV of Rs 1 4 mIllIon IS computed 7 Detailed Tender Documents, BaSIS of Award, and Contract I 7 1 Tender Documents The proposed tendenng process IS dIVIded Into two stages In the fIrst stage, prospectIve con tractors WIll be reqUIred to submIt theIr qualIficatIons (expenence, techmcal, fInanCIal) Those I fIrms deemed to be qualIfied WIll be short-lIsted to submIt a response to a RFT I ThIs process begIns WIth the release of a tender notIce, whIch IS Intended to Inform prospectIve contractors that, In thIs case, the KMC IS seekIng a company to prOVIde serVIces In waste collec tIon, street sweepIng, and transport to dIsposal SIte, and that the servIce area WIll be the town I center The notIce also will state that the fIrst stage In thIs process IS a Pre-QualIfIcatIon Request (PQR) I 7 1 1 Tender NotIce The tender notIce IS Intended to Inform prospectIve contractors of the type of serVIce beIng sought, In thIs case, street sweepIng and waste collectIon, when and where tender documents are I avaIlable, and the date/tIme when responses are due A draft tender notIce speCIfIC to thIS project IS gIven In AppendIX B I The key functIOn of the notIce IS to publICIZe the tendermg process to ensure that the largest number of prospectIve contractors responds Tlns publICIty effort should begm as soon as pOSSIble after a deCISion IS reached to pursue a pnvatIZed waste management program The KMC I should begm dIstnbutIOn of the tender notice at least two weeks before the release of the Pre QualIficatIons Request I At a mlmmum, the KMC needs to advertIse In local and Colombo newspapers The notIce should also be publIshed In the Government Gazette at least once I The tender notIce should also be sent to prospectIve contractors Such compames Include those I fIrmS that expressed Interest In the proVISIon of a slffillar servIce m Colombo, plus any local I I - 62 - I firms IdentIfied by the Kandy Chamber of Commerce and Industry The hst also should mclude companIes that express mterest to the KMC m provldmg prIvatized waste management services I The Commercial SectIOns of all foreign government miSSIOns m SrI Lanka should be sent the tender notice Interested prospective contractors mother countnes may form aSSOCiatIOns With Sri Lankan companIes, which could proVide local compames With needed techmcal expertise m I waste management I 7 1 2 Pre-QualificatIOn Request The PQR Will be used to assess the expenence and capablhty of prospective contractors to undertake thiS assignment for Kandy ThiS first step m the tendenng process IS done to ensure I that the RFT IS only given to those compames that have adequate experIence, capablhtIes, and resources to successfully carry out the contract The PQR also presents the scope of work on which short-hsted contractors Will be submlttmg a tender The scope of work IS given at thiS I stage to assist prospective contractors m evaluatmg their capablhty to successfully perform the assignment I The cnterIa to be assessed m the PQR are • expenence and past performance on SImIlar contracts, If • capablhtles With regard to personnel and eqUIpment, and • finanCial capabilIty I A draft PQR for the pnvatlZatlOn project IS given as AppendIX C 7 1 3 Request for Tenders I The recommended approach for thIs stage of procurement IS to request proposals and to negotiate -an agreement With ffie most responsive contractor A "bid approach," m which the service to be proVided IS well defined, may be SUItable m the future, but the uncertamty With regard to the I service level makes a bid less SUItable than a "proposal approach" at thIs tIme The RFT given to a short-hst of pre-quahfled contractors Will request that these compames I submit detaIled Information on the proposed approach to perform the contract service I SpeCifiC mformatlOn to be requested IS • an operational plan to undertake waste collectIOn and street sweepmg - thIS would mc1ude waste collectIon routes, productIVIty standard (number ot premIses to be collected per day), I frequency of waste collection and street sweepmg, and a dally work schedule, • a lIst of the equIpment to be used (make, model, and capaCIty) and a procurement schedule from placement of the order to delIvery m Kandy, I • a staffmg plan, mdudmg labor categones, number of work crews, shIfts per day, hours and days to be worked per week (selected contractor to give current SWMD staff m Zone 1 I SUItable employment consideratIOn), I I I I - 63- • locatIOn of the eqUIpment yard, Its current ownershIp, and schedule for access to sIte unless already owned or leased (If leased, prospectIve contractors wIll be requested to specIfy the I lease term), • a mamtenance program, mcludmg a schedule for preventIve mamtenance and major repaIrs, and lIst of tools and spare parts to be supplIed, and I • the approach to customer relatIOns to be adopted ProspectIve contractors also are to propose the annual payment they are seekmg dunng the fIrst I year of the contract RemuneratIon WIll be made m 12 equal monthly payments The proposed I means of adJustmg the pnce on an annual baSIS are to be defmed m the response to the RFT A draft RFT IS gIven as AppendIX D I 7 2 BasiS of Award 7 2 1 Techmcal EvaluatIOn Committee The revIew and evaluatIon of the submIssIOns m response to the PQR and the RFT WIll be the I responsIbIlIty of a TechnIcal EvaluatIOn CommIttee (TEC) to be establIshed by the KMC The TEC should be composed of representatIves of the KMC ProspectIve members of the TEC I could mclude representatIves of • the Mumclpal CounCIl, • the OffIce of Mumclpal CommIssIoner, I • the Works Department, • the Secretary's Department, and I • the Accounts Department Pre-QualIficatIOn SubnnsslOn EvaluatIOn I For the PQR, the TEC WIll need to evaluate the followmg • Expenence Relevance and qualIty of the performance of prospectIve bIdders on current and past contracts At a mInlffium, a prospectIve bIdder should have a cumulatIve total of three I to five years of relevant expenence (jamtonal servIce, transportatIOn, matenals handlIng) that has been successfully performed Successful performance should be measured accordmg to I the recommendatIons of clIents, a lack of legal actIons, and no finanCIal problems • Technical EqUIpment - appropnate number, type, delIvery schedule, and mamtenance plans, staffmg - adequate staffmg to perform the servIces to be prOVIded I • Fmancml CapabilIty Profitable company WIth a stable or lITlprovmg fmancIaI condItIOn Adequate workIng capItal to fmance the contract A SUItable plan to acqUIre the needed capItal resources for the contract Performance on past contracts, based on records WIth I surety company(les) that have supplIed bId bonds and/or performance bonds I The qualIfied compames WIll be placed on a short-lIst to receIve the RFT I I I I - 64- Request for Tenders SubDllsslOn EvaluatIOn _The TE£_wIll need to evaluate the followmg Items m the submISSIOn m response to the RFT I • Bonds BId bond m the amount specIfIed FaIlure to provIde such a bond, or alternate secunty, such as certIfied bank check made payable to the KMC, m the specIfied amount, should be basIs for ImmedIate rejectIon of a bIdder's SUbmISSIOn The submIsSIOn also should I have a Consent of Surety that states that contractor IS approved for a performance bond m the specIfIed amount, If selected for the contract The surety should be WIth a reputable bondmg company I • Proposed Work Approach The planned approach by each bIdder should be evaluated to assess ItS VIabIlIty m meetmg performance standards Tills would be based on the TEC's I knowledge of Zone 1 The TEC should also conSIder the VIabIlIty of the work approach In relatIon to L'Ie proposed arill.ual cost • Cost Proposal Evaluate the fIrst-year cost of each submISSIon, proposed baSIS of annual I escalatIon, and proposed cost components to be claSSIfIed as pass-through costs These costs should be assessed USIng a fInancIal pro-forma model to evaluate total project cost over the five-year contract term Because of the uncertaInty of future costs and the unknown Impact I of pass-through costs on the servIce fee, the model can be used to evaluate vanous pOSSIble future scenarIOS that could affect the contract costs dunng the contract term The cost also should be evaluated on the baSIS of alternate levels of servIce proposed by the bIdders As I an example, one bIdder may offer a more comprehensIve level of servIce than another, but for only a margInal mcrease In cost ThIS dIfference In servIce level should be taken Into I account In the KMC evaluatIon 7 2 2 Contractor Selection The TEC should rank the contractors after ItS evaluatIOn based on a POInts-scorIng system for I the project approach and proposed costs The recommended dIstnbutIOn of pomts IS • Project Approach - 40 pomts I • Proposed Costs - 60 POInts FaIlure to comply WIth the bId bond, or SUItable alternatIve, should be the baSIS for automatIc I rejectIOn I 7 2 3 NegotIatIOns The preferred contractor should be mVIted to meet WIth the TEC to negotIate any Issues that the TEC wants to address Such Issues could Include proposed servIce level, costs, IncludIng first annual charge, proposed annual adjustment method, and any cost components claSSIfied as pass I through costs, and exceptIons raIsed by the preferred contractor over the contract I In the event that more than one bIdder scores a SImIlar number of pOInts In the evaluatIOn, the TEC could enter Into slffiultaneous negotIatIons Tills approach WIll expedIte the negotIatIOns process rather than haVIng dISCUSSIons WIth each contractor untIl agreement IS reached Also, I sImultaneous negotIatIOns offer the