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The need for more significant borrowing only becomes apparent when there is a comprehensive project or component incorporating technical assistance, operational planning and management, transfer operations, resource recovery, and landfilling.

3.25 Another reason for the low level of borrowing is that past project identification and appraisal missions did not include a municipal solid waste expert or sanitary engineer with MSWM expertise. Thus, project officers usually focussed on other problems or simply provided funds for the procurement of vehicles and equipment. Moreover, MSWM often fell into the cracks between the urban and water and sanitation sectors. Project officers in each sector tended to leave solid waste management to the other sector.

3.26 A third factor accounting for the low level of borrowing is that the borrowers generally do not recognize that MSWM is a major consumer of scarce municipal resources; the true cost of MSWM services may be hidden due to deficient municipal accounting practices and reliance on central government transfers. Thus, the relative importance of achieving greater efficiency in service provision is not properly appreciated. This management information problem, however, is more deeply rooted in overall municipal management capacity, and can only be effectively approached through urban development lending for improvements in land information systems, local tax systems, and municipal budgeting and accounting.

3.27 An additional factor is that local governments do not have easy access to capital. On-lending through national or state financial institutions to local governments can be an important feature of Bank lending to stimulate increased borrowing for comprehensive MSWM projects. The on-lending facilities can be linked to national or state solid waste strategies that include provision of technical assistance to borrowing municipalities. Nonetheless, only five of the projects reviewed (Nigeria, Mexico, Colombia, Argentina, and Brazil) focused on using existing financial intermediaries to support comprehensive MSWM activities.

# Financial Considerations

3.28 In the project documents reviewed, there is a scarcity of information on the present or estimated costs of services, cost recovery arrangements, and economic rates of return. With respect to the available information on service costs, illustrative data are: US$5.20 per capita per year for refuse services in Nigeria, US$2 per capita per year in Calcutta, US$15 per ton in Singapore, and US$24 per ton in Amman. These costs, however, are unrelated to levels of service. In many instances, financial analyses of solid wastes operations could not be carried out due to a lack of accounting data; most municipal accounts do not break out MSWM costs from ot'ler operating expenditures. Without proper cost data, cost efficiency is not a concern for many municipalities, much less a goal to be achieved.

3.29 Cost recovery is another issue that receives little attention in the project reports. Many SARs do not indicate how the recurring costs for MSWM would be recovered. Where this information was provided, the most common approach was to assume that operating costs would be recovered through municipal