metadata: authors: 0: author: Bartone, Carl
1: author: Bernstein, Janis
2: author: Wright, Frederick
docna: 0: docna: Investments in solid waste management :
            opportunities for environmental improvement
docty: Policy Research Working Paper
subtopic: City to City Alliances,Urban Solid Waste Management,Sanitation and Sewerage,Pollution Management & Control,Engineering,National Urban Development Policies & Strategies,Regional Urban Development,Urban Economics,Water and Human Health,Hydrology,Water Supply and Sanitation Economics,Sanitary Environmental Engineering,Small Private Water Supply Providers,Environmental Engineering,Urban Economic Development,Health and Sanitation,Brown Issues and Health,Global Environment,Town Water Supply and Sanitation,Urban Communities
teratopic: Energy
abstracts: cdata!: This paper presents the findings of a
            brief evaluation of World Bank experience in municipal solid
            waste management (MSWM) and recommends approaches to
            improving future Bank performance in this subsector. The
            paper is presented in four chapters. Chapter I describes the
            methodology by which the MSWM investments were reviewed and
            presents definitions and discussion of the benefits of MSWM
            to the environment and urban productivity in developing
            countries. Chapter II presents the overall results relating
            to to the Bank's total lending for solid waste
            management, including the findings of the Regional
            evaluation of MSWM lending. Chapter III examines the
            findings related to the design and implementation of the
            Bank's MSWM components and discusses such issues as the
            size and scope of investments, borrowing levels, cost
            recovery, and private sector participation. Finally, chapter
            IV presents recommendations for improving the design and
            execution of future MSWM projects or components. Annexes to
            the paper include a series of tables containg summary data
            on MSWM components in Bank projects and eight individual
            case studies highlighting specific MSWM projects or
            components in selected countries.
repnme: repnme: Investments in solid waste management :
            opportunities for environmental improvement
display_title: Investments in solid waste
            management : opportunities for environmental improvement
listing_relative_url: /research/1990/04/700293/investments-solid-waste-management-opportunities-environmental-improvement
topicv3: Sanitation m1326453 2000,Water m1326522 137,Solid Waste m1326888 1797,Urban Development m1327371 699,Environment, Natural Resources and Blue
            Economy m1327391 566
publishtoextweb_dt: 2010-07-01T00:00:00Z
historic_topic: Energy
origu: Policy, Research & Ect Affairs
no_of_pages: 96
model_extractions: **Policy, Research, and Extemal Afftilra**

-

# **Urban Deveopment**

- This paper a product of the Urban Development Division, Infrastructure and Urban Development - Department is part of a larger effort in PRE to develop a policy framework for the urban environment. Please contact Sriyani Cumine, room S10-141, extension 33735 (84 pages with tables).

Municipal solid waste management (MSWM) should protect the environment, safeguard health, and improve productivity. In most developing countries, however, solid waste services consume between 20 and 50 percent of operating budgets for municipal services yet are unreliable, do not reach everyone, and do not provide safe disposal.

The World Bank has financed MSWM improvements through freestanding solid waste projects and components in broader projects. But the total costs of solid waste components in 71 projects during FY74-88 was about $532 million, or only 0.3 percent of Bank lending. And component design and performance have been largely disappointing.

The low level of borrowing for the MSWM sector - considering high municipal spending on MSWM - is attributable to the sector's labor-intensiveness (and relatively low foreigr exchange potential); most cities' failure to appreciate the true cost of MSWM services; thc difficulty local governments have getting access to capital; and the failure of many Bank projects to include an MSWM expert.

upgrading institutional arrangements, including private sector delivery of services; the financing of capital inrvestments and recurring costs; pricing for better cost recovery; and environmentally safe disposal (in, .ading proper management of hazardous wastes).

* Components finance plans addressing the full range of solid waste services and related management activities.

* The Bank help establish financial interTnediaries (such as municipal development banks) to support comprehensive MSWM activities, among other urban investments.

* For publicly-provided services, both primary and secondary collection operatiotns **be** supported, with special emphasis on vel,iclc selection and maintenance. For low-income areas, they recommend supporting low-cost community-based technologies.

* Land acquisition - for disposal sites and other facilities - should be a condition of loan effectiveness. So should use or only agreedupon equipment and vehicles.

Early Bank projects provided limited funds to procure collection-related equipment. They had little impact on the quality or efficiency of service delivery. In the past five years, Bank lending for MSWM has increased and broadened - and the potential for its effective expansion is evident.

Bartone, Bernstein, and Wright recommend that: The Bank adopt a comprehensive policy framework for designing solid waste components or projects that focus more attention on

* Expansion of collection capacity be balanced by investments in nonpolluting disposal facilities.

* Appropriate regulations be establishedfew in number, transparent, casily understood. equitable, and economically and physically sensible.

* Costs be recovered through mandatory "benefit taxes" (in residential areas) and variablc user charges (higher for better scrviccs) Ior conmmercial and industrial firms.

**The** PRE Working Paper Scries disseminates thc Findings of work under way in the Bank's Policy, Rcscarch, and E\i.rnal Affairs Complex. An objective of thc scries is to get thcsc findings out quickly, even if pr._sentations arc lcss th.an fLilly polished. The rindings, interpretations, and conclusions in thesc papers do not neccssarily rcprcscnt of'icial Bank policy.

Produced at thc PRE Dissemination Centcr
# **_INVYSTMENTS_** IN SOLID WASTE MANAGEMENT: OPPORTUNITIES FOR ENVIRONMENTAL IMPROVEMENT

# Table of Contents

# Page No.

# EXECUTIVE SUMMARY

|I.|INT|RODUCTION . . . . . . . . . . . . . . . . . .|. . . . . . . . <sup>.</sup><br>1|
|---|---|---|---|
||A.|PurRose and Organization of the Paper . . .|. . . . . . . . .<br>I|
||B.|<br>Met.todclogv..<br>...............|_2_|
||C.|Definitions.<br>. . .................|.<br>_2_|
||D.|<br>Benefits of Municial Solid Waste Management|.<br>. . . . . . .<br>3|
|II.|IBR|D/IDA FINANCING FOR SOLID WASTE MANAGEMENT . .|. . . . . . . . .<br>6|
||A.|Overview of Lendine Program . . . . . . . .|. . . . . . . . .<br>6|
||B.|<br>Regional Lending Programs . . . . . . . . .|. . . . . . . . .<br>7|
|||AFRICA Region . . . . . . . . . . . . . . .|. . . . . . . . .<br>8|
|||ASIA Region . . . . . . . . . . . . . . . .|. . . . . . . . . 10|
|||EMENA Region<br>. . . . . . . . . . I. . . .|. . . . . . . . . 12|
|||LAC Region<br>. . . . . I. . . . . . . . . .|. . . . . . . . . 14|
|III.|MSW|M COMPONENTS IN BANK PROJECTS . . . . . . . .|. . . . . . . . . 17|
||A.|Component Design and Implementation . . . .|. . . . . . . . . 17|
|||Storage and Collection . . . . . . . . . .|. . . . . . . . . 18|
|||Transfer/Transport . . . . . . . . . . . .|. . . . . . . . . 19|
|||Disposal . . . . . . . . . . . . . . . I.|. I. . . . . . . 19|
|||Resource Recovery . . . . . . . . . . . . .|. . . . . . . . . 20|
|||Industrial Waste Management . . . . . . . .|. . . . . . . . . 21|
|||Institutional Strengthening .21||
||B.|Project Issues .23||
|||Size and Scope of Investments . . . . . . .|. . . . . . . . . 23|
|||Level of Borrowing . . . . . . . . . . . . .|. . . . . . . . . 24|
|||Financial Considerations . . . . . . . . . .|. . . . . . . . . 25|
|||Private Sector Participation . . . . . . . .|. . . . . . . . . 26|
|IV. IMPROVING THE DESIGN AND IMPLEMENTATION<br>OF MSWM COMPONENTS . . . . . . . . . . . . . . . . . . . . . . . . 28|
|---|
|A. ComDonent Design . . . . . . . . . . . . . . . . . . . . . . . 28|
|Strategic MSWM Plan .<br>. .<br>. . . . . . . . . . . . . . . . 28|
|Storage and Collecti,n . . . . . . . . . . . . . . . . . . . . 29|
|Street Sweeping . . . . . . . . . . . . . . . . . . . . . . . . 30|
|Transfer . . . . . . . . . .<br>. . . . . . . . . . . . . . . .<br>30|
|Resource Recovery and Disposal . . . . . . . . . . . . . . . . 31|
|Pilot Projects . . . . . . . . . . . . . . . . . . . . . . . . 31|
|Hazardous Waste Management . . . . . . . . . . . . . . . . . . 31|
|Institutional Strengthening . . . . . . . . . . . . . . . . . . 32|
|Public Education . . . . . . . . . . . . . . . . . . . . . . . 33|
|B. Regulatory Framework . . . . . . . . . . . . . . . . . . . . . 33|
|C. Institutional Arrangements . . . . . . . . . . . . . . . . . . 34|
|Large Cities . . . . . . . . . . . . . . . . . . . . . . . . . .34|
|<br>Small and Intermediate<br>Cities. . . . . . . . . . . . . . . . . .36|
|D. Financing. Pricing, and Cost RecovyrX . . . . . . . . . . . . . 37|
|Financing . . . . .<br>.<br>37|
|Pricing and Cost Recovery . . . . . . . . . . . . . . . . . . . 38|
|E. Land Acquisition .<br>. .<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>.<br>. 41|
|F. Phasinz of MSWM Improvements . . . . . . . . . . . . . . . . . 41|
|_G._Research Needs . . . . . . . . . . . . . . . . . . . . . . . . 42|

# TABLES

|Table|1-<br>Lending for MSWM Projects in AFRICA .<br>. . . . . . . . . .|. .<br>9|
|---|---|---|
|Table|2-<br>Lending for MSWM Projects in ASIA . . . . . . . . . . . .|. . 11|
|Table|3-<br>Lending for MSWM Projects in EMENA . . . . . . . . . . . .|. . 13|
|Table|4-<br>Lending for MSWM Projects in LAC<br>. . . . . . . . . . . .|. . 15|
|Table<br>FIGURE|5-<br>Distribution of MSWM Subcomponents by Region . . . . . . . <br>S|. . 17|
|Figur|e 1- MSWM Projects Approved by Fiscal year . . . . . . . . . .|. .<br>7|
|Figure|2- MSWM Component Costs by Fiscal Year . . . . . . . . . . . .|.<br>7|
|Figure|_3_- Number of MSWM Projects by Region . . . . . . . . . . . . .|.<br>8|
|Figure|4- MSW'i<br>Component Costs by Region . . . . . . . . . . . . . . .|.<br>8|
|Figure|5- Cost DistributionofMSWM Components .<br>. . . . . . . . . .|. 24|
|Figure|6- Size OF MSWM Components as Percent of Total Project Costs .|. 24|
# ANNEXS

|AnnexI - Additional Tables<br>. . . . . . . . . . . . . . .|. .|. . . .|. 45|
|---|---|---|---|
|1.1 Lending for Solid Wastes Compared to Urban and To|tal|||
|Lending, FY74-88 . . . . . . . . . . . . . . . .|. .|. . . .|. 46|
|1.2 Solid Waste Management Subcomponents for Project|s in|AFRICA.|47|
|1.3 Solid Waste Management Subcomponents for Project|s in|ASIA<br>.|48|
|1.4 Solid Waste Management Subcomponents for Project|s in|EMENA.|49|
|1.5 Solid Waste Management Subcomponents for Projects|in|'.AC . .|.<br>50|
|1.6 Documentation for Solid Waste Management Project|s in|AFRICA|.<br>51|
|1.7 Documentation for Solid Waste Management Project|s in|ASIA<br>.|52|
|1.8 Documentation for Solid Waste Management Project|s in|EMENA.|53|
|1.9 Documentation for Solid Waste Management Projects|in|_LAC_. .|.<br>54|
|Annex 2 - Antananarivo Water and Sanitation, Madagascar .|. .|. . . .|. 55|
|Annex 3- Lagos Solid Waste and Stormdrainage,<br>Nigeria . .|. .|. . . .|. 58|
|Annex 4- Second Calcutta Urban Development, India . . . .|. .|. . . .|. 64|
|Annex 5- Third Urban Development, Indonesia . . . . . . .|. .|. . . .|. 67|
|Annex 6- First Urban Development, Egypt . . . . . . . . .|. .|. . . .|. 72|
|Annex 7- Lahore Urban Development,Pakistan<br>_..._<br>_._<br>_._<br>_._<br>_._<br>_._<br>|_._<br>_._|_._<br>_._<br>_._|_._<br>75|
|Annex 8- Recife Metropolitan Region Development, Brazil .|. .|. . . .|. 78|
|Annex 9- Solid Waste Management Pilot Project, Mexico . .|. .|. . . .|. 81|

BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Carl Bartone is the Senior Environmental Specialist with the Urban Development Division, Infrastructure and Urban Development Departwent of the World Bank. Janis Bemstein is a Consultant with the Urban Development Division. Frederick Wright, currently in EMNVP, was an Economist with the Water and Sanitation Division of this Department.