potentIal for the KMC to have the bIdders compete further on pnce and servIce level I I I - 65- I 73 Contract A draft contract between the KMC and the selected contractor to provIde waste management I serVIces In the town center IS gIven as AppendIx E The contract would be part of the RFT package I 8 Contract Performance/Enforcement and EducatIon Program 8 1 Contract Performance/Enforcement I To ensure performance by the selected contractor, two proVISIOns are Included In the draft , contract (1) performance bond and (2) lIqUIdated damages 8 1 1 Performance Bond The performance bond, WhICh should be provIded by a reputable surety company, WIll gIve a fmancIal guarantee that the work wIll be performed should the selected contractor fall to fulfIll I ItS oblIgations The bond wIll be In effect for the five-year term, but be annually renewable The bond wIll have I a value of the full amount of the servIce to be provIded In each contract year I The KMC needs to be sure that the surety company to be used IS reputable and has performed on prevIOus contracts when the need has arIsen OtherwIse, the performance bond wIll only provIde a false sense of secunty I 8 1 2 LIqUIdated Damages The contract provIdes (ArtIcle 16) for the selected contractor to be penalIzed for faIlure to I adequately perform the serVIces to be provIded The baSIS for applyIng lIqUIdated damages IS the follOWIng I • Waste CollectIon The value of this portIon of the contract was set at 60 percent of the total I The damages that would apply are expressed In the follOWIng formula 60 percent of annual payment] 365 days d ( xcx I number of premIses m Zone 1 I where c = number of complamts on waste collectIOn that are not resolved Wlthm four hours of receIpt I d = damages factor, based on source of complamts (1 e , 3 for small premIses and 5 for large preffilses, where large preffilses are those waste generators that currently I receIve dIrect collection by the SWMD's compactor truck) I I I - 66- I ThIs portIOn of lIqUIdated damages should be waIved for the fIrst month of the contract to I allow the contractor to address start-up Issues • Street Sweepmg The value of thIs portIon of the contract was set at 30 percent of the total I The damages that would apply are expressed m the followmg formula 30 percent of annual payment ] 365 days I d ( I number of lItter measurement areas to be selected by the KMe x x I where I = number of lItter Items counted m measurement area over baselIne level to be establIshed prIor to date of commencement of operatIOns I d = damages factor 3 The KMC wIll need to IdentIfy lItter measurement SItes (e g , 20) throughout Zone 1 The I boundarIes of each SIte should be easIly IdentIfIable from permanent landmarks and about 3 meters m length and WIdth A faIr and representatIve lItter factor should be establIshed for I each SIte based on lItter counts (e g , SIX per SIte) pnor to the date of commencement of operatIOns The average lItter count per SIte WIll be used as the SIte lItter factor to measure the contractor's performance When evaluatmg the contractor's performance, several (e g , fIve) measurement SItes should be randomly selected and the pIeces of lItter withm the SIte I counted The pIeces of lItter above the lItter factor would be used to assess lIqUIdated damages Photographs should be taken of the SItes bemg evaluated to provIde documented I eVIdence on the amount of lItter bemg used to assess lIqUIdated damages The evaluation SItes should be regularly SWItched so the contractor wIll be unaware of the locatIons on whIch to I concentrate ItS htter removal actiVIties ThIs portIon of hqUIdated damages should be waIved for the fIrst two weeks of the contract I to allow the contractor to address start-up Issues • Waste Transport The value of thIs portIon of the contract was set at 10 percent The I damages that would apply are expressed m the followmg formula 10 percent of annual payment ] I 365 days x I X d [ number of vehIcles used to transport waste to the dIsposal SIte I where I = number of documented mCIdents of waste spilt or blown from the transport vehIcle I d damages factor 3 I I I - 67- I There should be no waIver of lIqUIdated damages on thIs portIon of the contract I 8 2- EducatIOn Program A comprehensIve program to educate waste generators on the envIronmental, publIc health, SOCIal, and economIC benefIts of proper waste storage and handlmg should be undertaken The I KMC IS best SUIted to orgamze thIs task The actual program could be contracted to another orgamzatlon, such as an NGO The program should also address behaVIOr modIfIcatIOn WIth I regard to lIttermg I I I I I I I I I I I I I References I Census Bureau "Total PopulatIOn by DS DIvIsIon for the Kandy DIstrIct 1998," Central ProvmcIaI Government, Kandy, 1998 I "GUldelmes on Government Tender Procedure," General Treasury, Colombo, August 1997 Kandy Mumclpal Councll, "QuestIOnnaIre for the Project FormatIOn Study on the EnvIronment I m the Local Areas m the DemocratIc SOCIalISt RepublIc of SrI Lanka - Murnclpal SolId Waste Management," Japan InternatIOnal CooperatIOn Agency, March 1997 I "Feaslblllty Study Report on SolId Waste Treatment and Recycle Energy UtIlIzatIOn Scheme m Colombo MetropolItan Area m the DemocratIc SocIalIst RepublIc of SrI Lanka," Japan I Consultmg InstItute, March 1996 "FeasIbIlIty Study to DeSIgn, Construct, and Operate a Compostmg FacIlIty for the CIty of I Kandy, Sn Lanka," GPEC InternatIOnal Ltd , Ottawa, Ontano (Canada), July 1996 "InvItatIOn to Tender - SolId Waste Management ServIces m Murnclpal Ward of Fort," I Colombo Murnclpal CouncIl, Murnclpal Engmeer's Department, Colombo, 1998 Nanayakkara, PC, "SolId Waste Management Dehlwala-Mount Lav1ll1a Murncipal CouncIl," I Urban Development CouncIl, Colombo, November 1996 Nanayakkara, PC, "SolId Waste Management Sn Jayawardenepure Kottle -UC and Battaramulla Sub Urnt of Kaduwela Praadesmya Sabha," Urban Development CouncIl, Colombo, I November 1996 "Report on Waste GeneratIOn and CompOSItion Study - Kandy Murnclpal CouncIl Area," I EnVIronmental Infrastructure Urnt, M1ll1stry of PolIcy Planrnng and ImplementatIOn, Colombo, July 1994 I Savas, ES et al , "The OrgamzatIOn and EffICIency of SolId Waste CollectIOn," Lexmgton Books, Lexmgton, MA (USA), 1977 I Van Holm, L, "Pre-proposal for the Kandy Murnclpal CouncIl Compostmg of MUIDclpal I Orgamc Waste," BIO-Engmeermg ServIce TechnologIes Ltd, Kandy, December 6, 1997 I I I I I I AppendIx A Calculated Quantity of Waste Delivered to Disposal Site I January-AprIl 1998 I I I I I I I I I I I I I I I I ~_-_~_-_~_~--_~---- Exhibit A 1 ESTIMATED WASTEQUANTITY DELIVERED TO DISPOSAL SITE (JANUARY 199B) Zone 1 Market Area Zones 2-6 TOTAL MQntb. On ~ Loads MTons Loads M~o"-s Loads M Tons Loads M Tons January Thursday 1 9 280 2 54 7 201 18 535 Fnday 2 13 406 3 85 17 478 33 969 Saturday 3 11 343 4 107 15 422 30 872 Sunday 4 10 272 2 54 15 418 27 744 Monday 5 13 406 4 107 17 478 34 991 Tuesday 6 12 375 3 85 18 508 33 967 Wednesday 7 13 406 4 107 15 423 32 936 Thursday 8 11 343 2 54 18 507 31 904 Fnday 9 12 375 5 11 6 16 450 33 940 Saturday 10 9 280 2 54 14 391 25 725 Sunday 11 10 272 2 54 16 447 28 773 Monday 12 10 312 3 85 14 394 27 790 Tuesday 13 0 00 0 00 0 00 0 00 Wednesday 14 9 280 3 85 8 224 20 589 Thursday 15 11 343 1 31 13 363 25 737 Fnday 16 12 375 2 54 17 478 31 906 Saturday 17 10 312 3 85 13 364 26 760 Sunday 18 10 272 4 107 11 309 25 688 Monday 19 12 375 2 54 18 508 32 936 Tuesday 20 13 406 4 107 16 447 33 960 Wednesday 21 13 406 3 85 17 476 33 966 Thursday 22 13 406 2 54 16 447 31 907 Fnday 23 12 375 3 85 17 477 32 936 Saturday 24 9 280 2 54 11 308 22 643 Sunday 25 10 272 1 31 16 448 27 751 ~ -----~--~--~-~----- Monday 26 12 375 1 31 16 450 29 855 Tuesday 27 11 343 3 85 16 447 30 875 Wednesday 28 10 312 3 85 15 418 28 815 Thursday 29 11 343 2 54 18 508 31 905 Fnday 30 12 375 3 85 17 478 32 938 Saturday 31 fl 2.4..a Z 54 ~ 448 23 1M TOTAL 331 1,0166 80 2180 450 1,271 6 861 2,5062 Average 107 327 26 70 147 415 279 812 1 Density (Tractor [frailer, Non-Operative Packer on Compactor Truck) o55 Metric tons per CubiC Meter 2 Density (Compactor Truck) 114 Metric tons per CubiC Meter 3 Density of Market Area Waste o63 Metric tons per CubiC Meter 4 Zone 1 Equipment Capacity Compactor (2) 3 50 CubiC Meters Tractors (2) 6 34 CubiC Meters 5 Market Area Equipment Capacity Tractor 3 98 CubiC Meters Tractor 5 47 CubiC Meters 6 Zone 2 Equipment Capacity Tractor 547 CubiC Meters Tractor 5 81 CubiC Meters 7 Zone 3 EqUipment Capacity Tractor 581 CubiC Meters 8 Zone 4 EqUipment Capacity Tractor 4 53 CubiC Meters Tractor 6 30 CubiC Meters 9 Zone 5 EqUipment Capacity Tractor 5 92 CubiC Meters 10 Zone 6 Equipment Capacity Tractor 5 47 CubiC Meters 11 Percent Tractor I Trailer Capacity Filled 9000% ~ -- --~------~~~----- Exhibit A 2 ESTIMATED WASTE QUANTITY DELIVERED TO DISPOSAL SITE (FEBRUARY 1998) Zone 1 Market Area Zones 2-6 TOTAL Month OU .Dslm Loads M-----"£ons Loads M Tons Loads M ..T_ons Loads M Tons February Sunday 1 11 343 3 85 13 367 27 794 Monday 2 11 343 2 54 14 396 27 793 Tuesday 3 13 406 1 31 17 478 31 91 5 Wednesday 4 11 343 0 00 13 365 24 708 Thursday 5 11 343 3 85 14 391 28 81 9 Fnday 6 12 375 3 85 15 41 8 30 878 Saturday 7 10 312 3 85 12 340 25 736 Sunday 8 12 375 4 107 13 363 29 844 Monday 9 11 343 2 54 16 447 29 844 Tuesday 10 11 343 2 54 13 365 26 762 Wednesday 11 12 375 2 54 17 477 31 905 Thursday 12 15 469 3 85 17 472 35 1025 Fnday 13 14 437 3 85 15 41 8 32 941 Saturday 14 10 31 2 2 54 13 367 25 732 Sunday 15 9 281 3 85 13 364 25 729 Monday 16 13 406 2 54 14 390 29 849 Tuesday 17 13 406 4 107 16 450 33 963 Wednesday 18 14 437 3 85 15 41 8 32 941 Thursday 19 13 406 3 85 15 41 8 31 909 Friday 20 14 437 3 85 15 41 8 32 941 Saturday 21 9 281 3 85 14 390 26 755 Sunday 22 12 375 3 85 13 363 28 822 Monday 23 13 406 4 107 14 389 31 902 ~ 728 824 932 909 844 Til 2,2041 25 28 32 31 Meter Meter .2.5 Meter 288 7530 Cubic Cubic Cubic per per per ---- 8 tons tons tons Meters Meters Meters Meters Meters Meters Meters Meters 363 Meters Meters 41 418 Meters 418 .3Q.2 402 1,0482 Metric Metrrc Metnc Cubic Cubic Cubic Cubic Cubic Cubic Cubic Cubic Cubic Cubic Cubic 13 15 15 15 13 14 63 34 98 47 47 81 55 50 92 47 53 30 1 o 6 3 5 144 5 581 5 o 5 3 5 4 6 3750 9000% 2 54 31 85 M 73 107 191 ...... 