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Business Analysis of Fecal Sludge Management: Emptying and Transportation Services in Africa and Asia Draft Final Report

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Business Analysis of Fecal Sludge Management: Emptying and Transportation Services in Africa and Asia Draft Final Report Business Analysis of Fecal Sludge Management: Emptying and Transportation Services in Africa and Asia Draft Final Report Sangeeta Chowdhry and Doulaye Kone Sponsored by The Bill & Melinda Gates Foundation September 2012 ACKNOWLEDGMENTS This report was written by Sangeeta Chowdhry (independent consultant) under the guidance and supervision of Dr. Doulaye Kone (Bill & Melinda Gates Foundation). Several sector experts provided generous support of their time as advisors to this study. Their participation in several workshops that were held in in Africa and Asia, and review and feedback of the country proposals and reports is greatly appreciated. Rajesh Advani from the World Bank needs a special mention here. Mr. Advani provided valuable training in financial analysis to the country teams at workshops in Asia and Africa. The sector experts who served as advisors to this project are: Rajesh Advani (World Bank), Akica Bahri (African Development Bank), Matovu Jafari (Private Emptiers’ Association, Uganda), Roshan Shrestha (UNDP) and Dr Thammarat Koottatep (Asian Institute of Technology). Report disclaimer: This report is based on research funded by the Bill & Melinda Gates Foundation. The findings and conclusions contained within are those of the authors and do not necessarily reflect positions or policies of the Bill & Melinda Gates Foundation. Copyright notice: © 2012 Bill & Melinda Gates Foundation. All Rights Reserved. Bill & Melinda Gates Foundation is a registered trademark in the United States and other countries. 2 TABLE OF CONTENTS ACKNOWLEDGMENTS .............................................................................................................. 2 LIST OF FIGURES ...................................................................................................................... 5 LIST OF TABLES ........................................................................................................................ 6 ACRONYMS ............................................................................................................................. 7 EXECUTIVE SUMMARY ............................................................................................................. 8 CHAPTER 1: INTRODUCTION .................................................................................................. 12 1.1 Background And Rationale For The Study .......................................................................................................... 13 1.2 Objectives And Scope Of The Study ........................................................................................................................ 14 CHAPTER 2: METHODOLOGY ................................................................................................. 16 2.1 Selected Countries And Cities ................................................................................................................................... 16 2.2 Project Approach And Execution ............................................................................................................................ 17 2.3 Data Collection ................................................................................................................................................................ 21 2.3.1 Secondary data ............................................................................................................................................................ 21 2.3.2 Household survey ........................................................................................................................................................ 21 2.4 Financial Data .................................................................................................................................................................. 24 2.5 Data Analysis ................................................................................................................................................................... 25 2.5.1 Data consolidation ..................................................................................................................................................... 25 2.5.2 Comparative analysis................................................................................................................................................ 25 CHAPTER 3: OPERATIONAL ENVIRONMENT ........................................................................... 27 3.1 Institutional Framework: Africa .............................................................................................................................. 27 3.2 Institutional Framework: Asia ................................................................................................................................. 30 CHAPTER 4: EMPTYING AND TRANSPORTATION BUSINESSES ................................................ 34 4.1 Demand For Emptying Services: Household Survey Results ...................................................................... 34 4.1.1 Sanitation systems ..................................................................................................................................................... 34 4.1.2 User profile .................................................................................................................................................................... 37 4.1.3 On-site Sanitation systems in use ........................................................................................................................ 40 4.2 Supply Of Emptying Services: Operator Survey Results ............................................................................... 44 4.2.1 Manual Emptying Service Provision .................................................................................................................. 46 4.2.2 Mechanical Emptying Service Providers ......................................................................................................... 48 4.3 Market Size For Emptying Services ........................................................................................................................ 51 4.4 Financial Analysis Of FSM Service Provision ..................................................................................................... 56 4.4.1 Profitability versus size of the business ............................................................................................................ 56 4.4.2 Profitability versus Truck Capacity .................................................................................................................... 65 4.4.3 Profitability versus Size of the City ..................................................................................................................... 66 4.5 Conclusion ........................................................................................................................................................................ 67 CHAPTER 5: MECHANISMS SUPPORTING FSM BUSINESSES .................................................... 70 5.1 Finance .............................................................................................................................................................................. 70 5.2 Sourcing of Trucks ....................................................................................................................................................... 76 5.3 Supply Chain ................................................................................................................................................................... 81 5.4 Public Sector Emptying Services ............................................................................................................................ 81 5.5 Treatment And Reuse Of Fecal Sludge ................................................................................................................. 87 5.6 Transfer Stations .......................................................................................................................................................... 92 3 5.7 Conclusion ....................................................................................................................................................................... 94 CHAPTER 6: CONCLUSION AND RECOMMENDATIONS ........................................................... 96 6.1 Market Structure ............................................................................................................................................................ 97 6.2 Market Regulations ....................................................................................................................................................... 99 6.3 Capital Investments ................................................................................................................................................... 100 6.4 Capital Equipment ...................................................................................................................................................... 101 6.5 Capacity Building ........................................................................................................................................................ 103 REFERENCES ........................................................................................................................ 115 APPENDICES Appendix A: African Country Teams 96 Appendix B: Household survey data
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