The authors are indebted to a number of persons who contributed to the preparation of this paper. Mr. Riaz Khan asaembled and reviewed the various project docunents, prepared the corresponding data sheets, and prepared an initial summary. Mr. Steven Maber did the data processing, set up a data base for the project data sheets, and prepared the tables and graphs for this report. Mr. Jonathan Stevens prepared the final versions. Mr. Nadim Khouri reviewed several versions of this paper, and veriried the statistic i presented. The review and comments of Messrs. Per Ljung, Esm Bennathan, Mike Gam, Arturo Israel, Mike Cohen, Louis Pouliquen, William Dillinger, and _Jeff_ Gutman are **also** greatly appreciated. Finally, the authors want to thank George Gattoni, Cario Rietveld, Amir Al-Khafaji, Albert Peltekian, Guillermo Yepes, and Tim Campbell for organizing Regionai meetings to review an earlier draft of the paper. For their valuable contributions to the case studies, the authors also want to thank Gerard Tenaille. George Gattoni. Heinz Unger, Braz Menezes, David Jackson, Roy Ramani, and Ned Echeverria.
# INVESTMENTS IN SOLID WASTE MANAGEMENT: OPPORTUNITIES FOR ENVIRONMENTAL IMPROVEMENT

# EXECUTIVE SUMMARY

i. A review of 7'. projects witLi municipal solid waste management (MSWM) components revealed that the World Bank has supported diverse efforts to improve urban solid waste services in member countries. At one extreme, the Bank financed projects that provide limited funds to support procurement of collection-related equipment with little impact on the quality or efficiency of service provision. In Nigeria, Singapore, and Mexico, by contrast. the Bank invested in well-designed, comprehensive MSWM components covering technological and institutional improvements in solid waste collectie,n. transfer, and disposal. The latter investments ranged between US$47.5 million anI US$111.8 million. In some cases, small but well-focused MSWM component7s covering institutional improvements and equipment procurement have been fol'.owed up by larger subsector investments in subsequent projects.

ii. The total cost of the solid waste components in the 71 Bank projects is estimated to be US$532.0 mIllion, or 7.8 percent of total project costs; the average MSWM component cost is about US$8.1 million. Further, the majority of projects with solid waste components are either urban development (75 percent) or water and sanitati-n (13 percent) projects. In recent years, Bank lending for MSWM activities nas increased as the subsector matures in a number of countries. In the few projects for which MSWM component ERRs have been calculated, substantial returns have been reported.

iii. Effective design of MSWM components appears to be related in dart to the amount of time and effort government personnel, Bank staff, and consultants allocaLe to the collection of baseline data and the preparation of specific project proposals. Moreover, when a sanitary or municipal engineer or other technical specialist with experience in refuse management has been involved in the identification and/or appraisal missions, the resulting project designs have tended to provide detailed proposals for meeting solid waste management needs within the broader urban objectives in the project cities. Nonetheless, most of the projects reviewed have small MSWM components for the procurement of collection equipment; only half of the projects provide facilities necessary for environmentally safe disposal and about a third of the projects include technical assistance for strengthening or reorganizing the local institutions responsible for MSWM. The effectiveness of such limited components in achieving urban and environmental management objectives is questionable.

iv. The low level of borrowing for the MSWM sector relative to the magnitude of municipal expenditure for solid waste management can be attributed to several factors. First, solid waste collaction operations tend to be labor intensive, and as viewed in several past components, have relatively low foreign exchange potential. A related factor is that the borrowers gener-.lly 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
- ~.ii -

achieving greater efficiency in seivice provision is not properly appreciated. An additional factor is that local governments do not have easy<sup>access to</sup> capital. Lastly, past project identification and appraisal missions did not always include e municipal solid waste expert or sanitary engineer with MSWM expertise. Thus, projects focussed on other problems or simply provided funds for the procurement of vehicles and equipment.

v. Based on a limited review of implementation, many of th .;SWM components can be viewed as missed opportunities. Due largely to inadequacies in component design (e.g., lack of or insufficient attention to btiilding institutional capacity, lack of strategic planning, failure to provide for safe disposal facilities), the execution of the components encountered extensive delays and failed to achieve long-term improvement in solid waste management in terms of both efficiency and environmental protection. Specific implementation problems included unclear institutional structure and responsioilities, insufficient technical and managerial expertise, inappropriate vehicle specifications, complicated procurement procedures, failure to maintain vehicles in operating condition, inadequate cost recovery, and difficulties in selecting and acquiring sites for transfer stations and disposal facilities.

vi. To broaden the scope of future investments, the Bank should adopt a comprehensive policy framework for designing solid waste cromponents that takes into account all physical, technical, legal, institutional, financial, environmental, and sociocultural aspects of MSWM in a metropolitan area. To expect significant lotig-term improvzement in solid waste management, the f liowing recommendations should be considered in the design of MSWM components.

- (a) Strategic Solid Waste Plans. The components should finance the development of strategic solid wa.ste management plans addressing the full range of solid waste services and related management activities. For large cities, the plan should focus on tr,e requirements of the municipality and the surrounding metropolitan area; a national plan is more appropriate for small and intermediate cities.

- (b) Collection. The MSWM components should support improvements in primary as well as secondary collection operations with vehicle selections based on analyses of solid waste, labor, and other local conditions. Special emphasis should be placed on setting up vehicle maintenance garages, training staff, and ensuring availability of spare parts. To provide greater coverage for low-income areas as well as to maximize the sustainability of improved MSWM systems, the solid waste component should support the use or development of lowcost community-based technologies. To achieve efficiency in collection operations, it is essential to match vehicle type and size with local conditions. Due to the complexities of vehicle specifications and procurement, project designers should insist on loan conditions that require only agreed upon equipment to be purchased.

- (c) Transfer. Resource Recovery, and Disposal. All investments in expanding collection capacity must be accompanied by correspondirg investments in non-polluting disposal facilities. In most developing
- iii -

country cities, the most appropriate disposal facilities will continue to be sanitary landfills, and where a market for compost cAn ra demonstrated, composting plants. Where incineration and/or resource recovery is planned, facilities for safe disposal of rejects and ash are still needed. Where haul distances are greater than 15 to 20 kilometers or travel times exceed 30 minutes, transfer stations should be considered.

- (d) Hazardous Waste Management. To maximize the benefits of a MSWM component, attention should be directed at instituting and improving environmental controls and monitoring to keep hazardous wastes otlit of the municipal system. If industrial wastes are collected by the municipality, all potential sources of hazardous waste should be identified and targeted for appropriate management. Although laws controlling these wastes are enacted at the national or state level, the municipality should play a key role in monitoring inunicipal disposal sites for hazardous wastes, monitoring the generation of industrial and hazardous waste in urban areas, identifying suitable hazardous waste sites, and carrying out periodic inspections of industrial and hazardous waste collection and disposal operations. Particular attention attention should be given to small-scale manufacturing and cottage industries.

- (e) Regulatory Framework. In planning MSWM improvements, efforts should be directed at establishing appropriate solid waste-related lass, ordina;aces, regulations, and corresponding inspection and enforcement responsibilities and procedures at the national, state, and local levels. Effective enforcement of national environmental controls will require national and local authority capacity to monitor compliance and apply enforcement procedures, procedural ease in implementing regulations, nd broad public acceptance. Moreover, regulations should be few i. Aumber, transparent, unambiguous, easily understood, equitable, and considered to have significant positive physical and economic effects.

- (f) Institutional Arrangements. To improve the execution of MSWM engineering components, considerable attention is needed in the area of institutional development. In large cities, solid waste institutions need to be upgraded within the overall administrative hierarchy. The responsibility for collecting waste and delivering it to a disposal facility can remain with the municipalities or private companies. Based otl available data, private firms can be more productive and efficient in carrying out collection and transport operations than municipalities. In planning MSWM improvements, project designers should evaluate the potential for introducing or expanding private sector involvement through a variety of contractual arrangements. To achieve maximum environmental protection and economies of scale, it may be possible to establish a regional or metropolitan autllority responsible for solid waste disposal. In small and intermediate cities, a national solid waste authority should conduct MSWM planning, develop standards, and provide technical and financial assistance. What,.ver institutional
-i,v -

arrangements are establi.shed, project designers need to ensure that there is a clear organizational structure, an ongoing strategic plar,ning function, and effective budgeting, cost accounting, and management information systems that include monitoring of collection performance.

- (g) Financing. Pricing, and Cost Recoverv. In planning MSWM compone.': more emphasis should be placed on questions of financing, pricing, and cost recovery. Tc finance capital investments, municipal governments have three principal options: loans from existing financial intermediaries, special loan or grant programs through the central government, and municipal sinking fuxtds. To finance the substantial recurring costs of MSWM, municipalities can obtain funds from local taxes, intergovernmental transfers, and user charges. Although local conditions will determine the means by which the costs of MSWM should be recovered, project desi&iiers should attempt to recover the maximum amount of collection costs through user charges, which include benefit taxes (mandatory solid waste charges) and voluntary fees. Since industrial and commercial enterprises view solid waste as a private good and have much variation in the level of service required, chey can be charged voluntary vatiable fees to cover the full cost of providing the desired level of seivine. By contrast, municipalities will normally charge benefit taxes to residential beneficiaries to recover all or a portion of t.leir solid waste collection costs. Costs for disposal operations may be recovered largely through local taxes as well as intergovernmental transfers or grants based on broader environmental objectives. In addition to these financial considerations, the Bank should promote the use of financial intermediaries to increase the level of borrowing for this subsector. To expect any significant gains in MSWM, however, solid waste components should accompany broader urban management investments that focus on improving municipal finance, accounting, and budgetary control.

- (h) Land Acquisition. Project officers should ensure that there are environmentally safe sites for new solid waste facilities and that these sites will be available for the timely execution of the MSWM improvements. Accordingly, project designers should insist on making land acquisition a condition of loan effectiveness.

- (i) Phasing of MSWM Improvements. MSWM investments siiould be phased to reflect the objectives and constrai ts of each project city. In most sitnations, the first phase of Bank lending should finance the development of a strategic solid waste management plan and the execution of key institutional improvements. The second phase of investment would provide financing for collection equipmer.n; transfer, recycling, and disposal facilities; and other progran. elements such as pilot projects, public education, and further institutional strengthening. Subsequent phases of Bank lending would include support for stra-egic facilities, expansion of solid waste senvices to other areas, _nd the implementation of new MSWM programs.
vii. Based on the analysis of World Bank experience in MSWM, further research is recommended on: (i) the relative magnitude of damages and benefits versus the cost of providing solid waste services to better estimate the economic rate of return for MSWM components as well as to facilitate the ranking of MSWM in cumparison to that of other urban investments; (ii) various pricing strategies, separable demand, and intra-urban cross-subsidies to improve cost recovery; (iii) private sector delivery of solid waste services to determine how and under what circumstances the private role in the solid waste sub-sector can be expanded; (iv) the role of APEX institutions in MSWM to improve solid waste service delivery in large, intermediate, and small cities; and (v) strateg.c planning approaches to improve the full range of solid waste services and related management activities in large, intermediate, and small cities.
### **INVESTMENTS IN SOLID WASTE MANAGEMENT:** OPPORTUNI$IES FOR ErVIRONMENTAL IMPROVEMENT

# I. 1INRODUCTION

1.01 Managing solid wastes is & najor challenge for cities in the developing world. In the face of rapid urbanization and industrial growth, effeccive municipal solid waste management (MSWM) has a critical role in protecting the environment and improving urban productivity. In most developing country cities, however, MSWM is a costly service that consumes between 20 and 50 percent of available operational budgets for municipal services, yet serves no more than 70 percent of the urban inhabitants. Moreover, unsafe solid waste collection and disposal practices in these cities threaten public health as well as surface and ground water resources. To expand or improve solid waste services in urban areas, the World Baiik has financed MSWM improvements as part of its overall lending operations 1!i many countries. In response to the Bank's increasing emphasis on integrating environmental concerns into the Bank's lending and policy dialogues, a study was conducted to evaluate the nature and performance of these investments. The resulting paper is one of a series of papers that will form part of the Bank's efforts to develop a policy framework for the urban environment.

## A. Pur2ose and Organization of the Paper

1.02 The purpose of this paper is to presenit the findings of a brief evaluation of World Bank experience in MSWM and to recommend approaches to improving future Bank performance in this subsector. The review covered freestanding solid waste projects as well as components of broader urban development, pollution control, and water supply and sewerage or sanitation projects approved during the period FY74-88. The findings reveal the extent of Bank lending for domestic and industrial solid waste management and provide information on the design, implementation, and other aspects of MSWM components in Bank projects.

1.03 The paper is presented in four chapters. The remainder of Chapter I describes the methodology by which the MSWM investments were reviewed and presents definitions and brief discussion of the benefits of MSWM to the environment and urban productivity in developing countries. Chapter II presents the overall results relating to the Bank's total lending for solid waste management, including the findings of the Regional evaluation of MSWM lending. Chapter III examines the findings related to the design and implementation of the Bank's MSWM components and discusses such issues as the size and scope of investments, borrowing leve' cost recovery, and private sector participation. Lastly, Chapter IV presenus recommendations for improving the design and execution of future MSWM projects or components. Annexes to this paper include a series of tables containing summary data on MSWM components in Bank projects and eight individual case studies highlighting specific MSWM projects or components iii selected countries.
-2-

# B. Methodol2y

1.04 Based on an initial screening of all urban, pollution control, and water supply and sanitation lending activities for the period FY74-88, a subset of 71 soliJ waste components was identified for analysis. The study was limited to a review of the principal project operational documents: Staff Appraisal Reports (SARs), President's Reports, Project Completion Reports (PCRs), Project Performance Audit Reports (PPARs), and Sector Reports. (The documents reviewed are listed by Region in Tables 1.6 to 1.9 in Annex 1). Upon reviewing these documents, a summary data sheet was prepared for each project containing: information on the design of MSWM components, including sector, institutional, technical (if available) and financial information; a description of the MSWM component by sub-component; and cost distribution by sub-component. Key project information was later entered into an automated data base for storage and future analyses.

1.05 From the diverse set of projects reviewed, eight were selected for further analysis of the MSWM component design, implementation status, and if completed, performance. The projects were chosen on the basis of both the level of investment and the degree of emphasis placed on solid waste management. To provide adaquate representation of the breath and scope of Bank-wide MSWM operations, two projects w,.:re included from each of the four Bank Regions. For these eight projects, the analysis involved interviews with project officers and reviews of project supervision reports as well as the other principal project documents mentioned above. (Detailed descriptions of these projects are presented in the annexes to this report.)