1 2 4 3 ~ 74 26 Truck) 2 31 375 406 406 281 369 Compactor 1,0334 on .e 8 10 12 13 13 331 11 24 25 26 27 28 Filled Non-Operative Packer Capacity Capacity Waste (2) Truck) (2) Capacity Capacity Capacity Capacity Capacity Capacity Area /Trailer, Trailer I EqUipment Tuesday Wednesday Thursday Friday Saturday Compactor Market Tractors Tractor Tractor Tractor Tractor Tractor Tractor Tractor Tractor Tractor (Tractor (Compactor ------_ of EqUipment Tractor Equipment Area Equipment Equipment Equipment Equipment 1 2 3 4 5 6 TOTAL Average Density Density Density Zone Market Zone Zone Zone Zone Percent Zone 1 2 3 4 5 6 7 8 9 10 11 ~ ...1 I ...... -- - - ~ - -- .. - - - - Exhibit A 3 ESTIMATED WASTE QUANTITY DELIVERED TO DISPOSAL SITE (MARCH 1998) Zone 1 Market Area Zones 2-6 TOTAL MQn.tb Day Qam Loads M Lons Loads M Tons Loads M_Tons Loads M Tons March Sunday 1 13 406 3 85 15 418 31 909 Monday 2 13 406 3 85 16 450 32 940 Tuesday 3 13 406 2 54 15 420 30 880 Wednesday 4 13 406 3 85 15 418 31 909 Thursday 5 13 406 4 107 17 476 34 989 Friday 6 0 00 0 00 0 00 0 00 Saturday 7 10 312 3 85 13 362 26 759 Sunday 8 12 375 4 107 15 423 31 904 Monday 9 13 406 3 85 13 367 29 857 Tuesday 10 13 406 3 85 17 477 33 967 Wednesd!ay 11 13 406 2 54 16 446 31 905 Thursday 12 13 406 2 54 17 475 32 934 Friday 13 11 343 3 85 15 419 29 847 Saturday 14 9 281 3 85 12 340 24 705 Sunday 15 12 375 3 85 14 391 29 851 Monday 16 13 406 3 85 16 450 32 940 Tuesday 17 12 375 4 107 16 448 32 930 Wednesday 18 13 406 3 85 15 418 31 909 Thursday 19 13 406 4 107 15 418 32 932 Friday 20 13 406 4 107 15 418 32 932 Saturday 21 10 312 2 54 12 340 24 705 Sunday 22 13 406 4 107 16 448 33 961 Monday 23 13 406 2 54 15 418 30 878 Tuesday 24 13 406 4 107 15 418 32 932 Wednesday 25 13 406 2 54 15 418 30 878 ~~ ------~---~------ Thursday 26 13 406 4 107 17 478 34 992 Fnday 27 13 406 4 107 16 448 33 961 Saturday 28 10 312 3 85 11 31 1 24 707 Sunday 29 13 406 2 54 12 334 27 794 Monday 30 13 406 4 107 15 41 8 32 932 Tuesday 31 13 406 .Q ~ 15 418 ~ ~ TOTAL 372 1,1617 95 2600 446 1,2485 913 2,6702 Average 120 375 3 1 84 144 403 295 861 1 Density (Tractor /Trailer, Non-Operative Packer on Compactor Truck) o55 Metric tons per Cubic Meter 2 Density (Compactor Truck) 1 14 Metnc tons per Cubic Meter 3 Density of Market Area Waste o63 Metric tons per Cubic Meter 4 Zone 1 Equipment Capacity Compactor (2) 3 50 Cubic Meters Tractors (2) 6 34 Cubic Meters 5 Market Area Equipment Capacity Tractor 3 98 Cubic Meters Tractor 547 Cubic Meters 6 Zone 2 Equipment Capacity Tractor 547 Cubic Meters Tractor 5 81 Cubic Meters 7 Zone 3 Equipment Capacity Tractor 581 Cubic Meters 8 Zone 4 Equipment Capacity Tractor 4 53 Cubic Meters Tractor 6 30 Cubic Meters 9 Zone 5 Equipment Capacity Tractor 5 92 Cubic Meters 10 Zone 6 Equipment Capacity Tractor 5 47 Cubic Meters 11 Percent Tractor I Trailer Capacity Filled 9000% ~\/', ------ Sunday 26 11 343 2 54 15 418 28 81 5 Monday 27 5 155 3 85 10 280 18 521 0 Tuesday 28 12 375 2 54 15 41 8 29 847 Wednesday 29 13 406 7 192 13 365 33 963 Thursday 30 j~ 406 4 107 12 336 ~ M~ TOTAL 343 1,0706 109 2992 404 1,1317 856 2,501 6 Average 11 4 357 36 100 135 377 285 834 1 Density (Tractorrrraller, Non-Operative Packer on Compactor Truck) o55 Metrrc tons per Cubic Meter 2 Density (CompactorTruck) 1 14 Metrrc tons per Cubic Meter 3 Density of MarketArea Waste o63 Metrrc tons per Cubic Meter 4 Zone 1 EqUipmentCapacity Compactor (2) 3 50 Cubic Meters Tractors (2) 6 34 Cubic Meters 5 Market Area Equipment Capacity Tractor 3 98 Cubic Meters Tractor 547 Cubic Meters 6 Zone 2 EquipmentCapacity Tractor 5 47 Cubic Meters Tractor 5 81 Cubic Meters 7 Zone 3 EqUipmentCapacity Tractor 581 Cubic Meters 8 Zone 4 EquipmentCapacity Tractor 4 53 Cubic Meters Tractor 6 30 Cubic Meters 9 Zone 5 EqUipmentCapacity Tractor 5 92 Cubic Meters 10 Zone 6 EquipmentCapacity Tractor 547 Cubic Meters 11 Percent Tractor / Trailer Capacity Filled 9000% ~ ~ ------ Exhibit A 4 ESTIMATED WASTE QUANTITY DELIVERED TO DISPOSAL SITE (APRIL 1998) Zone 1 Market Area Zones 2-6 TOTAL MQnth Day Q.ak Loads M Tons Loads M Tons Loads MTons Loads M_Tons April Wednesday 1 13 406 5 138 15 41 8 33 963 Thursday 2 12 375 4 107 15 41 8 31 900 Friday 3 13 406 5 138 15 41 8 33 963 Saturday 4 12 375 3 85 13 369 28 828 Sunday 5 9 281 3 85 4 11 1 16 476 Monday 6 15 469 4 107 16 450 35 1026 Tuesday 7 13 406 3 85 16 448 32 938 Wednesday 8 13 406 5 138 16 448 34 992 Thursday 9 14 437 5 138 15 41 8 34 994 Friday 10 13 406 5 138 17 481 35 1025 Saturday 11 11 343 2 54 14 391 27 788 Sunday 12 13 406 5 138 13 360 31 905 Monday 13 13 406 2 54 15 41 9 30 879 Tuesday 14 4 124 0 00 2 60 6 184 Wednesday 15 6 186 2 54 9 251 17 491 Thursday 16 8 249 5 138 8 221 21 608 Fnday 17 13 406 3 85 21 592 37 1082 Saturday 18 10 312 3 85 12 340 25 737 Sunday 19 10 31 2 3 85 11 309 24 706 Monday 20 13 406 4 107 16 450 33 963 Tuesday 21 13 406 3 85 17 479 33 970 Wednesday 22 13 406 4 107 16 448 33 961 Thursday 23 13 406 4 107 14 390 31 903 Friday 24 13 406 5 138 16 448 34 992 Saturday 25 9 281 4 107 13 362 26 750 ~ ...-~ I I Appendix B Draft: Tender Notice I 1 Kandy MumCIpal CouncIl (KMC) IS seek10g Pre-QualIficatIOn SUbmISSIOnS for "ServIces for Waste CollectIon, Street Sweep10g and Transport to DIsposal SIte" The servIce IS to be I provIded m the town center of the Town of Kandy SUbmISsIOns will be accepted untIl 4 00 P m on 45 DAYS AFTER RELEASE OF PRE-QUALIFICATIONS REQUEST The selected contractor wIll only be responsIble for solId waste, whIch excludes mdustnal tOXIC and hazardous I wastes, pathogemc / bIOlogIcal waste, radIoactIve waste, and related matenals as def10ed 10 the Contract I Pre-QualIficatIOn SUbmISSIOns are to follow the format presented m the Pre-QualIfIcatIOn Request (PQR), whIch IS avaIlable from the Kandy Town Hall for a nonrefundable fee of Rs from I DATE OF RELEASE OF PRE-OUALIFICATIONS REOUEST until 45 DAYS AFTER RELEASE OF PRE-QUALIFICATIONS REQUEST A mandatory Pre-QualIfIcatIOn SubmIsSIOn meet10g and SIte VISIt wIll be held 21 DAYS AFTER RELEASE OF PRE I QUALIFICATIONS REQUEST 2 The Pre-QualIficatIOn SubmISSIOns wIll be reVIewed by the TechnIcal EvaluatIOn CommIttee I (TEC) appomted by the KMC The TEC expects to complete Its reVIew WIthIn 30 days after the closure date for receIpt of pre-qualIfIcatIon submISSIOns The compames determmed to be qualIfIed wIll receIve the Request for Tenders (RFT) wIth10 seven days of be10g short lIsted I Responses to the RFT wIll be due 60 days after release 3 Sealed Pre-QualIfIcatIOn SubmISSIOns may be dIspatched eIther by regIstered post or hand I delIvered to the Kandy Town Hall for receIpt before the closmg tune speCIfIed above I 4 The Pre-QualIfICatIOn Request may be Inspected free of charge at the Kandy Town Hall 5 Request for Tender documents wIll only be released to compames determmed to be pre I qualIfIed 6 For further detaIls, please contact Eng GN Mediwake (Telephone 08-222275) I INDIVIDUAL RESPONSmLE FOR TENDERS - KANDY MUNICIPAL COUNCIL DATE I I I I I I I AppendIx---c Draft: Pre-Qualification Request I 1 InstructIOns to Respondents I The Pre-QuahIicatlOns Request (PQR) IS desIgned to enable the TechnIcal EvaluatIOn Comrmttee of the Kandy Mumclpal CouncIl to evaluate the qualIfIcatIOns of prospectIve contractors (PC), who are requITed to show that they are responsIble and capable of perfomllng the work, and that I they have the necessary fInanCial resources to undertake the work In a proper and satIsfactory manner Each PC must submIt the mformatton requested In Form A of tills package I Only those PCs claSSIfIed as beIng qualIfIed WIll receIve the Request for Tenders (RFT) PCs wIll be rejected from the qualIfIed ltst, If the Kandy Mumclpal CouncIl (KMC) determInes that I a PC lacks the qualIficatIOns to perform the street SweepIng and waste collectIOn servIces deSIred Also PCs that fall to prOVIde the InfOrmatIOn requested may be rejected I Responses to each question shall be typewntten on Form A or on A4 format paper and attached to Form A Attached responses shall be numbered In the same sequence as the tOPICS covered In Form A The submISSIOn In response to thIS PQR must be SIgned by an authonzed I representative of the PC The authorIZed representative that SIgns Form A warrants the truth and accuracy of all statements made by the PC m ItS submISSIon I By submlttmg a response, a PC warrants that the PC (1) has reVIewed all pertment tender documents and addenda, (2) has Inspected the area m whIch the work IS to be performed and the condItIons under the work WIll be performed, and (3) has not dIscovered any ambIgUItIes or I confltcts In the work descnptIon, speCIfIcations, or other terms or condItIOns of the tender documents I The KMC reserves the nght to request addItIOnal mformatton regardmg a PC's submISSIon to thIS PQR I 2 Statement of Work The KMC IS Issumg thIs PQR to SOhClt compames that are qualtfied to prOVIde waste collectIOn, I street sweepmg, and transport to dIsposal SIte servIces In the town center, excludmg the market area, of Kandy for a penod of five years These servIces currently are bemg proVIded by the Sohd Waste Management DIVISIon (SWMD) Wlthm the KMC The town center IS defmed as the I SWMD's Zone 1, see Attachment 1 The pre1TI1Ses servIced by SWMD routes In Zone 1 and a lIstIng of the larger waste generators I m the town center are gIven In Attachments 2 and 3, respectIvely The selected contractor WIll not be reqUIred to follow the same routes used by the SWMD A specIfic routIng plan, however, I must be submItted WIth the RFT I I I I C-2 The selected contractor IS to mamtam a hIgh level of cleanhness m the town center through waste collectIOn, street sweepmg, and transport of waste and htter to the KMC's dIsposal sIte I The specIfic Scope of Work for the waste management servIces to be provIded IS gIven below NOTE At thIS step of the tendenng process, the scope of work IS gIven for mformatlOnal I purposes only ProspectIve contractors should use thIS mformatlOn to assess theIr ablhty to successfully provIde the servIces mdlcated I Scope of Work I 1 OperatIons 1 1 General I 1 lIThe waste / htter collected shall be transported In a compactor truck to the Town's dIsposal sIte In Gohagoda, whIch IS eIght kIlometers from the town center I 1 1 2 There WIll be no dIsposal charge for waste dehvery, under the terms of the Contract 1 1 3 The Contractor shall only be responsIble for sohd waste, whIch excludes mdustrIaI tOXIC I and hazardous wastes, pathogemc / bIOlogIcal waste, radIOactIve waste, and related matenals as defined m the Contract i 1 2 Street Sweepmg 1 2 1 Sweep and clean all roads and SIdewalks wIthIn the town center (Zone 1) a mmlmum I of once per day, and keep these areas free of htter throughout the day 1 2 2 ProvIde suffICIent htter contamers for pedestnans to properly depOSIt theIr waste The I contamers shall have a place SUItable for placmg antl-htter messages LocatIOn of the contaIners IS to be determmed m consultatIon WIth the appropnate departments m the KMC and others as necessary The KMC's preference IS a mlmmum of one contamer per block LItter contamers I shall be unloaded dally I 1 3 Waste CollectIOn 1 3 1 Remove waste from all premIses m Zone 1 at least once a day and transport It m compactor trucks to the Town's dIsposal sIte Waste from larger commerCIal / mstItutlOnal I premIses that operate seven days per week shall also be collected seven days per week, unless the Contractor prOVIdes suffiCIent contamers for waste to be stored m a samtary manner on I Sundays However, under no condItIon shall the Contractor allow waste from larger generators to be uncollected for two consecutIve days I I I I I C-3 1 3 2 The Contractor may provIde contamers to prelTIlSes for waste storage pnor to collectIOn If bms or skIps are used, pnor approval must be obtamed from the appropnate KMC I departments or others I 2 Staffmg 2 1 Employment consIderatIon shall be gIven to the SWMD's staff currently assIgned to I Zone 1 2 2 Dnvers and laborers are to wear umforms that wIll mclude an apron or vest to be of I bnght orange WIth the name of the Contractor on the back 2 3 Smce Zone 1 COntaInS a hIgh securIty area, It IS essentIal to engage a very relIable staff for thIs work All employees engaged for thIs Contract will have to carry theIr company IdentIty I cards and NatIOnal IdentIty Cards and are to have clearance from the polIce department I 3 EqUIpment / Mamtenance 3 1 Procure and mamtam all eqUIpment needed for the serVIce durmg the entIre term of the I Contract 3 2 A depot to park and mamtam vehIcles must be prOVIded by the Contractor I 3 3 All vehIcles used for waste collectIon and transport are to be washed regularly I 4 Contract AdmimstratIOn 4 1 Contractor to provIde contact, telephone number(s), and addresses to a representatIve I of the KMC and the publIc 4 2 Dally reports on routes servIced, tnps to the dIsposal SIte, eqUIpment status and mamtenance performed, employee attendance, and the type and nature of complamts receIved I are to be submItted to the SWMD every two weeks I 5 Payments 5 1 The KMC WIll pay the Contractor on a monthly baSIS, one month m arrears, less I charges for lIqUIdated damages 5 2 Smce the Contract will be for five years, prospectIve contractors may propose payment I on a fixed pnce baSIS WIth a separate pnce for each year, or a fITst year pnce WIth an annual adjustment based on all or a portIOn of a publIshed mflatIon mdex The KMC wIll conSIder the deSIgnatIOn of certam expense Items (dIesel fuel) for adjustment on a pass-through cost baSIS I ProspectIve contractors are to defme the Items they would propose handlmg m thIs manner I I I I C-4 5 3 The Contractor IS not to demand money from premIses m Zone 1 for any servIces to be I provIded under thIs contract 6 Contract Secunty I 6 1 A BId Bond, or a certIfied bank check made payable to the Kandy Mumclpal CouncIl, m the amount of 2 0 percent of the fIrst year value of the Contract IS to be submItted WIth the I response to the Request for Tenders A bId bond IS to be valId for 120 days 6 2 The Contractor IS to furmsh a Performance Bond for the annual value of the Contract The bond IS to be valId for five years ProspectIve contractors are to submIt a consent of surety I on obtalmng a Performance Bond WIth the submISSIon of the response to the RFT I 7 Contract 7 1 Contractor to begm work wlthm 90 days of NotIce of Proceed I 7 2 LIqUIdated damages, as specIfIed m the Contract, shall be applIed to the Contractor's monthly payment for faIlure to provIde servIces to an acceptable standard I 7 3 All partIes to the selected partnershIp shall be m complIance WIth applIcable rules and regulatIOns m Sn Lanka I 7 4 The KMC reserves the nght to termmate the Contract for the faIlure of the Contractor to perform m an acceptable manner, as speCIfIed m the Contract I 3 Pre-SubmISSion Meetmg A mandatory pre-subnusslon meetmg wIll be held on 21 DAYS AFTER RELEASE OF PRE I QUALIFICATIONS REQUEST The SWMD will present detaIls on waste generatIOn m Zone 1, premIses to be servIced, eXlstmg operatIOns, and the dISPOSal SIte ProspectIve contractors WIll I also be reqUIred to attend a mandatory SIte InspectIOn of the town center 4 Site InspectIOn I PCs shall InSpect the area to be servIced to determIne the number of premIses from whIch waste IS to be collected, roads and SIdewalks to be swept, and route to transport waste and lItter to the dIsposal SIte, and all other CIrcumstances that affect the cost and nature of the work to be I performed A SIte mspectIon IS reqUIred as part of the mandatory Pre-SubmIssion Meetmg AdditIonal guided site mspectIons may be arranged With the SWMD I It IS estImated that the number of premises m the town center from whIch waste IS collected IS about 2,764 PCs shall not rely upon thIs estImate and by submlttmg a response a PC warrants I and agrees that m formulatIng and submIttmg a response, the PC has relIed solely upon the PC's I I I I C-5 mspectIOn of the area m WhICh the work IS to be performed and upon the PC's own Judgment I as to the amount and nature of the work to be performed The KMC IS relymg upon the expertIse of the PC to determme the nature and amount of work to be performed, and, If deemed qualIfied, m formulatmg a pnce for the servIce to be I performed The successful PC shall not be relIeved of the oblIgation to execute a Contract or to fully perform all oblIgatIOns under the Contract by reasons of any error, mIscalculatIOn or I omISSIOn m the InspectIOn of the area where the work IS to performed 5 Requests for ClarIficatIOn I It IS the responsIbIlIty of PCs to request clanficatIOn of any ambIgUItIes, dIscrepanCIes, or errors ill this PQR Requests for clanficatIOn shall be m wntmg and shall be delIvered to the KMC no I later than 21 days pnor to submISSIon of responses to the PQR All requests for clanfication WIll be responded to m wntmg WIth a copy prOVIded to every PC I that has, as a matter of record, receIved thIS PQR Any supplementallllStructIons WIll be forwarded ill wntmg as addenda to all PCs who have, as a matter of record, receIved thIS PQR All addenda Issued under this PQR shall be SIgned by I the PCs authonzed representatIve and submItted WIth the response the tills PQR I 6 Project Schedule The schedule for this project IS shown below I Date after Release of PQR Event I 21 days Pre-SubmIssIon Meetmg (Mandatory) 30 days Fmal date for submISSIOn of questIOns for clanficatton 45 days SubmISSIOn of responses to Pre-QualIfIcatIOn Request I 60 days Short lIst of qualIfied contractors Release Request for Tenders 120 days SubmISSIon of responses to Request for Tenders I 150 days Selection of Contractor 180 days Negotiation of servIce agreement and pnce 190 days Award of contract, and Issue Notice to Proceed I 280 days Date of Commencement of OperatIOns I 7 Legal ReqUIrements In performmg the Contract to be awarded, the Contractor IS to comply WIth all applIcable laws, I ordmances, and regulations A PC IS responsIble to be famIlIar WIth applIcable laws, ordmances, and regulations that may ill any manner effect a PC's abIlIty to perform or cost of performance I I I I C-6 8 DelIvery of Pre-qualIficatIOn SubmIssIOn I Prospective contractors shall submIt one ongInal and three copIes of theIr Pre-QualIfIcatIOn SubmIssIOn to the KMC by 400 pm on 45 DAYS AFTER RELEASE OF PRE QUALIFICATIONS REQUEST The SUbmISSIOn IS to be sent or delIvered to the Kandy Town I Hall I Any submIssIOns receIved after the tIme or date specIfied above WIll be returned unopened 9 Pre-QualIfications QuestlOnmure