1.06 Due to a number of methodological limitations, this paper does not provide a complete assessment of the extent and impact of the Bank's involvement in MSWM. First, the project documents for a number of projects include only one or two lines on the type of service provided, often accompanied by unclear cost data. In a number of appraisal and project completion reports, costs for MSWM could not be disaggregated from the overall costs of municipal services technical 'ssistance, or institutional strengthening components covering solid waste management as well as other urban servioes. Moreover, reviews of supervision reports and interviews with project officers were undertaken only for the analysis of the eight projects included in the annexes. For various reasons, however, cerrain project officers and principal consultants who have the most knowledge about certain components could not be reached for interviews. Thus, some of the data in this report may not be completely accurate and a small number of projects that might contain limiter `;WM components may not be included. Nonetheless, these possible omissions **dLe** unlikely to affect the conclusions and recommendations of this paper,

# C. Definitions

1.07 Municipal solid waste can be defined as the wastes arising from domestic, commercial, industrial, and institutional activities in urban areas. The wastes can be solid, semi-solid, and e;en liquid; generally, thiey include all those materials that are neither wastewater discharges nor air emissions. Although waste characteristics vary by country and even by city in some
countries, urban refuse in developing countries includes largely vegetable and putresc' 'e matter as well as varying amounts of paper, metals, plastics, and inert matter such as coal ash or sand. Unlike municipal refuse in developed countries, however, municipal waste streams in developing countries may also contain significant amounts of human faecal matter and to various extents, industrial, commercial, and medical wastes, a portion of which may be hazardous.

1.08 Municipal solid waste services encompass refuse storage and collection, street and drain cleaning, solid waste transfer and transport, disposal, and resource recovery. Other MSWM activities include vehicle maintenance and repair, financial managament, administrative activities (e.g., routing, scheduling, r6nordkeeping), staff management and development, and strategic MSWM planning. Generally, these activities fall %ithin the jurisdiction of the municipality; the private sector often manages some domestic refuse and the wastes from largescale industries, hospitals, and large office complexes. In most developing countries, however, the responsibilities for refuse collection, disposal, and vehicle maintenance are assigned co the lower levels of municipal government or health departments staffed by dnqualified managers and unskilled workers. Moreover, the widespread absence of strategic planning and use of inappropriate technology have led to serious inefficiencies in expenditure and effort. Consequently, solid waste services in most developing country cities are unreliable, lack universal coverage, and fail to provide a safe method of disposal. Furthermore, the abundance of improperly disposed waste constrains urban productivity and poses significant threats to public health and the environment.

# D. Benefits of Municipal Solid Waste Management

1.09 The impacts of providing effective MSWM services are largely associated with the reduction or elimination of health risks, environmental degradation, and impediments to urban productivity. Although accurate measures of these benefits are not currer.Lly available, the following paragraphs highlight some of the most important benefits of investing in MSWM improvements.

1.10 Improvement in Adult Health and Reduction in Child Mortality. In developing country cities, ineffective MSWM systems cause health risks largely from direct and indirect contact with waste containing human faecal matter. Children, refuse collection vorkers, and scavengers are directly exposed to excreta-related pathogens and intestinal parasites when they handle faecally contaminated refuse. Children are particularly vulnerable; excreta-related diseases are responsible for one quarter to one half of the deaths of children under the age or five.!' Important indirect health effects result from the breeding of flies, rats, and othcr disease vectors at dump sites and open garbage heaps and drains. Additional risks to public health are associated with exposure to toxic substances or hazardous materials that may enter the municipal waste stream.

- 1/ Sandra J. Cointreau, "Solid Waste Management in Developing Countries," in Proceedings "Resource Mobilization fot Drinking Vater and Sanitation in Developing Nations," Management Division of the American Society for Civil Engineers, San Juan, Puerto Rico, May 26-29, 1987, p. 546.
-4-

1.11 Improvement in Water Quality. Uncontrolled disposal of urban waste into water bodies, open dumps, and poorly designed landfills is a principal<sup>cause</sup> of surface and ground water contamination. In many developing country cities, where local authorities lack adequate controls o-er solid waste disposal, toxic industrial or other hazardous wastes can enter the municipal<sup>waste stream.</sup> Consequently, leachate from open dumps or uncontrolled landfills can cause largescale, long-.erm pollution of essential surface and ground water resources,<sup>many</sup> of which are used for drinking or other economically important activities.

1.12 Improvement in Air Ouality. Air pollution occurs largely<sup>through</sup> inefficient local open air burning of wastes, incineration in plants<sup>that lack</sup> effective treatment facilities for gaseous emissions, and through<sup>spontaneous</sup> combustion of refuse at dumps. Spontaneous combustion occurs<sup>when methane gas,</sup> generated by the anaerobic decomposition of organic waste materials, is ignited; fires can spread underground and continue to burn for years.<sup>Landfill gas also</sup> constitutes a serious explosion hazard for workers and nearby residents. Other causes of air pollution are the decomposition of urban waste, involving<sup>the</sup> vaporization and emission of chemical constituents into the atmosphere,<sup>and the</sup> dispersion of air-borne particulates from open collection points and solid waste transport or transfer activities.

1.13 Increased Urban Productivity. The impacts of inadequate MSWM systems on urban productivity are not well understood, but the signs are evident throughout a city. For example, high rates of worker illness<sup>and absenteeism</sup> are due to poor hygienic conditions and the proliferation of disease-carrying pests at open dumps. Moreover, poorly located and illegal dumps consume valuable land that could be better used for other purposes. These unsightly<sup>facilities</sup> also lower the value of land in the surrounding area. Refuse<sup>thrown into the</sup> drainage system blocks the flow of water which eventually causes flooding<sup>and</sup> consequent traffic blockages, road deterioration, and property<sup>damage. In</sup> addition, piles of uncollected garbage and fallen waste storage bins<sup>on city</sup> streets exacerbate already congested traffic conditions and impede necessary road improvements until the solid waste problem is resolved.

1.14 Economic Development. In some instances, the lack of adequate public or private solid waste services may inhibit industrial development. For<sup>example,</sup> small manufacturing firms may be forced to locate in alternative<sup>locations due</sup> to the prohibitive costs of supplying their own garbage<sup>trucks and haulers.</sup> Large firms, by contrast, may be able to absorb these expenditures, but will suffer losses due to increased production costs. In the absence of<sup>effective</sup> controls over industrial wastes, further costs may be imposed<sup>on the public and</sup> the natural environment due to the harmful effects of improperly<sup>disposed</sup> hazardous materials.

1.15 Given the health and environmental impacts of MSWM systems on urban populations as well as its effects on municipal finance, the World<sup>Bank has</sup> financed MSWM improvements as part of its lending for urban,<sup>water and</sup> sanitation, tourism, and pollution control projects. In most of these projects, the components are included to improve and safeguard public<sup>health; protect</sup> environmental quality; expand access to an acceptable level of service; introduce or increase resource recovery; and build an institutional framework that can
5administer and perform acceptable waste management practices, carry out continuous planning, and generate sufficient revenues to meet investment and recurring costs. In some cases, solid waste components were included to support the objectives of other investments. For example, refuse collection will facilitate the cleaning and maintenance of stormwater drainage. MSWM components also were included in the urban upgrading components designed to encourage lowincome populations to improve their living conditions through the prov'ision of low-cost loans and basic infrastructure.

1.16 The remainder of this paper examines World Bank experience with solid waste components and recommends ways to improve performance in this subsector. The paper focuses largely on domestic wastes since most of the Bank's MSWM investments have not dealt with industrial or hazardous wastes. Moreover, hazardous waste management is complex and requires special management programs.
-6-

# II. IBRD/IDA FINANCING FOR SOLID WASTE MANAGEMENT

2.01 In reviewing past World Bank project lending for MSWM, the lack of uniformity in Bank documents (i.e., imprecise definitions and quantification methods and the absence of a systematic approach) made it difficult<sup>to undertake</sup> rigorous evaluation, Nonetheless, the review of ongoing and completed projects provided an indication of the Bank's overall involvement, achievements, and shortcomings in alleviating MSWM problems in large and medium-sized<sup>cities in</sup> many developing countries.

# A. Overview of Lending Program

2.02 The FY74-88 lending program for projects with a solid waste management component includes 71 projects with a net commitment in loans and credits of US$3,166.2 million. The appraisal estimate of the projects' total costs reaches US$6,798.1 million. The total cost of the solid waste components is<sup>estimated</sup> to be US$532.0 million, or 7.8 percent of total project costs. The foreign exchange portion of solid waste component costs, as presented<sup>in various</sup> appraisal reports, has ranged from 18 percent to as high as 73 percent. Typically, all of the foreign exchange was allocated to equipment and technical assistance. Several projects also received additional financing from<sup>other</sup> lending sources.

2.03 Among the projects identif ed as having addressed MSWM, there were two free-standing solid waste projects and a large MSWM component within another project which together accounted for US$209.3 million or 40 percent<sup>of all Bank</sup> solid waste lending. These were the Lagos Solid Waste Management and StormdrainaLe Project in Nigeria (US$111.8 million), the Solid Waste Management Pilot Project in Mexico (US$50.0 million), and the Environmental Control Project in Singapore (US$47.5 million). Another 68 projects had solid waste investments ranging from less than 1 percent to nearly 45 percent of total<sup>project costs.</sup> The average solid waste operation cost US$8.1 million, but the median<sup>was only</sup> US$3.5 million. Excluding the three large MSWM projects, the average MSWM component cost dropped to US$5.1 million.

2.04 The majority of projects with MSWM components were either urban development or water and sanitation projects, with 53 projects (75 percent) being uroan development projects involving solid waste investments of<sup>over US$278.0</sup> million. Water and sanitation projects accounted for 9 projects (13 percent) supporting solid waste activities. Two tourism projects, two drainage<sup>projects,</sup> three reconstruction projects, and two pollution control projects<sup>also have</sup> included solid waste components. About 53 percent of the projects can be classified as poverty-oriented, specifically aimed at improving services to lowincome urban groups.

2.05 The Bank's first substantial involvement in solid waste operations was in the context of the First Calcutta Urban Development Project approved<sup>in August</sup> 1973. Since then, from one to eight projects with a MSWM component have been approved annually. Figure 1 shows the number of projects approved<sup>by fiscal</sup>
year in the period FY74-88. As presented in Figure 2, lending amounts for MSWM components are highly variable.

<!-- Start of picture text --> Figure 1. MSWM Projects Approved Figure 2. MSWM Component Costs<br>by Fiscal Year by Fl6cal Year<br>Number of Prolects Cost (Milliln 0]<br>10-~~~~~~~~~~~~~~~~~~~~~~0<br>74 75 70 71 73 79 00 It 02 IS 84 IS II 87 I 74 75 76. 17 77 71 80 U 32 03 1. . 5 SI .. .S<br>Flct I Yea Fiscal Year<br><!-- End of picture text --> 2.06 During the period FY74-88, there were no clear trends in MSWM lending. For the five-year period FY84-88, however, lending increased significantly over the previous two five-year periods, totalling US$291.2 million (55 percent) of all MSWM project costs (unadjusted for inflation). This is due primarily to the approval in FY86 of the two largest MSWM investments ever financed by the Bank in Nigeria and Mexico.

2.07 In terms of Bank lending for the urban -ector during the study period, the solid waste subsector amounts to 3 2 percent of total lending for urban development (including urban transportation prior to FY88) and water supply and sewerage projects. Compared to the water and sanitation subsector only, it represents 6.4 percent of that subsector's lending. Similarly, it represents 6.6 percent of the lending for urban eevelopment projects during FY74-88. Overall, solid waste operations accounted for only 0.3 percent of total IBRD/IDA lending for the period. In three of those years, however, MSWM lending ranged from 0.6 percent to 1.1 percent of the total. Bank lending, year-by-year, is summarized in Table 1.1 of Annex 1.

2.08 In recent years, the Bank has made various seed investments in MSWMrelated technical assistance and subsector planning efforts in several countries. Thus, there appears to be significant potential for more large free-standing MSWM projects or sizeable MSWM components in urban projects to be included in the lending pipeline. At the time of this writing, large solid waste components were being planned in Nigeria, Indonesia, and Brazil.

# B. Regional Lending Prozrams

2.09 The four Bank Regions have executed a total of 71 projects with modest to large investments for MSWM. The distribution of these projects by Region is shown in Figure 3; the Regional distribution of MSWM component costs is presented in Figure 4. As indicated, the lending program is not characterized by any
discernible pattern. Further, given the share of urban population in each Region, the projects are more uniformly distributed than might be expected. Although EMENA appears to have invested considerably less in the subsector than the other three Regions, the data is somewhat distorted by the fact that each of the other Regions has one large solid waste project or component. Excluding those three investments, the average cost (US$4.2 million) of MSWM components in EMENA projects is similar to the Bank-wide average of US$5.1 million. The Bank's MSWM investments in each Region are described below.

<!-- Start of picture text --> Figure 3, Number of MSWM Projects<br>Dy Region<br>ASk 2 j jFRICA ig<br>30%<br>\ w 2<br>- / EU E MNA 13<br>LA5<br>25%<br>Total Number of Projects 71<br><!-- End of picture text --> <!-- Start of picture text --> Figure 4. MSWM Component Costs<br>by Region (mS)<br>ASIA 151 A I1C 13 5.B<br>_ NA 54<br>L AC 190.3<br>36%<br>Total MSWM Component Costs mS 532<br><!-- End of picture text -->

# AFRICA Region

2.10 Solid waste management was first introduced in the AFRICA lending program in FY75 as a small component of the Lusaka Sites and Service Project. The MSWM component accounted for US$300,000 out of a total project investment of US$41.3 million. To date, the Region has approved 19 projects with MSWM components in 16 countries, involving net loan commitments of US$135.8 million (see Table 1).