I The mformatIon requested on Form A IS to be completed In full FaIlure to complete thIS form could result In dIsqualIfIcatIOn I I I I I I I I I I I I I I I C-7 I FormA Pre-QualIficatIOn InformatIOn I 1 General InformatIOn I 1 1 ProspectIve Contractor I Name of Orgaruzatlon Address I Telephone ------Fax I Contact Person I Type of orgamzatlon (corporatIon, Jomt venture, partnershIp, mdIvIdual) If the prospectIve contractor IS a Jomt venture or partnershIp composed of two or more entItles, I then the mformatIOn requested on thIS Form IS to be submItted for each entIty 1 2 Submtt an orgaruzatIonal chart that IdentIfIes all entItles, mcludmg orgaruzatIOn, pnnclpals, and subcontractors, you plan to have partIcIpate m thIS Contract IdentIfy the role of each of I these partICIpants to the servIce to be proVIde by the prospectIve contractor Attach the requested InformatIon to thIS Form I 2 Experience 2 1 How many years have you been m busmess under the present busmess name? If you have I operated under a different name, mdlcate the name and the number of years It operated under I that name I 2 2 LIst the entItIes (government agenCIes, corporatIOns, mdIvIduals) for whIch you have performed work WIthIn the last fIve years Defme the nature of the work performed, such as JarutOrIal servIces, transport, matenal handlmg IdentIfy the penod of tIme durmg WhICh work I IS or was performed, mc1udmg start and completIon dates, If appropnate PrOVIde contact names and telephone numbers for each entIty lIsted I I I I I C-8 I I 23 Have you ever faIled to complete any work awarded to you? If so, when, where and why I 2 4 Has any offIcer or partner of your organIZatIon faIled to perform on a contract In the past I five years? If so, when, where and why I 2 5 List the key personnel In your organIZatIon and define therr areas of expenence, such as I Jamtonal serVIce, transportation, matenal handlIng Show theIr areas of responsIbIlIty on thIS contract Attach theIr resumes I I 2 6 LIst any laWSUIts or regulatory mvestlgatlons, cnmmal or CIvIl, your orgarnzatlon or any pnnclpals have been mvolved m the past fIve years? If so, when, where and nature of such I mvolvement I 3 Techmcal I 3 1 IdentIfy (1) type of eqUIpment you propose to use for thIs contract, (2) source of the eqUIpment, (3) schedule for procurement, mcludIng delIvery to Kandy, and (4) procedures for I mamtenance 3 2 OutlIne the plan you propose to follow for staffmg thIs contract I 4 Fmancial Capablbty 4 1 PrOVide your audIted fInanCial statements (balance sheet, mcome statement, cash flow I statement) for the past three years (Auditor to be an mdependent certified publIc account) PrOVIde a statement on changes, If any, In fmancml pOSItIon smce last audIted statement I Statement to be SIgned by authorIZed representative of your orgarnzatlOn I I I I C-9 4 2 Statement on avaIlabIlIty or access to workIng capItal to perform contract servIces I Statement to be sIgned by authorIZed representative of your organIZatIOn 4 3 EstImate of capItal requIred for start-up and proVIde your explanatIOn of how these costs I wIll be met 4 4 IdentIfy the fmancIaI mstitutiOns to be used to Implement the contract ProVIde a letter I of commItment 4 5 ProVIde eVIdence of commItments receIved for BId Bonds and Performance Bonds on I preVIOUS contracts, mcludmg name of bondmg company, contact name, and telephone number I Name of Tenderer AuthorIZed Representative WItness I Name (Typed) Name (Typed) I Name (SIgnature) Name (SIgnature) I TItle TItle I Date Date I (Seal) I I I I I I I I C-IO I Attachment 3 I Larger CommercIal Busmesses and InstItutIOns m Town Center I CommercIal Busmesses LocatIOn Awanhala Hotel Dalada Street I Bake House Hotel Dalada Street Chuty Restaurant Perademya Street Devon Hotel Dalada Street I EmpIre Hotel & Bakers Perademya Street Flower Song Hotel Kotugodella Street Foodland Hotel Yatmuwara Street I Ganesha Nandan Hotel Perademya Street Kandy Comer Hotel DS Senanayake Street Kasamara Hotel Kotugodella Street I MuslIm Hotel Dalada Street Lake Front Hotel Dalada Street Old EmpIre Hotel Temple Road I Palwa Restaurant Yatmuwara Street Perera Hotel SWRD BandaranaIke Street Queens Hotel Dalada Street I Rodney Restaurant & Bar DS Senanayake Street Salgado Hotel Kotugodella Street Saumya Hotel DS Senanayake Street I Sn Lanka TelIcom Ltd SWRD BandaranaIke Street VICtOry Restaurant & Bar Srunath Bennet Soysa Street Vmcy Caters Kotugodella Street I WhIte House Hotel Dalada Street Woodlands Hotel DS Senanayake Street I Zazadis Hotel Dalada Street InstitutIOns - Government I Army Camp (Smgha Regunent) Yatmuwara Street Central ProvmcIaI CouncIl Yatmuwara Street Government Secretanat Yatmuwara Street I Kandy Mumcipal CouncIl Kande Street Mlll1stry of HIghways & ConstructIon Yatmuwara Street Nat'l Housmg & Development Authonty Yatmuwara Street I Post Office SWRD BandaranaIke Street I I I I C-ll InstItutIOns - MedIcal I Kandy General HOSpItal Bogambara area I InstItutions - Schools St Sylvesters College Yatmuwara Street TrIruty College DS Senanayake Street I VIdyartha College Katugastota Road I InstitutIOns - PrIsons Bogambara PrIson Bogambara area I Remand PrIson Raja Veedlya (Kmg Street) InstItutions - RelIgIous I Kataragama Dewala Kotugodella Street SrI Dalada MaIIgawa (Temple of the Tooth RelIc) Dalada Street I SrI Selvavmayagar KovI1 Peraderuya Road Tapovana Temple Kande Street I I l I I I I I I I I I Appendix D Draft: Request for Tenders I 1 InstructIOns to Respondents I The Request for Tenders (RFT) IS desIgned to enable the TechnIcal EvaluatIOn CommIttee of the Kandy Mumclpal CouncIl to evaluate the technIcal/operatIOnal approach by whIch you propose to provIde the serVIces outlmed m SectIOn 2 - Statement of Work Each prospectIve I contractor (PC) IS also to complete the cost proposal, and the baSIS upon you propose to escalate the costs on an annual baSIS I All of the mformatIOn requested m thIs package IS to be completed In your tender submISSIon PCs that fall to submIt all of the requested mformatIOn may be rejected from further I conSIderatIon Responses to each questIon shall be typewrItten on Form A or on A4 format paper and attached I to Form A Attached responses shall be numbered m the same sequence as the tOpICS covered In Form A The submISSIOn m response to thIS RFT must be SIgned by an authonzed representatIve of the PC The authorIZed representatIve that SIgns Form A warrants the truth and I accuracy of all statements made by the PC In ItS submISSIon By submlttmg a response, a PC warrants that the PC (1) has reVIewed all pertment Tender I documents and addenda, (2) has Inspected the area m whIch the work IS to be performed and the condItIOns under the work wIll be performed, and (3) has not dIscovered any ambIgUItIes or conflIcts In the work descnptIon, speCIfIcatIons, or other terms or condItIOns of the Tender I documents The KMC reserves the rIght to request addItIOnal InformatIon regardIng a PC's submISSIOn to I thIS RFT I 2 Statement of Work The KMC IS Issumg thIS RFT to compames that have been pre-qualIfIed to prOVIde waste collectIOn, street sweepmg, and transport to dIsposal SIte servIces m the town center, exc1udmg I the market area, of Kandy for a penod of five years These serVIces currently are bemg proVIded by the SolId Waste Management DIVISIon (SWMD) WIthIn the KMC The town center IS defIned I as the SWMD's Zone 1, see Attachment 1 The premIses servIced by SWMD route In Zone 1 and a lIstIng of the larger waste generators In the town center are gIven m Attachments 2 and 3, respectIvely The selected contractor WIll I not be reqUIred to follow the same routes used by the SWMD A speCIfIC routmg plan IS to be submItted WIth the response to thIS RFT I I I I D-2 The selected contractor IS to mamtam a hIgh level of cleanlmess m the town center through waste collectIOn, street sweepmg, and transport to the KMC's dIsposal sIte The specIfIc scope I of work for the waste management servIces to be provIded IS gIven below I Scope of Work 1 OperatIOns I 1 1 General 1 lIThe waste / htter collected shall be transported m a compactor truck to the Town's I dIsposal sIte m Gohagoda, which IS eIght kIlometers from the town center I 1 1 2 There wIll be no dIsposal charge for waste dehvery, under the terms of the Contract 1 1 3 The Contractor shall only be responsIble for sohd waste, which excludes mdustrIaI tOXIC and hazardous wastes, pathogemc / bIOlogIcal waste, radIoactIve waste, and related matenals as I defined m the Contract I 1 2 Street Sweepmg 1 2 1 Sweep and clean all roads and SIdewalks wlthm the town center (Zone 1) a mlrumum I of once per day, and keep these areas free of htter throughout the day 1 2 2 ProvIde suffIcIent htter contamers for pedestnans to properly depOSIt theIr waste The contamers shall-haue a place SUItable for plaCing antl-htter messages Location of the contamers I IS to be determmed m consultatIon WIth the appropnate departments m the KMC and others as necessary The KMC's preference IS a mlrumum of one contamer per block LItter contamers I shall be unloaded dally 1 3 Waste Collection I 1 3 1 Remove waste from all premIses m Zone 1 at least once a day and transport It m compactor trucks to the Town's dIsposal SIte Waste from larger commerCial/InstitutIOnal premIses that operate seven days per week shall also be collected seven days per week, unless I the Contractor prOVides suffiCIent contamers for waste to be stored m a samtary manner on Sundays However, under no condItIOn shall the Contractor allow waste from larger generators I to be uncollected for two consecutIve days 1 3 2 The Contractor may