2.11 The most striking feature of the solid waste program in AFRICA is the overwhelming share of Nigeria in both the number and size of operations. Currently, Nigeria is executing the largest solid waste component financed by the Bank, the Lagos Solid Waste Management and Stormdrainage Project (described in detail in Annex 3), and is the only country in the Region to undertake more than one project with a MSWM component, having four in total. While other countries in the Region have concentrated their efforts in the larger capital cities, solid waste projects in Nigeria have also addressed the needs of mediumsized cities in several states.

2.12 The project in Lagos State represents over 89 percent of Bank commitments in the subsector for AFRICA. Excluding this project, the average cost of MSWM components drops from US$9.5 million to US$1.6 million per project; the average share of MSWM components falls from 21.3 percent to only 4.2 percent of total. proj.ect costs.
9

## TABLE I

# Lending for MSWM Projects in AFRICA. FY74-88

|||LOAN<br>ANOUNT|TOTAL<br>PROJECT<br> <br>COST|<br>MSWM<br>COMPONENT<br> <br>COST|<br>MSWM AS<br>PERCENT<br>OF TOTAL<br>PROJECT||STATUS AS|
|---|---|---|---|---|---|---|---|
|COUNTRY|PROJECT TITLE||**(USS**MILL|ION)|<br>COST|<br>FY|<br> <br>OF 6/30/89|
|Benin|Cotonou Water/Sanitary<br>Eng Project|5.0|6.3|0.7|10 9%|81|COMPLETED|
|B. Faso|Urban Development Project|(8.2)*|(10.8)*|<br>NA|NA|78|COMPLETED|
|Burundi|Urban Development Project|15.0|16.7|0.4|2.2%|80|COMPLETED|
|Djibouti|Urban Development Project|5.0|15.2|1.0|6.8%|85|ONGOING|
|Gambia|Urban Management/Development<br>Project|<br>(11.5)*|(12.4)*|<br>NA|NA|84|ONGOING|
|Guinea|Conakry Urban Development Project|15.2|16.4|3.3|20.1%|84|<br>ONGOING|
|Ivory Coas|t Second Urban DeveLopment Project|(51.0)*|(104.0)*|<br>NA|NA|82|COMPLETED|
|Kenya|Site and Service Project|(16.0)*|(29.4)*|<br>NA|NA|75|COMPLETED|
|Lesotho|Urban DeveLopment Project|6.0|7.1|0.1|1.4%|80|COMPLETED|
|Liberia|Monrovia Urban Development Project|10.0|13.4|0.6|4.7%|82|COMPLETED|
|Madagascar|Antananarivo<br>Water and San Project|20.5|33.7|3.5|10.4%|80|COMPLETED|
|Mali|Mali Urban Developmert Project|12.0|15.3|1.4|9.2%|79|COMPLETED|
|Mauritius|Urb.n Rehab&Stormdrainage Project|15.0|24.5|0.7|2.7%|81|COMPLETED|
|Nigeria|Urban Development Project|17.8|36.6|0.03|0.1%|80|COMPLETED|
|Nigeria|Anambra Water/Sanitation<br>Report|67.0|120.0|5.4|4.5%|82|ONGGING|
|Nigeria|Lagos Swm and Stormdraii.age<br>Projett|72.0|164.3|111.8|68.0%|86|ONGOING|
|Nigeria|Infrastructure<br>Development Fund|69.5|96.8|3.8|3.9%|88|ONGOING|
|Uganda|Water Suppty & Sanitation Rehab|28.0|30.8|2.8|9.1%|85|ONGOING|
|Zambia|Lusaka Squatter Upgrade/Site<br>Service|<br>20.0<br>......|41.3<br>......|0.3<br>--<br>--|0.7%<br>......|75|COMPLETED|
||TOTAL FOR AFRICA REGION:<br>AVERAGE PER PROJECT:|378.0<br>~~<br>25.2|638.4<br>~~~~~~~<br>..<br>--<br>--<br>42.6|135.8<br>~..**.**.<br>..<br>...<br>.<br>9.1|.......<br>21.4%|||

NOTE: * Loan and Project Cost quoted but not included in the totals due to non-availabitity of SWM data.
- 10 -

2.13 The other MSWM activities in the AFRICA Region can<sup>be grouped into two</sup> categories. One group consists of modest components<sup>with varying levels of</sup> preparation and investment. These components<sup>generally include two or more solid</sup> waste sub-components that combine procurement<sup>of trucks and cquipment with</sup> institutional strengthening measures. They typically entail efforts to<sup>improve</sup> collection services in the project cities,<sup>often in low-income areas, and some</sup> combination of training, studies, and other technical services.<sup>The second group</sup> of projects include very small solid waste components<sup>as one-shot efforts to</sup> tackle critical storage and collection service<sup>deficiencies in the country's</sup> capital or largest cities.

# ASIA Rezion

2.14 Having approved 21 projects with MSWM components<sup>between FY74 and FY88,</sup> the ASIA Region has emerged as the most frequent<sup>financier of solid waste</sup> services in the Bank, with total loan commitments<sup>of US$151.9 million.</sup> Nonetheless, these solid waste components are largely<sup>confined to only seven</sup> countries, as shown in Table 2. Among them, India<sup>and Indonesia lead the Pegion</sup> with eight and four projects, respectively. Singapore<sup>is the beneficiary of the</sup> largest solid waste investment in the Region (US$47.5<sup>million). In addition,</sup> the Bank financed three solid waste components<sup>in the Philippines and two</sup> projects with MSWM components in Sri Lanka.

2.15 Approved in FY74, the First Calcutta Urban Development<sup>Proiect was the</sup> first project in the Bank to include a solid waste<sup>component. This project also</sup> marked the beginning of the Bank's long involvement<sup>supporting solid waste</sup> management in India. MSWM has been a significant<sup>component of the eight projects</sup> in India, by far the largest number of MSWM-related<sup>projects for any single</sup> country supported by the Bank. Individual component<sup>costs have ranged between</sup> US$1.3 million and US$15.0 million. The total lending<sup>for MSWM in India during</sup> FY74-88 is US$45.6 million.

2.16 The greatest share of resources has been used<sup>for meeting the solid</sup> waste needs of India's large metropolitan areas.<sup>In Calcutta, three successive</sup> urban development projects have placed increasing<sup>attention to MSWM. The Second</sup> Calcutta Urban Development Project included US$11.6<sup>million to support solid</sup> waste collection, development of improved methods<sup>and facilities for waste</sup> disposal, pilot projects, training, and studies.<sup>(See Annex 4 for further</sup> details.) The solid waste component of the latest<sup>project, however, is</sup> considered the most successful by the Country<sup>Department. Three other large-</sup> city urban projects also have contained solid<sup>waste components: the Secon</sup> Madras Urban Development Project, the Kanpur Urban Development<sup>Project, and the</sup> Bombay Urban Development Proiect. In addition,<sup>two projects have attempted to</sup> address state-wide solid waste needs through subsectoral<sup>investments in several</sup> medium-sized cities in Madhya Pradesh and Uttar<sup>Pradesh. The Uttar Pradesh</sup> Urban Development Proiect is the largest and most<sup>recent solid waste project</sup> underway in India. Approved in April 1987, the<sup>project is a follow-up to earlier</sup> solid waste investments in the State.
TABLE 2

# Lending for MSWM Projects in ASIA. FY74-88

|COUNTRY|PRCJECT TITLE|LOAN<br>AMOUN|TOTAL<br>PROJECT<br>T<br>COST<br>(USS MILLI|<br>MSIM<br>COMPONE<br> <br>COST<br>ON)|<br>MSW1 AS<br>NT PERCEN<br>OF TOTAL<br>PROJEC<br>COST|T<br> <br>T<br> <br>FY|STATUS AS<br>OF 6/30/89|
|---|---|---|---|---|---|---|---|
|Bangladesh|Urban Developnent Project|47.6|65.6|9.2|14.02|88|ONGOING|
|India|Calcutta<br>Urban Development Project|35.0|59.2|2.4|4.0X|74|COMPLETED|
|India|Second Calcutta<br>Urban Dev Project|87.0|164.4|7.3|4.4X|78|COMPLETED|
|India|Second Madras Urban Dev Project|42.0|87.9|2.7|3.1X|81|COMPLETED|
|India|Kanpur Urban Development Project|25.0|51.7|1.3|2.5X|82|COMPLETED|
|India|Third Calcutta<br>Urban Dev Project|147.0|303.1|15.0|4.9X|83|ONGOING|
|India|Madhya Pradesh Urban Dev Project|24.1|50.1|4.5|9.0X|83|ONGOING|
|India|BombayUrban Development Project|138.0|256.7|2.S|1.1%|85|ONGOING|
|India|Uttar<br>Pradesh UrbanDevProject|130.0|237.8|9.5|4.0%|87|ONGOING|
|Indonesia|Jakarta<br>& Urban Development Project|24.2|52.3|0.3|0.6%|75|COMPLETED|
|Indonesia|Third Urban Development Project|43.6|96.0|20.4|21.32|79|COMPLETED|
|Indonesia|Fourth Urban Development Project|43.0|85.9|1.5|1.8%|81|COMPLETED|
|Indonesia|Fifth<br>Urban Development Project|39.3|64.3|5.7|8.9%|84|ONGOING|
|Philippines|Third Urban Development Project|72.0|120.0|5.0|4.2%|80|COMPLETED|
|Philippines|Regional Cities<br>Development Project|67.0|114.6|5.5|4.8%|83|ONGOING|
|Philippines|Municipal<br>Development Project|40.0|68.8|1.3|1.92|84|ONGOING|
|Singapore|Envirornmental Control<br>Project|25.0|47.5|47.5|100.02|75|COMPLETED|
|Sri Lanka|lqcondWater Supply & Sewerage Project|30.0|94.0|**3.3**|3.5%|80|COMPLETED|
|Sri Lanka|Municipal<br>Management Project|13.0|20.4|1.8|8.8%|86|ONGOING|
|Sri Lanka|Emergency Reconstruction<br>& Rehab. Proj.|78.0|111.4|2.0|1.82|88|ONGOING|
|Thailand|Regional Cities<br>Development Project|27.5<br>......|50.9<br>....<br>..|2.7<br>--<br>--|5.32<br>. .<br>....|85|ONGOING|
||TOTALS FOR ASIA REGION:|1178.2|2202.6|151.9||||
||AVERAGE PER PROJECT:|56.1|104.9|7.2|6.9X|||
- 12

2.17 In Indonesia, there have been four projects that contain a range<sup>of</sup> MSWM components. For example, the Jakarta Urban Development Project<sup>allocated</sup> US$320,000 for the procurement of refuse collection vehicles.<sup>By contrast, the</sup> Third Urban Development Proiect included US$20.4 million for large-scale MSWM improvements (see Annex 5). Currently, a national MSWM plan is being prepared.

2.18 Within a span of five years (1980-84), the Bank financed three solid waste projects in the Philippines, each having about US$5.0<sup>million for</sup> comprehensive MSWM activities. All three projects have directed between 35 and 55 percent of MSWM component costs toward improving services to the urban<sup>poor.</sup> 2.19 Singapore, Thailand, and Bangladesh have each undertaken<sup>one MSWM</sup> project. Approved in June 1975, the Singapore Environmental Control Project was the Bank's first free-standing MEWM project. It provided for the collection, incineration, and disposal of solid wastes in Singapore's urban areas<sup>as part</sup> of a long-term program to improve sanitary standards. The project's<sup>main</sup> physical component was the construction of an incineration plant with energy recovery capability. To date, this plant is the only municipal solid waste incinerator financed by the Bank. In Thailand, the Regional Cities<sup>Development</sup> P.roiect allocated US$2.7 million to increase solid waste collection coverage and to provide landfill disposal sites in three cities. The investment<sup>in MSWM</sup> included collection, disposal, and maintenance equipment as well as technical assistance to improve systems management and operations. More recently,<sup>the</sup> Banzladesh Urban Development Project provided US$9.2 million to finance institutional strengthening; improvements in solid waste collection and disposal, including landfill operations; and a pilot program involving the sale<sup>of solid</sup> waste to landowners for private landfilling.

# EMENA Region

2.20 Eight countries in the EMENA Region have carried out 13 projects with MSWM components for a total cost of US$54.0 million (see Table 3).<sup>The trend</sup> over time has been towards increased involvement in solid waste activities through the Region's urban and water and sanitation projects. The share of MSWM activities in total project investments ranges from less than 1 percent<sup>in the</sup> Greater Cairo Urban Development Project and the Jordan Tourism<sup>Project to over</sup> 35 percent in the Eevit 11rban Development Proiect. The latter project, along with the Lahore Urban Development Proiect in Pakistan, constitute the most extensive Regional efforts in the subsector, and are included for<sup>further</sup> analysis in the annexes to this report. In 1925, a free-standing solid<sup>waste</sup> project in Egypt was appraised (US$57.2 million) but has not been<sup>negotiated.</sup> As of 1987, seven solid waste projects have closed in the Region.

2.21 The Egvpt Urban DeveloRment Project marked a turning point<sup>in the</sup> Region's solid waste lending (see Annex 6). It was the first in a<sup>series of</sup> projects in several countries approved between FY78 and FY83 that included significant MSWM investments. Approved in FY79, the Second Tunisia Urban Development Project included a solid waste collection and disposal component at an estimated cost of US$3.5 million. The component was designed to provide<sup>low-</sup> cost solutions to refuse collection and disposal problems in Greater<sup>Tunis.</sup>
- 13

TABLE 3

# Lending for MSWM Projects in EMENA. FY74-88

|COUNTRY|PROJECT TITLE|LOAN<br>AMOUNT|TOTAL<br>PROJECT<br> <br>COST<br>(USS MILLI|<br>M1SW<br>COMPONE<br> <br>COST<br>ON)|M MSWM AS<br>NT PERCEN<br>OF TOTA<br>PROJEC<br>COST|T<br>L<br>T<br> <br>FY|STATUS AS<br> <br>OF 6/30/89|
|---|---|---|---|---|---|---|---|
|Afghanist|an Kabul Water/Sanitation<br>Project|9.0|11.7|0.2|2.0%|75|COMPLETED|
|Egypt|Urban Development Project|14.0|22.4|**_7.9_**|35.1%|78|COMPLETED|
|Egypt|Greater Cairo Urban Dev Project|59.0|116.2|0.6|0.5%|82|ONGOING|
|Jordan|Tourism Prciect|6.0|19.4|0.1|0.3%|76|COMPLETED|
|Jordan|Anean Transp&Municipal Dev Project|<br>30.0|65.6|9.2|14.0%|84|ONGOING|
|Lebanon|Reconstruction Project|50.0|83.6|3.0|3.6%|78|COMPLETED|
|Morocco|Rabat Urban DeveLopment Project|18.0|25.6|1.2|4.7%|78|COMPLETED|
|Morocco|Second Urban Development Project|36.0|81.0|3.1|3.8%|81|COMPLETED|
|Pakistan|<br>Lahore Urban Development Project|16.0|24.0|4.7|19.6%|83|ONGOING|
|Pakistan|<br>Karachi Special Development ProJect|70.0|148.6|8.9|6.0%|86|ONGOING|
|Tunisia|Second Urban Development Project|19.0|39.4|3.5|8.9%|79|COMPLETED|
|Turkey|Cukurova Region Urban Eng Project|9.2|10.7|0.2|1.6%|85|ONGOING|
|Turkey|Cukurova Urban Development Project|120.0|467.4|11.5|2.5%|87|ONGOING|
||TOTALS FOR EMENA REGION:|456.2|1115.7|54.0||||
||AVERAGE PER PROJECT:|35.1|85.8|4.2|4.8%|||
- 14

2.22 Earlier project experience under the Jordan Tourism Project, although of limited scale, provided the basis for a significant follow-up solid waste investment. The solid waste component of Jordan's Amman Transport and Municipal Development Project, with an estimated cost of US$9.2 million (14 percent of total project cost), aimed at strengthening services in Amman through investments in collection and disposal equipment and in the development of sound financial and institutional arrangements. Component activities include civil works for four new sanitary landfills, the establishment of a Solid Waste Management Department within the Amman Municipality, implementation of cost recovery mechanisms, and a study of means to improve the productivity of solid waste collection.

2.23 Two solid waste projects each in Pakistan and Turkey account for the remaining subsector investments in the Region. The US$4.7 million solid waste component of the Lahore Urban Development Proiect is discussed in Annex 7.

2.24 EMENA is the only Region to carry out a major study of the subsector (EMENA Urban Solid Waste Management: Development of Strategies, Green Cover Report No. 4875, June, 1984). The report analyzes previous and ongoing project experience, examines key issues in the Region, and lays out a set of recommended strategies for both the Bank and borrowers. The study provides a good basis for expanding MSWM activities in the Region, and could well be emulated in other Regions.

# LAC Region

2.25 Although the LAC Region's first project containing a MSWM component (Baja California Tourism Project, Mexico) was not approved until FY77, subsequent project activities have accounted for the largest share of Bank-wide lending for MSWM (overall 36 percent of total investments). Eighteen projects in eight countries have included MSWM investments ranging from less than 1 percent up to 100 percent of total project costs (see Table 4).

2.26 Several projects in the LAC Region have featured large investments in the subsector. Three projects have each involved MSWM investments of over US$30.0 million, and almost half of the projects in the Region have allocated at least 10 percent of their total project costs to solid waste operations. BrazJ1 and Mexico have received the largest share of LAC's investments in MSWM. Together, they account for half of the solid waste-related projects executed by the Region. Between FY77 and FY86, Mexico has undertaken four solid waste projects, the latest being the ongoing Mexico Solid Waste Management Pilot Project which is national is scope. Aimed at developing investment plans for 26 intermediate cities and establishing a financial intermediary for solid waste lending to municipalities, the project has a total cost of US$50.0 million (see Annex 9). A large follow-up investment is expected to result from this pilot effort.
15 **-**

## TABLE 4

# Lending for MSWM Proiects in LAC. FY74-88

|COUNTRY|PROJECT TITLE|LOAN<br>AMCUNT|TOTAL<br> <br>PROJECT<br> <br>COST<br>**(USS**MILLI|<br>MSWM<br>COMPONE<br>__<br>COST<br>ON)|<br>NSWI AS<br>NT PERCEN<br> OF TOTA<br>PROJEC<br>COST|T<br>L<br>T<br> <br>FY|STATUS AS<br> <br>OF 6/30/89|
|---|---|---|---|---|---|---|---|
|Argentioa|Municipal<br>Development Project|120.0|240.0|23.6|9.8%|88|ONGOING|
|Bahamas|Urban DevelopmentProject|5.8|24.4|1.5|6.2%|82|COMPLETED|
|Bolivia|La Paz Municipal Develooment Project|15.0|21.3|2.2|10.3%|88|ONGOING|
|BoLivia|Urban Development Project|17.0|22.5|0.1|0.1%|78|COMPLETED|
|BraziL|Mediun-Sized Cities Project|70.0|200.0|30.0|15.0%|79|COMPLETED|
|Brazil|Metropolitan Development Program|8.9|24.9|1.4|5.6%|83|COMPLETED|
|Brazil|Water Munic.& Low-income Areas Project|80.0|190.7|2.8|1.';%|88|ONGOING|
|Brazil|Recife Metropolitan Dev Project|123.9|347.8|38.5|11.1%|_82_|ONGOING|
|Brazil|Rio Flood Reconstruction<br>Project|175.0|393.6|6.7|1.7%|88|ONGOING|
|Colombia|Barranquilla<br>Water Supply Project|24.0|37.2|4.0|10.8%|86|ONGOING|
|Colombia|Water and Sewerage Sector Project|150.0|435.0|5.0|1.1%|88|ONGOING|
|Dom. Repub|. Sites and Services Project|25.4|41.7|0.6|1.4%|82|CANCELLED|
|Dom. Repub|. Santo Domingo Tech Assistance Project|<br>7.1|17.5|7.6|43.4%|83|COMPLETED|
|Mexico|Second Urban & Regional Dev Project|164.0|468.0|4.4|0.9%|81|ONGOING|
|Mexico|Solio Waste Management Pilot<br>Project|25.0|50.G|50.0|100.0%|86|ONGOING|
|Mexico|Pollution Control Project|60.0|190.9|2.5|1.3X|82|ONGOING|
|Mexico|Baja California Tourism Project|(42.0)*|(122.2)*|<br>NA|NA|77|COMPLETED|
|Peru|Lima Metropolitan<br>Development Project|82.5<br>...<br>......|135.9<br>......|9.4<br>-----.<br>.|6.9%<br>..<br>.<br>-.-.|84|SUSPENDED|
||TOTALS FOR LAC REGION:|1153.6|2841.4|190.3||||
||AVERAGE PER PROJECT:|......<br>64.1|--<br>-<br>-<br>157.9|-<br>--..<br>11.2|.<br>7.1%|||

NOTE: * Loan and Project Cost quoted but not included in the totals due to non-avaiLability of SWM data.
# - 16 -

2.27 Three of the five urban projects executed in Brazil between<sup>FY78 and</sup> FY83 have included significant investments for solid waste activities. The Bragil Medium-Sized Cities Proiect includei US$30.0 million (15 percent<sup>of total project</sup> cost) to upgrade municipal refuse collection services<sup>and to expand these</sup> services to poor, unserved areas. The Recife Metropolitan<sup>Region DeveloRment</sup> Project, discussed in Annex 8, includes a US$38.5<sup>million solid waste :omponent</sup> to meet subsector needs. Approved in FY88, both the Rio<sup>Flood Reostruction</sup> lko.2ct and the Water Project for MuniciDalities and Low-Income<sup>Arers contain</sup> significantly smaller MSWM components.

2.28 Bolivia, the Dominican Republic, and Colombia have each executed<sup>two</sup> solid waste projects. In Bolivia and the Dominic2n Republic,<sup>small investments</sup> for MSWM in initial urban projects were followed-up by comprehensive<sup>solid waste</sup> components in a second project. In Colombia, however, a US$4.0 million component to upgrade collection services in the City of Baranquilla<sup>preceded a similar</sup> level of investment (US$5.0 million) co carry out studies<sup>and establish a line</sup> of credit for MSWM improvements in about ten cities. Finally, Argenitina, the Bahamas, and Peru have each executed a single project with modest<sup>to large solid</sup> waste components that range between 6 and 11 percent of total project<sup>costs.</sup> The latter project supports the development of a solid waste<sup>parastatal for</sup> Metropolitan Lima as well as a comprehensive approach to solid waste<sup>management</sup> for the city (although Bank disbursements for the project<sup>'nave</sup> been suspended, it continues with GTZ cofinancing).
- 17 -

# III. MSWM COMPONENTS IN BANK PROJECTS

3.01 World Bank investments in MSWM range from small components to finance the procurement of collection vehicles and equipment to free-standing comprehensive solid waste projects covering technical and institutional improvements in all aspects of solid waste management in large cities or groups of secondary cities. Most projects, however, include two ur three of the usual "engineering" subcomponents: (i) storage and collection, (ii) transport/transfer, (iii) disposal, and (iv) resource recovery. More than half of the projects also contain a technical assistance or institutional development subcomponent to improve the operations and/or institutional capabilities of local municipal authorities. Some of the more comprehensive components incorporated pilot projects to test improved methodologies prior to full-scale implementation. Finally, about half of the projects have included a specific subcomponent aimed at resolving solid waste collection problems in low-income neighborhoods. Table 5 presents a global summary of the occurrence of these subcomponents in Bank projects; Tables 1.2 to 1.5 in Annex 1 provide a further breakdown by Region. The remainder of this chapter discusses the broad range of MSWM investments in terms of component design and impler-'ntation and other key project issues.

TABLE 5 Distribution of **MSWM** Subcomvonents **by** Region

||||||SUBCO|MPONE|NTS||TOTAL|AVERAGE No.|
|---|---|---|---|---|---|---|---|---|---|---|
|REGION|NUMBER<br>PROJEC|OF<br>TECH<br>TS<br>ASST|INST<br>STRN|SYST<br>/OPS<br>IMPV|<br>STOR<br>CLCT|TSPT<br>TRSF|LAND<br>FILL|PRCS<br>RSRC<br>RCVY|LOW-<br>No. OF<br>INCM<br>SUBCOM_<br>FCUS<br>PONENTS|OF SUBCOM-<br> <br>PONENTS PER<br> <br>PROJECT|
|AFRICA|19|<br>11|<br>6|**5**|**18**|**3**|**5**|1|7<br>56|2.9|
|**ASIA**|21|11|<br>**5**|**6**|17|**7**|**8**|**6**|**9**<br>**69**|**3.3**|
|**EMENA**|**13**|<br>**9**|**5**|**5**|**10**|4|**6**|**5**|**6**<br>**50**|**3.8**|
|**LAC**|**18**|<br>**9**<br>|7|**7**|**13**|4|10|4|10<br>**64**|**3.6**|
|||**--- ~~..**<br>**...**|....<br>**....**|.<br>**---**|**--**|**---**|**--**|**---**|**---**<br>.<br>**....**|**...**|
|**TOTALS**|**71**|**40**|**23**|**23**|**58**|**18**|**29**|**16**|**32**<br>**239**|**3.4**|
|**KEY: TECH**|**ASST**|=**Technical**|**Assist**|**ance**|||**TSPT**|**TRSF**|=**Transport/Tra**|**nsfer**|
|**INST**|**STRN**|=**Institut**|**ionaL**<br>**St**|**rengt**|**henin**|**g**|**LAND**|**FILL**|=**Landfill Oper**|**ations**|
|**SYS**<br>**STO**|**T/OPSIMP**<br>**R CLCT**|**Va Systems/O**<br>=Storage/C|**peratio**<br>ollectio|**ns Imp**<br>n|**rovem**|**ents**|**PRCS**<br>LOW|**RESC R**<br>-INCH<br>F|**CVY**=Processing/Reso<br>CUS = Low-income Fo|urce<br>Recovery<br>cus|

A. Compor.cnt Design and Implementation 3.02 The MSWM components in most Bank projects have not been systematically designed and have a limited focus. The majority of the components supported the purchase of collection and transport equipment; only about half of these components provided facilities necessary for environmentally
# - 18 -

safe disposal. Moreover, many of the components failed to include sufficient attention to the broader institutional and financial requirements for effective solid waste management. Conse1uently, many of the MSWM components can be viewed as missed opportunities. A limited review of project experience revealed that the deficiencies in design resulted in extensive delays and failure to achieve significant long-term improvement in solid waste management. The following sections describe in more detail the nature of the Bank's investments in solid waste storage and collection, transfer and transport, disposal, resource recovery, industrial waste management, and institutional strengthening.

# Storage and Collection

3.03 The most frequent feature of the Bank's MSWM investments is the provision of collection vehicles; 66 out of the 71 projects have collectionrelated components. Bank support for collection services has ranged from a onetime injection cf funds for vehicles (e.g., Kenya, Gambia, Sri Lanka, Afghanistan, Lesotho) to comprehensive efforts addressing city-wide refuse collection needs (e.g., India, Indonesia, Egypt, Nigeria, Brazil, Mexico). Thirty-six projects are aimed at improving primary collection services for lowincome groups in project cities. In these areas, collection techniques typically include both traditional methods (using human or animal-powered carts) as well as motorized vehicles. In several Bank projects in India, Indonesia, Egypt, and the Philippines, handcarts are being used as the principal mode of house-tohouse refuse collectiox. within low-income neighborhoods.

3.04 The means by which primary collection in low-income areas are linked to the overall secondary collection network vary, but often is accomplished by establishing neighborhood bins or transfer points (i.e., mini-transfer stations) in contrast to conventional transfer stations discussed in the following section. Here, as in many other MSWM issues, there is no universal policy regarding institutional responsibilities. In the planning of the Third Urban Proiect in Indonesia, for example, household collection responsibilities were expected to be shifted from local neighborhood organizations to the central municipal authorities. By contrast, the recommended MSWM scheme in the Egvot Urban Development Project was to encourage private refuse collectors and<sup>assign a</sup> limited role to the municipality in door-to-door collection. Both projects are considered in greater detail in Annexes 5 and 6, respectively.