prOVIde contaIners to premISes for waste storage pnor to collectIOn I If bms or skips are used, pnor approval must be obtamed from the appropnate KMC departments or others I I I D-3 I 2 Staffing I 2 1 Employment consIderatIOn shall be gIven to the SWMD's staff currently assIgned to Zone 1 I 2 2 Dnvers and laborers are to wear umforms that wIll mclude an apron or vest to be of bnght orange WIth the name of the Contractor on the back I 2 3 Smce Zone 1 contams a htgh secunty area, It IS essentIal to engage a very rehable staff for tills work All employees engaged for tills Contract wIll have to carry theIr company IdentIfy I cards and NatIOnal IdentIty Cards and are to have clearance from the pohce department 3 EqUIpment I Mamtenance I 3 I Procure and mamtam all eqUIpment needed for the servIce dunng the entIre term of the Contract I 3 2 A depot to park and mamtam vehIcles must be proVIded by the Contractor I 3 3 All vehIcles used for waste collectIon and transport are to be washed regularly 4 Contract AdmiIDstratIOn I 4 1 Contractor to proVIde contact, telephone number(s), and addresses to a representatIve of the KMC and the pubhc I 4 2 DaIly reports on routes servIced, the trIpS to the dIsposal sIte, eqUIpment status and mamtenance performed, employee attendance, and the type and nature of complamts receIved I are to be submItted to the SWMD every two weeks 5 Payments I 5 1 The KMC WIll pay the Contractor on a monthly baSIS, one month m arrears, less charges for hqUIdated damages I 5 2 Smce the Contract wIll be for five years, prospectIve contractors may propose payment on a fIXed pnce baSIS WIth a separate pnce for each year, or a fIrst year pnce wIth an annual adjustment based on all or a portIon of a pubhshed mflatlon mdex The KMC WIll consIder the I deSIgnatIOn of certam expense Items (dIesel fuel) for adjustment on a pass-through cost baSIS ProspectIve contractors are to derme the Items they would propose handlmg m tms manner I 5 3 The Contractor IS not to demand money from premIses m Zone 1 for any servIces to be I prOVIded under tills contract I I I I D-4 6 Contract Secunty I 6 1 A BId Bond, or a certIfied bank check made payable to the Kandy Mumclpal CouncIl, m the amount of 2 0 percent of the first year value of the Contract IS to be submItted WIth the I response to the Request for Tenders A BId Bond IS to be valId for 120 days 6 2 The Contractor IS to furmsh a Performance Bond for the annual value of the Contract The bond IS to be valId for five years ProspectIve contractors are to submIt a consent of surety I on obtalmng a Performance Bond WIth the submIssIOn of the response to the RFT I 7 Contract 7 1 Contractor to begm work wlthm 90 days of NotIce of Proceed I 7 2 LIqUIdated damages, as speCIfied m the Contract, shall be applIed to the Contractor's monthly payment for faIlure to plovlde servIces to an acceptable standard I 7 3 All partIes to the selected partnershIp shall be m complIance WIth applIcable rules and regulatIons m Sn Lanka I 7 4 The KMC reserves the nght to termmate the Contract for the faIlure of the Contractor to perform m an acceptable manner, as speCIfIed m the Contract I 3 Site Inspection PCs shall lllSpect the area to be servIced to determme the number of premIses from whIch waste I IS to be collected, roads and SIdewalks to be swept, route to transport waste and lItter to the dIsposal SIte, and all other cIrcumstances that affect the cost and nature of the work to be performed You were requIred to attend a sIte InspectIOn, as part of the mandatory Pre I SubmISSIon Meetmg AddItIOnal guIded sIte InspectIons may be arranged WIth the SWMD It IS estImated that the number of premIses m the town center from whIch waste IS collected IS I about 2,764 PCs shall not rely upon thIs estImate and by submlttmg a response a PC warrants and agrees that m formulatmg and subffilttmg a response, the PC has relIed solely upon the PC's lllSpectIon of the area m whIch the work IS to be performed and upon the PC's own Judgment I as to the amount and nature of the work to be performed The KMC IS relymg upon the expertIse of the PC to determme the nature and amount of work I to be performed, and m formulatIng a pnce for the servIce to be performed The successful PC shall not be relIeved of the oblIgatIOn to execute a contract or to fully perform all oblIgatIOns under the contract by reasons of any error, mIscalculatIOn or OmISSIOn m the InspectIOn of the I area where the work IS to performed I I I I i D-5 4 Contract I A draft Contract for the servIce bemg requested under this Tender process IS presented m Attachment 4 to thIS Request for Tenders (NOTE In thIS report the contract IS presented m AppendIX E) Unless a specIfic deViatIon or exceptIOn to the terms of the draft Contract IS stated I m the response to thIS RFT, It shall be understood that the PC IS wIllIng to execute a Contract takmg the form specIfIed m the draft Contract I 5 Requests for ClarIficatIOn It IS the responsIbIlIty of PCs to request clanficatIon of any ambIgUitIes, dIscrepanCIes, or errors I m thIs RFT Requests for clanficatIOn shall be m wntmg and shall be delIvered to the KMC no later than 21 days pnor to submIssIOn of responses to the RFT I All requests for clanficatIOn WIll be responded to m wntmg WIth a copy provIded to every PC that has, as a mater of record, receIved thIS RFT I Any supplementa1lllStructIons WIll be forwarded m wntmg as addenda to all PCs who have, as a matter of record, receIved thIs RFT All addenda Issued under thIS RFT shall be sIgned by the I PCs authonzed representative and submItted WIth the response the thIS RFT 6 Project Schedule I The schedule for thIS project IS shown below I Date after Release of POR 21 days Pre-SubmISSIon Meetmg (Mandatory) 30 days Fmal date for submIssIon of questIOns for clanficatIOn I 45 days SubmIssIon of responses to Pre-QualIfIcatIOn Request 60 days Short lIst of qualIfIed contractors Release Request for Tenders I 120 days SubmIssIon of responses to Request for Tenders 150 days SelectIon of Contractor 180- days NegotiatIon of servIce agreement and pnce I 190 days Award of contract, and Issue NotIce to Proceed I 280 days Date of Commencement of Operations 7 Legal Reqwrements In performmg the Contract to be awarded, the Contractor IS to comply WIth all applIcable laws, I ordmances, and regulatIOns A PC IS responsIble to be famIlIar WIth applIcable laws, ordmances, I and regulatIOns that may III any manner effect a PC's abIlIty to perform or cost of performance I I I I D-6 8 Subcontractors I Subcontractors proposed to undertake any portIOn of thIS project are to be IdentIfIed m the response to the RFT Also the KMC shall approve any changes m subcontractors dunng the term I of the Contract The Contractor IS lIable for the faIlure of subcontractors to perfonn m any phase of the work i 9 DelIvery of Request for Tenders SUblDlSSIOD ProspectIve contractors shall subrrnt one ongmal and three copIes of theIr Tender submIssIon to I the KMC by 400 pm on 120 DAYS AFTER RELEASE OF PRE-QUALIFICATION REOUEST The submISSIon IS to be sent or deltvered to the Kandy Town Hall I Any submIssIOns receIved after the tune or date speCIfIed above WIll be returned unopened I 10 Proposed Work Approach The speCIfIc approach you propose to take to provIde the requested servIces IS to be descnbed m sufficIent detaIl to assess ItS ments The areas on whIch you are to provIde mformatlon are I • OperatIOnal plan to undertake waste collectIon and street sweepmg, mcludmg waste collectIOn routes, produCtIVIty standard (number of premIses to be collected per day), I frequency of waste collectIon and street sweepmg, and daIly work schedule, • EqUIpment to be used (speCIfy the make, model and capaCIty) and procurement schedule from placement of order to delIvery m Kandy, I • Staffmg plan, mcludmg labor categones, number of work crews, ShIftS per day, hours / days to be worked per week (Selected contractor to gIve current SWMD staff m Zone 1 sUItable employment consIderatIOn), I • LocatIon of eqUIpment yard, mcludmg current ownershIp and schedule for access to SIte unless already owned or leased If leased, specIfy lease term, I • Mamtenance, mcludmg schedule for preventIve mamtenance and major repaIrs, and ltst of tools and spare parts to be supplted, • Approach to customer relatIOns, mcludmg the promotIon of proper waste storage and I handlmg technIques WIth premIses, placement of antI-lttter posters on lttter contamers, and respondIng to servIce complaInts, and • PublIc educatIOn program plan, IncludIng plans to subcontract actIVItIes to others such as a I nongovernmental orgamzatIOn (NGO) I 10 Cost Proposal PC IS to complete the cost proposal gIven m Form A The form IS to be SIgned by an authorIZed I representatIve of the PC that IS submIttmg the response to thIs RFT I D-7 I FormA I Cost Proposal I 1 First Year Cost I The proposed cost per month dunng the fIrst year of operatIon IS FIgures ------Words I The Kandy MUnICIpal CouncIl (KMC) would prefer a set cost per month durmg the fIve-year term of the contract However, the KMC WIll consIder other means of adJustmg the cost on an annual baSIS POSSIble optIOns mclude an adjustment based on a percentage of an offICIally I publIshed cost escalator, such as 40 percent of the Consumer Pnce Index In addItIOn, the KMC WIll conSIder annual adjustments to cost components on a pass-through I baSIS Costs that could qualIfy are those that are outSIde the control of a contractor, and WIll be adjusted on the baSIS of actual cost As an example, the cost to transport to a dIsposal SIte WIll be adjusted on a pass-through, If a new dIsposal SIte IS developed that IS further than eIght I kIlometers from the town center A pass-through cost WIll be pnced at the actual expense I 2 Annual Escalation 2 1 FIxed PrIce Annual AdJustment I If a fIxed annual cost IS proposed, speCIfy the proposed annual cost durmg years two through fIve of operatIon below I Year 2 FIgures ------Words Year 3 FIgures ------Words I Year 4 FIgures ------Words Year 5 FIgures ------Words I 22 PrIce EscalatIOn Factor As an alternatIve to a fixed prIce, a proposed escalatIOn factor may be proposed If thIs method I IS proposed proVIde the followmg EscalatIOn Index I PublIsher of Proposed Index I Percentage of Index to Apply (%) I I D-8 2 3 Pass-Through Costs I ProspectIve contractors may desIgnate cost components as pass-through costs SpecIfy the proposed components to be desIgnated for classIficatIOn as pass-through costs, and the reasons I for thIs request I I The under SIgned authorIzed representatIve of the prospectIve contractor that IS submlttmg thIS response to the Request for Tenders has carefully exammed the Tender documents and I thoroughly understands theIr stIpulatIOns, reqUIrements, and provISIOns I Name of Tenderer I AuthorIZed RepresentatIve WItness I Name (Typed) Name (Typed) I Name (SIgnature) Name (SIgnature) I TItle TItle I Date Date I (Seal) I I I I I I I D-9 Attachment 3 I Larger CommercIal BusIllesses and InstItutIOns III Town Center I CommercIal Busmesses Location Awanhala Hotel Dalada Street I Bake House Hotel Dalada Street Chuty Restaurant Perademya Street Devon Hotel Dalada Street I EmpIre Hotel & Bakers Perademya Street Flower Song Hotel Kotugodella Street Foodland Hotel Yatmuwara Street I Ganesha Nandan Hotel Perademya Street Kandy Comer Hotel DS Senanayake Street Kasamara Hotel Kotugodella Street I MuslIm Hotel Dalada Street Lake Front Hotel Dalada Street Old EmpIre Hotel Temple Road I Palwa Restaurant Yatmuwara Street Perera Hotel S W R D Bandaranatke Street Queens Hotel Dalada Street I Rodney Restaurant & Bar DS Senanayake Street Salgado Hotel Kotugodella Street Saumya Hotel DS Senanayake Street I Sn Lanka TelIcom Ltd S W R D Bandaranatke Street VICtOry Restaurant & Bar SrImath Bennet Soysa Street Vmcy Caters Kotugodella Street I WhIte House Hotel Dalada Street Woodlands Hotel DS Senanayake Street I Zazadis Hotel Dalada Street InstitutIons - Government I Army Camp (Smgha RegIment) Yatmuwara Street Central ProvmcIaI CouncIl Yatmuwara Street Government Secretanat Yatmuwara Street I Kandy MUillcipal CouncIl Kande Street Mlillstry of HIghways & ConstruCtIon Yatmuwara Street Nat'l Housmg & Development Authonty Yatmuwara Street I Post Office SWRD BandaranaIke Street I I I I I D-lO InstitutIOns - MedIcal I Kandy General HOSPItal Bogambara area I InstitutIOns - Schools St Sylvesters College l{atmuvvara Street TrImty College DS Senanayake Street I VIdyartha College Katugastota Road I InstItutIOns - PrIsons Bogambara PrIson Bogambara area I Remand PrIson Raja Veedlya (Kmg Street) InstItutIOns - ReltglOus I Kataragama Devvala Kotugodella Street SrI Dalada Mahgavva (Temple of the Tooth Reltc) Dalada Street I SrI Selvavmayagar KOVII Perademya Road Tapovana Temple Kande Street I I I I I I I I I I I Appendix E Draft: Contract ServIces for Waste CollectIOn, Street SweepIng, and I Transport to Disposal SIte I ThIS Contract IS made thIS day of , 1999, between the Kandy Mumclpal CouncIl (heremafter referred to as "KMC"), and (heremafter referred to I as the "Contractor") The KMC and the Contractor, for and m consIderatIOn of the mutual promIses and agreements I set fort.h m tPJ.s Contract- and mtendmg- to be- legally bound, agree as fOllOWS ARTICLE 1 DEFINITIONS I a "Annual Payment" shall mean the total amount to be paId the Contractor m twelve equal payments and adjusted yearly based on the procedure establIshed m the Tender Documents I b "Contract" shall mean thIS Contract between the KMC and the Contractor I c "Contract Documents" shall mean the Tender Documents d "Contractor" shall mean an mdlvldual, a partnershIp, Jomt venture, company, sole propnetorshIp, and a corporatIon, Its lawful successors and ItS duly authorIZed representatIves, I mcludmg Subcontractors and agents e "Date of Commencement of OperatIOns" shall mean the date of Imtxal day when the I Contractor IS prepared to proVIde the Contract servIce, and whIch may be sooner but shall not be later than 90 Days after the date the NotIce to Proceed IS Issued by the KMC I f "Day" or "days" shall mean a calendar day g "DISPOSal SIte" shall mean the Town's dump m Gohagoda located about eIght kIlometers I from the Town Center h "Force MaJeure" shall mean Acts of Nature, acts of the publIc enemy, not, dIsorder, I epIdemIC, landslIde, IIghtemng, earthquake, fire, storm, flood, CIVIl dIsturbance, explOSIon, mterference by CIvIl or mIlItary authontles, or SImIlar causes beyond the control of the I Contractor I "NotIce to Proceed" shall mean the wrItten notIce to the Contractor by the KMC whIch I commences the term of the Agreement J "PremIses" shall mean the reSIdences, commerCIal busmesses, and mstItutIons located I m Zone 1 The number to be mutually agreed between the KMC and the Contractor and subject to adjustment durmg the Contract Term I I D-12 k "Pre-QualIficatIOn Request" shall mean the document released by the KMC that requested expenence, technIcal, and fInancIal capabIlIty InfOrmatIOn from prospective I contractors I "Request for Tenders" shall mean the document released by the KMC that requested a I SUbffilssion from pre-qualIfied contractors to descnbe theIr Work Approach and present a cost proposal I m "ServIces" shall mean the Statement of Work, and related sectIOns, as defmed In the Tender Documents I n "SolId Waste" shall mean matenal generally mcludIng, but not necessanly lImIted to, such Items as newspapers, corrugated cardboard, other paper, food waste, metal (ferrous and non-ferrous), glass, ceramICS, leaves and yard waste, wood, plastIc, fabncs, other matenal I mcludmg lItter, dIrt, sod, street dIrt, small dead ammals, bulky waste, and slffillar waste matenals IncludIng lItter ordmanly collected by the Town I o "Statement of Work" shall mean the servIces as defIned m Section 2 of the Request for Tenders and elsewhere In the Tender Documents I p "Subcontractor" shall mean persons, firms, or corporatIOns havmg a dIrect contract WIth the Contractor to perform a portIOn of the work specIfied I q "Tender" shall mean the submISSIon from the Contractor In response to the Request for Tenders I r "Tender Documents" shall mean all documents assocIated WIth thIS procurement, mcludmg, but not lIffilted to Tender NotIce, Pre-QualIfIcatIOn Request, Request for Tenders, mcludmg the Statement of Work, any addenda to the proceedmg, the Contractor's submISSIOns I to the Pre-QualIficatIOns Request and the Request for Tenders, and any addItIOnal agreements between the KMC and the Contractor durmg negotiations I s "Term" shall commence on the date of the NotIce to Proceed and shall termmate fIve years from the Date of Commencement of OperatIons I t "Town" shall mean the Town of Kandy u "Town Center" shall mean the area as defmed by KMC SolId Waste Management I DIVISIOn's Zone 1 I V "Unacceptable Waste" shall mean matenals, exclUSIve of SolId Waste as defmed herem, such as, but not llffilted to, hazardous waste, whIch IS waste by reason of ItS compOSItIon or charactenstics that IS tOXIC or hazardous, explOSIves, reactIve matenals, pathogernc and I bIOlogICal waste, asbestos, radIOactIve matenals, mcmerator reSIdue, chemIcals, foundry sand, sewage or other non-hazardous sludge, cesspool and other human waste, and human remaIns • I I D-13 W "Waste CollectIOn VeIncle" shall mean a compactor truck I x "Work Approach" shall mean the manner In wInch the Contractor wIll provIde the Contract servIces, as defmed m the Tender Documents I y "Zone 1" means the town center, the area of Kandy on WhICh the Contractor IS to provIde street cleanmg and waste collectIOn and from which thIS waste IS to be transported to I the dIsposal SIte TIns area excludes the market area, wInch IS located wItl11n the Town Center ARTICLE 2 CONTRACTOR'S OBLIGATIONS I 2 1 The work to be done under the Contract IS defined m the Tender Documents Any changes m latter Tender Documents shall take precedence to former Tender Documents ThIS I work IS be done under the schedule specIfIed m the Tender Documents 2 2 The Contractor shall furmsh and/or obtam all labor, matenals, plant, tools, supplIes, eqUipment, transportatIOn, lIcenses, permIts, and other facIlIties and tlnngs necessary or proper I for or mCIdental to waste collectIOn, street sweepIng, and waste / lItter transport from the Town Center to the Town's DIsposal SIte, and shall provIde the servIces In the manner and WIthIn the tIme reqUITed m the Contract at the pnces proposed and agreed upon between the KMC and the I Contractor 2 4 The Contractor IS to fulfIll the serVIces as defmed In the Statement of Work of the I Request for Tenders 2 3 The Contractor shall ImtIate any changes to the Work Approach, as proposed by the I Contractor and agreed upon by the KMC, WIthOUt the pnor wntten approval of the KMC 2 4 There shall be no mterruptIOn m the servIces to be rendered and the work to be I performed by the Contractor, except under a condItIOn of Force Majeure I ARTICLE 3 INSPECTION 3 1 All of the work of the Contract shall be subject to InspectIOn of the KMC, or Its deSIgnated representatives, for the purpose of determlillng complIance WIth the provlSlons of the I Contract AuthorIZed representatIves of the KMC shall be permItted access