3.05 To maximize efficiency in collection operations, it is essential to match truck type and size with local conditions. Given the predominance of truck procurement in the projects analyzed, however, there was disturbingly little attention given to questions of truck selection criteria or vehicle specifications in the project appraisal reports. Consequently, the process<sup>of</sup> selecting the most appropriate solid waste technology presented a significant constraint to the implementation of a number of MSWM components. In the Thir Urban Proiect in Indonesia, for example, difficulties on the part of Jakarta's Cleansing Department in determining the appropriate technology for solid waste transport posed costly delays in Jakarta. Although a Bank consultant had recommended an appropriate technical approach during project preparation,<sup>the</sup> local institution, upon project execution, experimented with more highly mechanized equipment (e.g., balers, compactors). After testing these
- 19 -

technologies, the local agency discovered that they were indeed inappropriate (i.e. , the high moisture content .f the waste made the compactors inoperable and scavengers undermined the effectiveness of the balers) and subsequently accepted the original Bank recommendations.

3.06 In the execution of other MSWM components, the complexities of equipment and vehicle specification and procurement caused further delays. Under the Lagos project, internal and external controversy over vehicle specifications and the design and award of a US$40.0 million procurement package delayed the acquisition of garbage trucks by almost four years. In other projects, failure to include spare parts in the initial package meant that the project-financed vehicles, during later stages of implementation, would have to remain idle for considerable periods of time while the municipality procured replacement parts. Further, many of the Bank-financed trucks that eventually broke down often remained out of commission due to the lack of adequate facilities and skills for maintenance and repair. In Calcutta, vehicles financed under one loan had to be replaced by new vehicles funded under a subsequent loan five years later.

# Transfer/Transport

3.07 Waste collected by conventional trucks from individual dwellings or community transfer points may be hauled either directly to the disposal site or to a transfer station. In large, crowded cities such as Calcutta, Manila, Jakarta, Cairo, Lahore, and Karachi, the transfer of solid waste is emerging as an important issue in Bank projects. Overall, transfer stations or depots have been incorporated into the design of 18 solid waste components. They were generally included because of the distance and travel time constraints on solid waste collection. In large, spread-out cities, the distance between collection areas and the disposal site is often greater than the economical range of collection trucks. In crowded cities, where distance may not be excessive, road congestion on main arteries may also tie up many collection trucks for too long a time when the fir.t priority of these vehicles is to remove refuse within collection areas as efficiently as possible. In these situations, the projects included transfer stations to optimize the use of collection equipment. In one case where cost savings were calculated (Lima), the economic rate of return for transfer operations was 156 percent.

## DisDosal

3.08 Open dumping remains the prevalent form of disposal practiced in developing countries, and was identified as a serious environmental problem in numerous project cities. Further, it is generally recognized that efforts to increase collection efficiency without consideration of appropriate disposal facilities tend to aggravate the disposal problem as well as ensuing environmental problems. Nonetheless, investments in disposal (i.e., landfills) are only included in about half of the Bank's MSWM projects, indicating a low priority for disposal operations on the part of municipal governments. The AFRICA and EMENA Regions have six projects each with disposal subcomponents; these are generally concentrated in the larger cities (e.g., Amman, Cairo, Lagos, Lahore, Karachi). The LAC Region has made extensive efforts to address disposal issues in 11 of its 18 Regional projects, the majority in Brazil and Mexico.
- 20 -

In the Asia Region, disposal services have accompanied collection operations in nine projects, primarily those in India, Indonesia, and the Philippines.

3.09 In the course of implementation, difficulties surrounding the selection and acquisition of land for landfills as well as transfer stations were a major cause of delay. The problems encompassed lack of institutional capacity to identify environmentally acceptable sites, resistance from surrounding residential areas, delays in obtaining legal land rights, and lack of vacant land. In Calcutta, difficulties in locating and acquiring land for solid waste transfer depots reduced the component's construction program from 80 to 28 ward depots. In Nigeria, the process of identifying, conducting environmental investigations, surveying, and obtaining certificates of occupancy for transfer station and sanitary landfill sites posed lengthy delays in the implementation of the Lagos project. Although some of the land acquisition problems experienced in these and other MSWM components impede Bank projects in almost all sectors, the complexities of identifying, evaluating, and acquiring environmentally suitable sites that will be tolerated by adjacent neighborhoods compounded the land problem for MSWM.

# Resource Recovery

3.10 Resource recovery options can be employed to (i) reduce refuse volume in cities that lack adequate disposal or landfill space, and (ii) utilize resources in the refuse (reusable material, energy value) wher. it is economically and environmentally feasible. In Singapore, the scarcity of land for disposal sites was recognized as a particularly urgent problem. Consequently, the Singapore Environmental Control Project financed the construction of an incineration plant capable of receiving and incinerating 1,200 tons of refuse per day to generate a net of 7.0 MW of electricity currently being sold. Scrap recovery at the plant also was included, but it only achieved about one-third of the expected amounts, due largely to the lower-than-expected scrap content in the refuse. On average, however, the sale of electricity and scrap reduces the disposal cost per ton by 25 percent.

3.11 Besides the Singapore project, 17 other projects include provisions for resource recovery. In most of these projects, such as the ones in Mexico, Brazil, India, Tunisia, Madagascar, Lebanon, Egypt, and the Philippines, the resource recovery subcomponents involve the establishment or improvement of composting facilities. One project in Mexico includes resources for the construction of a materials recovery and recycling facility. The Bangladesh project includes land reclamation through the filling of low-lying lands. Another project in Recife, Brazil provided financing for two sanitary landfills equipped with facilities for recovering landfill gas for use in adjacent industries. Due to political reasons, however, these facilities were never built (see Annex 8).

3.12 With respect to the implementation of Bank-financed composting facilities, deficient institutional and technical capacities posed significant constraints to effective facility management and operations. As illustrated by the implementation of the composting plant financed under the Antananarivo Water and Sanitation Project, lack of local expertise in compost marketing, sales, and
- 21 -

quality control undermined the financial and agricultural benefits of resource recovery. In Egypt, by contrast, the composting plant in Alexandria, financed under the First Urban Development Proiect, was effectively managed by an agronomic engineer with assistance from a technical expert who ensured that the plant was efficiently operated and the compost properly marketed, tested, and sold. Currently, the plant is producing compost of regular consistency, with high organic content, suitable for soii conditioning. It also is recovering substantial quantities of metals, plastics, leather, paper, and textiles that are sold and recycled. Notwithstanding this experience, most composting operations are better carried out by the private sector or linked to agricultural agencies.

3.13 Apart from project lending, the Bank also is executing a UNDPfinanced global research and demonstration project on waste management and resource recovery. The project is evaluating many resource reco%ery and recycling technologies and promoting the incorporation of promising options in future investment projects.

# Industrial Waste Management

3.14 Unsafe handling and disposal of industrial waste is a growing problem for developing countries. Nonetheless, only four of the projects reviewed addressed the management of industrial or hazardous solid wastes. Each project allocated relatively little attention to this problem. In the Lagos Solid Waste and Stormdrainage Project, for example, the solid waste component includes equipment and vehicles for upgrading industrial waste collection; the SAR provides no data on their costs and very little information on how this service will be upgraded. The incineration plant financed by the Singapore Environmental Control Proiect was designed to incinerate a certain amount of waste oil and other suitable industrial solid wastes of high calorific value in addition to domestic waste. Although the municipal government normally is not responsible for the collection and disposal of industrial waste, local agencies have expanded their operations to include these wastes in order to recover additional revenues. Lastly, two projects in Mexico include financing for industrial waste management. The Mexico Pollution Control Project allocates US$2.5 million for studies related to industrial solid waste control. The studies encompass a comprehensive study for characterization and quantification of chemical and hazardous industrial wastes as well as feasibility studies for industrial waste treatment plants and disposal sites. As part of the project's other components, which provides loans to industrial enterprises for undertaking air or water pollution control, *'.e project includes support for a limited number of industrial solid waste -isposal investments. To support the development of industrial waste confinement sites in three Mexican cities, the Mexico Solid Waste Management Pilot Project finances studies and assistance for preparation works, monitoring, evaluation, documentation, and training. This project also includes the development of an industrial waste information system.

# Institutional Strengthening

3.15 In most developing country cities, the solid waste service is the largest employer of municipal labor and transport and spends the largest portion
- 22 -

of the city's revenues for operations, yet few cities<sup>have a qualified senior</sup> officer employed exclusively in solid waste management operations.<sup>Further, MSWM</sup> institutions in most developing countries are fragmented<sup>and have little or no</sup> capacity in sanitary engineering and municipal waste management.<sup>Despite these</sup> conditions, however, only about one third of the projects reviewed<sup>addressed the</sup> need to strengthen or reorganize the local institutions<sup>responsible for solid</sup> waste services. In these projects, MSWM or technical<sup>assistance components</sup> provided for studies, expert assistance, and training<sup>of municipal staff. A few</sup> projects dealt with creating or strengthening a metropolitan<sup>area solid waste</sup> agency (e.g., Amman, Lagos, La Paz, Lima, Monterrey). With<sup>regard to component</sup> implementation in most cities, both intermediate and large, MSWM responsibilities were delegated to a multi-service municipal department.<sup>In three cases, they</sup> were delegated to health or sanitation departments. Only<sup>seven components</sup> incorporated specific solid waste or urban cleansing<sup>departments.</sup> 3.16 Inadequate attention to institutional issues in the design<sup>of solid</sup> waste components resulted in poor component performance. Moreover,<sup>deficient</sup> institutional organization and capacity was cited as the<sup>principal impediment</sup> to effective MSWM component execution. For example, insufficient and unskilled staff, inadequate project management, and unclear organizational structure and responsibilities undermined the execution of MSWM improvements in the Lazos Solid Waste and Stormdrainaze Project. In this project, a three-year<sup>delay in</sup> preparing and formally adopting a management organization<sup>and staffing plan</sup> posed a significant constraint to executing long-term solid waste<sup>improvements.</sup> Although the delay was due primarily to the fact that<sup>four different governors</sup> exerted their influence on the plan in the course of<sup>project preparation,</sup> appraisal, and execution, the continuing uncertainties<sup>regarding organization,</sup> management, staffing, and trairing severely impeded<sup>critical planning and</sup> coordination tasks associated with the project.

3.17 In a number of projects, insufficient technical<sup>and managerial</sup> expertise impeded the introduction of more advanced levels<sup>of technology and</sup> service. During the implementation of the Third Urban Project in Calcutta, for example, the Calcutta Municipal Corporation changed<sup>its methods of solid waste</sup> management more frequently than could be readily<sup>absorbed by the solid waste</sup> workers; the project did not provide adequate training to complement<sup>the changes</sup> in technology. As discussed earlier, weak institutional capacity also undermined the efficiency of Bank-financed composting facilities.

3.18 With respect to institutional development, there were some notable accomplishments in the projects reviewed. Under<sup>the Mexico Solid Waste</sup> Management Proiect, for example, the Monterrey subloan<sup>supported the development</sup> of a state level public company responsible for the disposal<sup>of the solid wastes</sup> of eight municipalities within the Monterrey<sup>metropolitan area in the State of</sup> Nuevo Leon. Controlled by a Board of Directors,<sup>the company (SIMEPRODE) will</sup> operate four transfer stations, a fleet of 24<sup>transfer trailers, and a sanitary</sup> landfill. Collection remains the responsibility of each municipality, but the company provides technical assistance. Operations<sup>are expected to start in</sup> September 1989.
- 23 -

3.19 In Asia, urban projects in Indonesia and India triggered additional institutional improvements. As a result of the Third Urban Project in Indonesia, the city of Surabaya established a separate Cleansing Department within the municipality, thus increasing the status and subsequent resources assigned to solid waste management. In Calcutta, implementation of the second urban project resulted in the reorganiz ion of the solid waste structure within the municipality, designation of a qualified senior engineer to direct solid waste operations, and establishment of a hierarchy of positions and responsibilities. The project also supported the improvement of employee working conditions and the design of a management system for operations and maintenance, Despite these accomplishments, however, one project officer noted that the failure to sustain local commitment to solid waste management was an important factor inhibiting long-term improvement. Solid waste institutions have remained weak and local governments have continued to assign higher priority to other urban expenditures.

# B. Proiect Issues

3.20 To complement the evaluation of component design and implementation, the review of World Bank MSWM investments focused on the size and scope of the solid waste investments, level of borrowing, financial considerations, and private sector participation in municipal solid waste services. The following sections consider key findings related to these issues and highlight pertinent questions raised in the course of reviewing MSWM projects and components.

# Size and ScoRe of Investments

3.21 Notwithstanding sume of the large, focused MSWM projects or components, the majority of components had very limited scope to provide vehicles and equipment to municipal departments. Little attention was given to specific improvements in the MSWM subsector. Furthermore, this approach raises serious questions about the usefulness of vehicle procurement as the main project subsector objective when rudimentary maintenance capacity is generally lacking. For Bank lending to have real impact on subsector performance, the project design must incorporate a broader, more comprehensive approach as illustrated by projects in Nigeria, Indonesia, and Mexico (See Annexes 3, 5 and 9).

3.22 Based on an analysis of MSWM component size, many of the projects - appear to have included solid wastes as an afterthought even though MSWM is a major budget item for cities. One fifth of the components had a component cost of less than US$1.0 million, and represented less than two percent of the respective total project cost. Moreover, this group of components was included largely for procuring collection equipment. The median value of the MSWM components was US$3.4 million; the median share was 4.5 percent of total project costs. By contrast, about one third of the projects had sizeable solid waste components costing in excess of US$5.0 million and accounting for more than 10 percent of project costs. The cost and size distribution of 66 projects for which MSWM component cost data were available is shown in Figures 5 and 6.
- 24 .