at all reasonable tlmes to all portIOns of the work 90 days before and any day after the Date of Commencement I of OperatIOns ARTICLE 4 SUBCONTRACTORS I 4 1 The Contractor shall not enter lUtO any subcontracts for the ServIce WIthOut the prIor I WrItten consent of the KMC I D-14 l ARTICLE 5 CONTRACT DOCUMENTS I 5 1 All the tenus, provIsIons, COndIllOns and oblIgatIons set forth m the Tender Documents shall constItute a part of thIS Contract and are to have the same force and effect as If set forth I speCIfIcally and at length herem ARTICLE 6 LIOUIDATED DAMAGES I 6 1 Start of ServIce - LIqUIdated damages shall be paId based on the followmg formula for any delay m start of servIce after the Date for Commencement of OperatIOns I 9(100 percent of annual payment /365 Days) x (number of Days In delay of ServIce from Date of Commencement of OperatIOns) x (damages factor 4) I 62 ServIce I 6 2 1 Waste CollectIOn 6 2 1 1 LIqUIdated damages wIll be assessed for unacceptable serVIce based on the followmg formula I • «60 percent of annual payment / 365 days) / (number of PremIses m Zone 1» x (number of complamts on waste collectIOn that are not resolved wIthm four hours of receIpt) x (damages factor, based on the source of complamts 3 for small PremIses, 5 for large I PremIses) 6 2 1 2 LIqUIdated damages to be waIved for the fIrst month of the Contract to allow the I Contractor to address start-up Issues, unless the Contractor faIls to begm operatIons on the Date of Commencement of OperatIons I 6 2 2 Street Sweepmg I 6 2 2 1 LIqUIdated damages WIll be assessed for unacceptable servIce based on the followmg formula • «30 percent of annual payment / 365 days) / (number of lItter measurement areas to be I selected by the KMC) x (number of lItter Items counted m measurement areas over the baselIne level to be establIshed poor to Date of Commencement of OperatIon) x (damages I factor 3) 6 2 2 2 LIqUIdated damages to be waIved for the fIrst two weeks of the Contract to allow the Contractor to address start-up Issues, unless the Contractor fails to begm operatIOns on the Date I of Commencement of OperatIons I I D-15 6 2 3 Waste Transport I 6 2 3 1 LIqUIdated damages wIll be assessed for unacceptable servIce based on the followmg formula • (10 percent of annual payment I 365 days) I (number of Waste Collection VehIcles used to I transport waste to the DIsposal SIte» x (number of documented mCIdents of waste splIt or blown from a Contractor's Waste Collection VehIcle) x (damages factor 3) I 6 2 3 2 There shall be no waIver on lIqUIdated damages on thIS portIOn of the Contract I ARTICLE 7 COMPENSATION TO BE PAID CONTRACTOR 7 1 The KMC WIll pay the Contractor from Date of Commencement of Operations on a monthly baSIS one twelfth of the annual fee as establIshed m the Tender Documents, less any I lIqUIdated damages assessed under ArtIcle 6 of thIS Contract 7 2 Payment WIll be one month m arrears, and paId withm fIve days of the end of each I month I 7 3 The annual fee WIll be adjusted yearly based on the terms of the Tender Documents I ARTICLE 8 PERFORMANCE BOND 8 1 The Contractor shall furrush to the KMC a Performances Bond for faIthful performance of the serVIces reqUIred by thIS Contract m the amount of the value of the fIrst year of the I Agreement, WIth a proVIsIon for annual renewal 8 2 The Performance Bond shall be furrnshed 60 days before the Date of Commencement I of OperatIOns The KMC shall be notified of the successful annual renewal of the performance bond at least 30 days pnor to the eXpIratIOn of the eXIstmg bond The subsequent renewed performance bonds shall be m total amounts escalated m accordance WIth the Contractor's prIce I escalator as defmed m the Contract 8 3 It IS further mutually agreed between the partIes hereto that If at any tIme after the I NotIce to Proceed IS Issued, the KMC shall deem the surety or suretIes upon such bond to be unsatIsfactory, or If for any reason such bond ceases to be adequate to cover the performance of the work, the Contractor shall, withm fIve days after the receIpt of a wrItten notice from the I KMC so to do, furrnsh an addItIOnal bond or bonds m such form and amount, and WIth such surety or suretIes as shall be satisfactory to the KMC I ARTICLE 9 LAWS AND ORDINANCES 9 1 All applIcable laws, statutes, and ordmances and the applIcable rules, regulatIOns, I methods and procedures of all applIcable governmental boards, bureaus, offIces, commISSIOns, and other agents, shall be observed by the Contractor as far as they apply I I I I D-16 ARTICLE 10 INADVERTENT DELIVERIES OF UNACCEPTABLE WASTE I 10 1 The KMC shall use all reasonable efforts to cause only SolId Waste to be delIvered to the Contractor, and to assIst the Contractor to remedy delIvenes of Unacceptable Waste I ARTICLE 11 START OF SERVICE 11 1 Contractor to notIfy the KMC a mInImum of 30 days pnor to ItS scheduled Date of I Commencement of OperatIOns I ARTICLE 12 TERMINATION 12 1 ThIs Contract may be declared suspended or canceled by the KMC upon wntten notIce I to the Contractor for any of the followmg reasons (a) FaIlure of the Contractor to commence ServIce wlthm the tIme allowed for Date of I Commencement of OperatIons (b) FaIlure of the Contractor to provIde and mamtam suffIcIent labor and eqUIpment to I properly execute the ServIce (c) FaIlure of the Contractor to provIde the collectIon, street sweepmg, and transportatIOn I servIces, and all oblIgatIOns ancIllary to thIS Contract (d) The Contractor's InSolvency, bankruptcy, or mabIlIty to pay ItS debts, or an assIgnment by the Contractor for the benefit of ItS credItors, or the admISSIOn m wntmg by the Contractor I of any of the above (e) FaIlure of the Contractor to comply WIth thIs Contract or any matenal requIrements I stated herem I (t) The unauthorIzed assIgnment of the Contract or any funds due the Contractor (g) FaIlure to supply complete and accurate InformatIOn, records, or accounts as speCIfIed I m the Contract (h) Repeated fallure of the Contractor to resolve complamts by PremIses m the Town Center I WIthIn 24 hours of receIpt, or faIlure to adequately sweep the roads and SIdewalks m the Town Center, or faIlure to remedy spillage or blowmg of SolId Waste from Waste CollectIOn VehIcles I 12 2 If tIns Contract IS suspended or canceled, the Contractor shall dlscontmue the ServIce 12 3 Upon suspensIon or cancellatIon, the KMC shall have the power to perform and I complete, by contract or otherwIse, as It may determme, the ServIce descnbed III tills Contract I I I D-17 I as It may deem necessary, and the Contractor agrees that the KMC shall have the rIght to I procure eqUIpment, labor, and materIals necessary for completIOn of the ServIces 12 4 If the expenses to the KMC of completmg the ServIce shall exceed the amount that would have been payable under the Contract, then the contractor and/or Its surety shall pay the I amount of such excess to the KMC on WrItten notIce from the KMC of such excess due 12 5 In the event the Contract IS suspended or canceled, the surety company WIll have the I rIght to provIde the ServIce under the condItIOns of Contract The surety wIll have three days from of suspensIOn or cancellatIOn to the Contractor to lllitIate proVISIon of the Contract I SerVIce or forfeIt that nght ARTICLE 13 INDEPENDENT CONTRACTOR / INDEMNIFICATION I 13 1 It IS understood and agreed that Contractor and any of ItS subcontractors, employees or agents shall perform the ServIce covered by thIs Contract as an mdependent contractor and not I as an officer, agent servant or employee of the KMC 13 2 The Contractor shall assume full responsIbIlIty for all claImS, demands, and causes of actIon whIch may be asserted because of any Injury to property, Injury or death to any person, I or any other cause whatsoever, whIch anses out of or IS related to any of the actions or omISSIOns of the Contractor or ItS offIcers, employees, Subcontractors, or agents whether IntentIOnal, umntentIOnal, reckless, neglIgent or Inadvertent m provldmg the ServIce covered I by thIS Contract 13 3 The Contractor agrees to IndemnIfy and hold harmless the KMC from and agaInst all I claIms, demands, causes of actIOn, loss, damages, costs and expenses, mcludmg reasonable legal fees, WhICh may be asserted by any person ansmg out of the Contractor's performance I or faIlure to perform under the condItions of thIS Contract I I D-18 ARTICLE 14 ASSIGNMENT 14 1 Contractor shall not assIgn thIs Contract WIthOut the pnor wntten consent of the KMC ARTICLE 15 AUDIT OF BOOKS 15 1 The KMC may annually audIt the Contractor's books, records, and other data relatmg to oblIgatIons under tIns Contract Such audIts shall be at the expense of the KMC Contractor shall proVIde all such books, records and other related data m the Town of Kandy ARTICLE 16 EXECUTION OF AGREEMENT IN WITNESS WHEREOF, the partIes hereto have executed thIS Agreement WIth theIr respectIve seals on the day and date above wntten m two counterparts, each of whIch shall WIthout proof or accountmg for the other counterparts, be deemed an ongmal contract ATTEST (As to Contractor) *CONTRACTOR SIgned and sealed In the presence of _ By TItle ------ (SEAL) ATTEST Secretary (CORPORATE SEAL) I ATTEST Kandy MUnICipal CouncIl I By Title Title I *NOTE If the Contractor IS a corporatIon, the Contract shall be Signed by the Managmg Director attested by the Secretary or ASSistant Secretary and the corporate seal or a facsnmle I thereof affIxed If the Contractor IS a partnershIp, the Agreement shall be SIgned m the partnership name by one of the partners, With mdication that he IS a general partner I I