<!-- Start of picture text --> Filure 5. Cost Distribution of MSWM<br>Components, FY74-88 (S millions)<br>Number of Projects<br>29<br>[D 11.1.1....,.I.......<br>in . . . . . . . .. .... ........ .. .. ...<br>tIA 1.0.2.5 2.6.5.9 5.0.10.0 $5.25 25.50 '50<br>MSWM Component Cost Interval (S milIloni<br><!-- End of picture text --> <!-- Start of picture text --> Figure 6. Size of MSWM Components<br>as % of Total Project Cost, FY74-38<br>Number ol Projects<br>~~~~~~~~~~~~~~~~~~~~23<br>2.5 2.5-5 5.7.5 1.S.lS id-is 15-25 25-50 450<br>MSWM Component Size Interval ()<br><!-- End of picture text --> 3.23 In addition to the relatively low level of investment in MSWM, the Bank has carried out very few sector studies on solid waste management. In 1982, the Bank published Environmental Management of Urban Solid Wastes in Developing Countries: A Project Guide by Sandra Cointreau (World Bank Urban Development Technical Paper Number 5). The document provides information and procedures for planning and implementing solid waste management improvements but is not known to a surprising number of project officers questioned. In searching through the Bank's information systems, only two Regional sector studies were found that dealt with solid wastes. The EMENA Urban Solid Waste Management: Development of Strategies report, prepared in 1984, provides an in-depth review of regional lending and proposes a number of strategies to expand and improve program and project development. A 1982 LAC Water SupplV and Wastes Sector Strategy PaRer devotes a brief section to MSWM, indicating the growing importance of this subsector in the Region. The paper emphasizes the need to strengthen Bank and country capacity for dealing with this urban problem and identifies proposed activitius in Brazil, Colombia, and Mexico. Also in LAC, country water and wastes sector studies for Brazil (1983) and Columbia (1986) include substantial analyses and discussions of the solid waste subsector. A LAC sector study to be initiated in FY89 will devote more attention to this topic. Given the potential growth of lending in this subsector, as reflected in experiences in Nigeria, Brazil, Mexico, Egypt, Pakistan, India, and Indonesia, the development of Regional strategies, as carried out in EMENA, is recommended.

# Level of Borrowing

3.24 The discussion of MSWM issues to this point raises another important question: why the relatively low borrowing for the subsector? Several explanations can be suggested. First, solid waste collection operations tend to be labor intensive, and as viewed in several of the past small loan components, have a relatively low foreign exchange cost, primarily for vehicles.
- 25 -

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
# - 26 -

or property taxes. Transfers from central government<sup>were planned in several</sup> cases. In 17 projects, a refuse fee or tax<sup>was established, sometimes as a</sup> surcharge on property taxes or on other utility<sup>bills. Since solid waste service</sup> charges in Lima (based on property values) financed<sup>only about 27 percent of the</sup> estimated service cost, the Lima project called<sup>for a gradual shift from solid</sup> waste charges based on property values to a surcharge<sup>on electricity. In the</sup> case of Merida, householders were expected to pay<sup>a weekly collection fee</sup> directly to private or municipal haulers. Only one SAR<sup>mentions the collection</sup> of tipping fees as a source of revenue for disposal<sup>operations. The SARs of</sup> three projects describe cross subsidies to finance<sup>services to the poor through</sup> user charges levied on commercial or industrial<sup>establishments or high-income</sup> households.

3.30 In recovering costs for the Bank-financed MSWM<sup>investments, the</sup> experience was largely disappointing. Where the municipalities<sup>recovered</sup> operating costs through municipal or property taxes,<sup>collections</sup> were inadequate to ensure operations and maintenance, even<sup>when the project included a</sup> complementary component emphasizing improvement in municipal finance or property tax collections. Where there was a willingness-to-pay for solid waste services, however, more successful financial performance was achieved. Under the Singapore project, for example, recurring costs were recovered<sup>through a tariff for</sup> domestic wastes and a disposal fee for certain industrial<sup>wastes. Unde. the</sup> First Urban DeveloDment Project in Egypt, several communities<sup>in Cairo are paying</sup> for solid waste collection services directly to<sup>the Zabbaleen (private refuse</sup> collectors). By contrast, the experience in Merida,<sup>Mexico was discouraging;</sup> reportedly, 60 percent of the population did not<sup>subscribe to the paid service</sup> and simply dumped their garbage on streets or empty lots.

3.31 The calculation of ERRs for solid waste components<sup>is complicated by</sup> the fact that this service is generally treated<sup>as a public good. Accordingly,</sup> most of the project documents reviewed do not<sup>report ERRs for the solid waste</sup> components, citing methodological difficulties in<sup>estimating them. Of the six</sup> projects that do report ERRs, most calculated the<sup>cost reductions resulting from</sup> improved operations as the basis for evaluation<sup>or attempted to estimate the</sup> benefits of increased service coverage. The<sup>few attempted calculations on this</sup> basis showed significant returns: Second Calcutta<sup>Urban Development (27</sup> percent), Thailand Regional Cities Development (14<sup>percent), Lagos Solid Waste</sup> Management and Stormdrainage (25 percent), La Paz<sup>Municipal Development (44</sup> percent), Lima Metropolitan Development (transfer<sup>station only, 156 percent),</sup> and Recife Metropolitan Development (22 percent).<sup>Further information</sup> regarding the accuracy of these calculations is not currently<sup>available in the project</sup> documents. Nonetheless, when the calculation<sup>is based on improvements in</sup> operational efficiency, the ERR on comprehensive solid waste management projects or components can be substantial.

# Private Sector Participation

3.32 The private sector has the potential to increase<sup>significantly the</sup> efficiency of solid waste service delivery<sup>(see paragraphs 4.23-</sup> 4.46). Nonetheless, private sector provision of services<sup>was referred to in only a few</sup> projects, usually for collection services through.municipal contracts (e.g. , La
- 27 -

Paz, Lagos) or direct arrangements with householders (e.g., Cairo, Merida,). For example, to improve the industrial waste collection service, the Lagos project incorporates participation by private contractors that demonstrate sound operating practices and have the potential to expand their operations. Under the Firjt Urban Development Proiect in Egypt, the successful integration of Zabbaleen collection activities into the solid waste component demonstrated the potential for lowering costs and increasing the efficiency and effectiveness of services. This experience also demonstrated the feasibility of mobilizing the informal s',ctor productively. To investigate further the extensive experience with privatization in Latin America, West Africa, and the Middle East, INU has initiated research on this subject.
## IV. IMPROVING THE DESIGN **AND** IMPLEMENTATION<sup>OF MSWM COMPONENTS</sup>

4.01 MSWM is an integral part of the broad<sup>urban and environnental</sup> management of a city. To maximize the efficiency<sup>and effectiveness of the Bank's</sup> investments in this sub-sector, World<sup>Bank project designers need to address on</sup> a systematic basis the full range of<sup>solid waste operations and related</sup> environmental, institutional, and financial issues in designing MSWM components or projects. Although project officers<sup>generally are not responsible for</sup> designing the technical aspects of the<sup>specific MSWM improvements, they must</sup> ensure that the components prepared by<sup>the borrowers or solid waste management</sup> consultants provide: collection and disposal<sup>of solid wastes generated by all</sup> population groups at a level and cost that<sup>can be sustained locally; maximum</sup> protection of the environment; systems<sup>appropriate to local climatic, economic,</sup> physical, and social conditions; and<sup>high equipment and labor productivity.</sup> 4.02 The remainder of this chapter presents<sup>general recommendations</sup> for improving the design and implementation of MSWM components in World Bank project. The recommendations cover: design of MSWM sub-components, regulatory framework, institutional arrangements, financial arrangementb and pricing, lanca acquisition, and phasing of MSWM improvements. For<sup>more detailed guidance in identifying</sup> and planning an improved solid waste management<sup>system, see Environmental</sup> Management of Urban Wastes in DeveloDing Countries:<sup>A Project Guide by Sandra Cointreau</sup> (World Bank Urban Development Technical Paper<sup>Number 5).</sup>

# A. Component Design

4.03 The design of the MSWM component is<sup>a key determinant of the</sup> effectiveness of the solid waste investment.<sup>Based on the lessons of prior</sup> experience, the World Bank should no longer<sup>invesL in solid waste components that</sup> financc only the procurement of collection<sup>vehicles and equipment in the absence</sup> of a MSWM plan. As discussed earlier,<sup>these investments fail to address the</sup> broader institutional and financial<sup>problems that perpetuate low levels of</sup> service and consequent health effects and<sup>environmental</sup> degradation. Moreover, financing collection vehicles without<sup>appropriate provisions for maintenance</sup> results after a short time in vehicle<sup>breakdown and abandonment. If the World</sup> Bank wants to make a more significant<sup>impact on solid waste services in</sup> developing country cities than it has<sup>in the past, Bank-financed</sup> projects should incorporate a comprehensive policy<sup>framework that takes into account all</sup> physical, technical, legal, institutional,<sup>financial, environmental, and</sup> sociocultural aspects of MSWM in a<sup>jurisdiction. Future investments need not</sup> be free-standing projects. They do,<sup>however, need to be well-focused and</sup> integrated components that may incorporate<sup>the following MSWM sub-components.</sup>

# Strategie 1ISWM Plan

4.04 At a minimum, the MSWM component should<sup>include financing to support</sup> the development of a strategic solid<sup>waste management plan or phased action plan</sup> covering the full range of solid<sup>waste services and related management</sup> activities. For large cities, the plan<sup>should focus on the requirements of the</sup> municipality as well as the surrounding<sup>metropolitan area. A national solid</sup>
## - 29 -

waste plan is more appropriate for ledium-sized and small cities. The investment would cover: comprehensive data collection and analysis of local solid waste conditions; development of MSWM objectives and performance targets; design of the solid waste organizational structure and staffing with designated responsibilities for all categories of municipal wastes; development of a plan for improving waste operations ar.d facilities, vehicle maintenance and repair, staff training, and management practices and systems; identification of sites for new or improved transfer and disposal facilities; development of a financing scheme for capital investments and recurring costs; design of a plan for relocating occupants of sites selected for solid waste facilities; and the development of a plan for managing labor and integrating organized scavenger groups into the municipal solid waste service.

4.05 Since the municipal solid waste service is often the largest employer of municipal labor, almost all planning decisions will require a sensitive and enlightened approach in dealing with labor groups. Solid waste workers are usually well-organized and the unions need to be involved in the planning process. Moreover, a representative of labor groups should be assigned a role on the planning committee. If the new or upgraded solid waste service will include private sector participation, the plan will need to delineate the process of transferring workers from public to private enterprises. The plan also should include measures for improving working condicions and for eliminating the usually large number of unneeded staff on padded labor rolls.

4.06 In addition to labor relations, the plan should address interactions among the municipal government, MSWM agencies, and organized scavenger groups. In developing the plan, authorities should determine: whether there is a way to involve organized scavenger groups into future solid waste activities and the formal MSWM structure, how to mitigate impacts when these groups are displaced, how to continue to recognize the value of their contribution in recycling wastes, and how to improve their living and working conditions.

# Storag_ and Collection

4.07 When planning MSWM system improvements, project designers need to direct more attention to primary as well as secondary collection operations (i.e., from waste storage at the household or communal level through the collection and delivery of these wastes to one or more transfer stations or the final disposal site). Regarding primary collection, the components should encompass appropriate household bins or containers and communal storage bins (e.g., containers or bunkers) as well as vehicles capable of negotiating the narrow, unpaved twistirg pathways common to low-income neighborhoods. The collection system should be designed so loose waste is handled only once. To provide greater coverage for low-income areas as well as to maximize the sustainability of improved systems, MSWM components should support the use or development of low-cost indigenous technologies (e.g. , handcarts, tricycle rickshaws) for collecting garbage from individual households and then bringing it to collection points where the waste can be transferred to collection trucks.

4.08 With respect to secondary collection, which involves transporting waste from a transfer point or station to the final disposal or processing
- 30 -

facility, the purchase of foreign vehicles usually will<sup>be required. To achieve</sup> efficiency in collection operations, it is essential to<sup>match truck type and size</sup> with local conditions, particularly the prevailing solid<sup>waste characteristics</sup> (density and composition), road conditions, maintenance<sup>capacity, availability</sup> of spare parts, and labor rates. Due to the complexities of vehicle specifications and procurement, project designers<sup>should insist on loan</sup> conditions that require only agreed upon vehicles<sup>to be purchased for the</sup> component. Project designers should also stress appropriate<sup>vehicle selection</sup> and direct attention to the size and manageability of<sup>the procurement packages.</sup> Moreover, the initial procurement of collection vehicles<sup>should include</sup> provisions for spare parts (about 20 percent of vehicle cost)<sup>to ensure that the</sup> Bank-financed vehicles will be operable beyond the initial<sup>period of project</sup> implementation. An effective MSWM component also<sup>should include workshops and</sup> training for vehicle maintenance and repair. For<sup>useful information to support</sup> vehicle investment decisions, see "Refuse Collection Vehicles<sup>for Developing</sup> Countries," a recent UNCHS (Habitat) publication.<sup>In addition, a simple</sup> spreadsheet model for analyzing the unit costs of alternative collection schemes is available from INURD.

# Street Sweeping

4.09 The cleaning or sweeping of streets is an important aspect<sup>of MSWM.</sup> According to Flintoff, many cities spend between a third<sup>and a half of their</sup> solid waste budgets on this activity. Moreover, the<sup>cost of removing wastes</sup> which have been scattered on the street is considerably<sup>higher than the cost of</sup> collecting waste placed in containers.V In planning<sup>MSWM components, therefore,</sup> project designers should stress the provision of primary<sup>collection services,</sup> reduction of street litter through public education, as<sup>well as the adoption of</sup> systems that incorporate the development and use of effective tools and equipment that can achieve high labor productivity. Transfer<sup>depots and stations also</sup> should be included for the effective management of street<sup>sweepers and for the</sup> transfer of waste collected. As an alternative to transfer stations, arrangements can be made for collection vehicles to pick<sup>up the waste from the</sup> sweepers several times a day. Nonetheless, this approach<sup>does not obviate tne</sup> need for transfer depots which provide parking areas<sup>for handcarts, tool a.nd</sup> equipment storage, and hygiene facilities.

# Transfer

4.10 Where haul distances from the collection area to the disposal<sup>site</sup> are greater than 15-20 kilometers or where vehicle<sup>travel times exceed 30</sup> minutes, transfer stations should be considered among the<sup>MSWM improvements and</sup> included in feasibility studies. Although most municipalities<sup>give these</sup> facilities low priority, transfer stations can maximize<sup>the productivity of</sup> collection vehicles and crews and increase the useful<sup>life of the collection</sup> vehicles. To achieve economies of scale, project designers<sup>should ensure that</sup> V Frank Flintoff, Management of Solid Wastes in Developing<sup>Countries. WHO</sup> Regional Publications South-East Series no. 1 (New<sup>Delhi: World Health</sup> Organization, 1984), p.<sup>85</sup> .
- 31 -

the municipality incorporates a system-wide approach in locating, sizing, and scheduling these facilities, taking into account the location of present and future disposal sites. Moreover, transfer stations should be designed so as to minimize wasta handling.

# Resource Recovery and Disposal

4.11 All investments in expanding collection capacity must be accompanied by corresponding investments in environmentally safe disposal facilities, which may include resource recovery and recycling plants to reduce the volume of waste and to recover value from the discarded materials. The selection of a disposal system involves a consideration of such factors as environmental impact, costs and revenues from resource recovery, capital and operations and maintenance costs, and the cost and availability of land. In most developing country cities, however, the most appropriate disposal facilities will continue to be sanitary landfills (also referred to as controlled landfills), and where a market for compost can be demonstrated, composting plants. In areas where land is scarce, calorific value of waste is high, and institutional/technical capacity and financial resources are favorable, incineration with energy recovery may be considered. Whatever method is used, however, project designers should explore the possibility of regionalizing the disposal or resource recovery facility to maximize cost efficiency and enviLonmental protection. Moreover, even when resource recovery or incineration is ernployed, a sanitary landfill also will be needed to accept rejects and ash. For guidance in planning sanitary landfills, see "Landfilling Wastes," Department of the Environment Waste Management Paper No. 26, 1986. In addition, INUWS is preparing a manual on landfill management in developing countries.

# Pilot Projects

4.12 To promote new technologies or the development and production of indigenous tools and equipment, MSWM components should include pilot projects to test improved systems of solid waste collection and/or disposal or resource recoveiy that could be implemented on a larger scale if proven efficient and acceptable. This approach has been effectively carried out in a number of Bank projects (e.g., Cairo, Calcutta, Brazil) and should be incorporated into the design of future MSWM components.

# Hazardous Waste Management

4.13 Ineffective management of hazardous wastes threatens public health and the environment worldwide. In most developing countries, the problem is aggravated by the lack of controls over pollution and waste disposal. Consequently, hazardous wastes are entering municipal waste streams, causing surface and ground water contamination and other long-term adverse environmental and health effects. To maximize the benefits of a MSri ;component, more attention should be directed at planning safe municipal disposal facilities and instituting or improving environmental controls and monitoring to keep hazardous wastes out of the municipal solid waste system. If industrial wastes are collected by the municipality, project designers should ensure that all potential sources of hazardous wastes are identified and targeted for appropriate waste management.
- 32 -

Where industrial wastes are collected by the private sector, the municipality should ensure that the private companies that collect hazardous waste are licensed to do so and that the waste is safely transported and disposed of at designated disposal sites. Although laws controlling hazardous waste are enacted at the national or state level, the municipality should play a key role in monitoring municipal disposal sites for hazardous wastes; monitoring the generation of urban waste, especially the wastes from small-scale or cottage industry; identifying hazardous waste sites; and carrying out periodic inspections of industrial and hazardous waste collection and disposal operations. Further recommendations regarding hazardous waste management goes beyond the scope of this paper. For guidance on this subject, see "The Safe Disposal of Hazardous Wastes: The Special Needs and Problems of Developing Countries," (World Bank Technical Paper Number 93).

# Institutional Strengthening

4.14 Most developing countries have little or no expertise in environmental/sanitary engineering and municipal waste management. Moreover, the solid waste service in most developing country cities lacks planning, human resource development, and financial management and. budget control functions. Thus, efforts to improve MSWM should include appropriate levels of technical assistance and training in the operational, financial, and managerial aspects of solid waste management. To support the development of solid waste plans, technical assistance can be provided for: planning collection routes; assessing available or proposed equipment; setting up maintenance shops and depots; scheduling construction of strategic disposal facilities; and designing and siting transfer, resource recovery, and disposal facilities. Assistance is particularly needed in the siting and design of transfer stations and sanitary landfills. If resource recovery or recycling facilities are planned, technical assistance usually will be needed to manage plant operations and to advise on the most suitable means for marketing the recovered or recycled materials, ensuring quality control, and managing sales and delivery of products to consumers. Further assistance can be provided to help organize solid waste departments, supervise project execution and training, design and implement public information programs, design suitable cost recovery schemes, promote private sector (both formal and informal) or non-governmental participation in MSWM services, and advise on the design and evaluation of bid documents.

4.15 With respect to training, the MSWM components should provide on-thejob as well as specialized training in municipal management, municipal finance and accounting, public health, environmental protection, equipment operation and maintenance, and solid waste operations. For middle and top management, training may involve on-the-job or overseas training in some of the subjects covered by technical assistance, as discussed above. For local solid waste staff, the component should include on-the-job or local training in operating, maintaining, and repairing project-financed vehicles and equipment as well as operating a transfer station, sanitary landfill, or recycling plant.

4.16 As part of an institutional strengthening sub-component, a MSWM component could provide further assistance in assessing the existing or potential role of the private sector in municipal waste management. If private firms are
- 33 -

already operating in higher income neighborhoods or serving local industries and institutions, this sub-component should focus on expanding their participation in the solid waste system. To strengthen private sector skills, particularly in the areas of management and environmental protection, project-financed training could be extended to participating firms under certain conditions. (See paragraphs 4.23-4.26 for more information on the private sector.) Public Education 4.17 To promote or improve public cooperation in solid waste improvement, MSWM components should include funds for educating the public about local solid waste sorvices. For local residents, these education programs should focus on the services provided, the importance of MSWM to health and the community, the real costs of providing solid waste services and how they are paid, and what is expected of each resident in participating in the refuse management system. Basic information to be communicated includes: schedule of collection, storage requirements, arrangements for special collection of bulky wastes, schedule and location of special pick-ups for recyclables, fines and other penalties for nonparticipation in the system, and means for lodging complaints about the local solid waste service. For commercial and industrial enterprises, education programs should provide further information on disposing of specific materials and any applicable national, state, or local laws, ordinances, and regulations, including penalties for non-compliance. The information can be disseminated though the media, leaflets, pamphlets, billboards, and door-to-door contacts.

# B. Regulatory Framework

4.18 In planning MSWM improvements, project designers need to direct more attention to the regulatory framework for solid waste management. In most developing countries, existing laws and enforcement systems provide inadequate protection of the environment and fail to encourage public cooperation with the local solid waste management system. Thus, efforts should be directed at establishing appropriate solid waste-related laws, ordinances, regulations, and corresponding inspection and enforcement responsibilities and procedures at the national, state, and local levels. For example, national or state legislation is needed to control the disposal of hazardous wastes as well as to protect air and water resources from contamination. At the local level, laws and ordinances are needed to control illegal dumping and littering as well as to define citizen responsibilities in household storage, payment of charges, separation of recyclable wastes, and other solid waste-related tasks. Reqt.irements for siting sanitary landfills and other disposal facilities would fall under the jurisdiction of national as well as state and local authorities. 4.19 Enforcement will require special attention since it is always the weakest point in environmental control. Achieving effective enforcement activities will depend on many factors. Among the most important are: the capacity of the responsible local authority to monitor compliance and apply enforcement procedures; simplicity in administration or procedural ease in implementing a regulation; and broad public acceptance, achieved in large part by making information on regulations widely available. Furthermore, regulations should be few in number, transparent, unambiguous, easily understood, equitable
- 34 -

(following polluter peys principle), and considered to have significant positive physical and economic effects.

# C. Institutional Arrangements

4.20 The institutional arrangements for service delivery is a critical consideration in designing MSWM components. In planning these arrangements,<sup>the</sup> size and nature of the cities must be considered. The following addresses institutional considerations in large and intermediate and small cities.

## .Large Cities

4.21 In large cities, the optimum scheme is to have all refuse management delegated to one agency within the local government hierarchy. The agency should be placed at a level that corresponds to the financial importance and operational difficulties of the service and have a top level administrator, mid-level technical staffing, and its own budget. The designation of such an agency, however, does not preclude some operational functions being delegated to other agencies of local jurisdictions or to the private sector. Nonetheless, one agency should be assigned the principal responsibility for strategic planning, coordinating MSWM operations, contracting services, and overseeing contract performance.

4.22 Collection services in large metropolitan areas (populations greater than 500,000) may continue to be provided by local jurisdictions since there are few economies of scale in collection operations that are labor intensive and require many discrete pieces of equipaz,ent. As time and distance for hauling increase, however, the establishment of an area-wide authority with specific responsibilities for transfer, transport, and disposal operations can provide an efficient solution for managing post-collection tasks, which do have significant economies of scale. Further, the siting of one or a few well-managed metropolitan or regional disposal facilities maximizes environmental protection.

4.23 If the public and private sectors will share MSWM responsibilities, there are many possible institutional arrangements. In West Africa, for example, there has been promising experience involving the leasing of government-owned vehicles to private firms who assume responsibility for collection operations and maintenance. Under other public-private sector arrangements in several Latin American cities, a public agency authorizes a contract or grants a<sup>franchise to</sup> a private firm which provides the service using its own assets. Alternatively, a licensed or unlicensed private firm can operate its own assets and charge service recipients directly. In some cases, the public agency may<sup>provide</sup> service in some areas of the city while private firms operate in other areas. Public and private sector MSWM roles also may be divided according to collection and disposal functions.' i./ For a fuller discussion of private solid waste service contractual arrangements, see "Non-Government Delivery of Urban Solid Waste Services," draft framework paper by Roland Schertenleib and Thelma Triche (INUWS, September 1989).
- 35

4.24 With regard to solid waste collection, the private sector has been shown to be substantially more efficient than the municipal collection service. Based on detailed nationwide studies carried out in the United States, Canada, Switzerland, and Japan, as well as regional studies undertaken in Connecticut, California, and the midwestern United States, contract collection is about 35 percent less costly than municipal collection for comparable services.y Taking into account taxes paid by the private supplier, which support various local services, the true cost to the resident for contract service can be as much as 58 percent lower than that for the municipal service.5 Further, a study in 20 cities with similar urban conditions revealed that the cost of contract street sweeping, with the same frequency and quality of service in each city, was 43 percent less per curb mile than the cost of municipal sweeping.v 4.25 Although there are limited available data on the performance of private sector solid waste services in developing countries, experience in Brazil and Turkey corroborates the findings in the industrialized countries. According to one study,2' for a comparable level of service, taxpayers in Rio de Janeiro, where a municipal enterprise provides solid waste services, pay at least twice the amount per metric ton of refuse collected as taxpayers in Sao Paulo, where private firms are contracted to perform solid waste services. The higher productivity and efficiency of the private sector in Sao Paulo can be attributed largely to the higher labor and vehicle use efficiency of the private firms. Contributing factors are the high cost of maintaining the ancient collection fleet in Rio de Janeiro and the difficulty in replacing vehicles due to a government policy restricting access to credit to parastatals for equipment renewal. The three firms that operate the street sweeping and refuse collection service in Sao Paulo report to the Regional Administrations (bodies that administer the city's districts), which are responsible for authorizing payments and monitoring contract performance in accordance with measurable variables. The city's waste management department is responsible for overseeing competitive bidding, hiring contractors, and supervising the private services. A key factor in the success of this arrangement is the ability of the waste management department to negociate contract conditions with private firms on the basis of its broad knowledge of unit costs and performance standards.

4.26 In Adana, Turkey, the municipality hires two private firms to collect 75 percent of the city's wastes. The municipality works in one part of the city while the private contractors operate in a different area. Despite the reported

- ij/ Emanuel S. Savas, Privatization. (Chatham, New Jersey: Chatham House Publishers, Inc., 1987), p. 124.

- / ~Ibid., p. 125.

- j/ Ibid., p. 131.

- 2/ Luiz Costa Leite, "Private and Public Services: Different Approaches to Solid Waste Management in Sao Paulo and Rio de Janeiro," unpublished INURD paper, May 1989.
- 36 -

constraints in the private service (i.e., weak interest and consequent lack of adequate competition in the tendering process), the private sector costs for cleansing services are almost three times lower than the costs of service provided by the municipality; productivity of labor in the private firms is up to four times higher than that of the municipal service. To motivate the private sector in Adana, one case study reportY highlights the need for clarification in the contracts regarding task descriptions and agreement on appropriate performance levels for meeting sanitation and efficiency requirements. To initiate privatization in general, contracts should be flexible and attractive enough to the private sector to encourage competitive bidding and thus reduce prices. Contracts also should be long enough to allow a contractor to depreciate equipment purchases for the contract's execution. Further research is required to determine the range of conditions under which private sector delivery of services is most feasible. Nonetheless, the objective always should be to avoid monopolistic conditions and create contestable markets.

# Small and Intermediate Cities

4.27 For improving service delivery in small and intermediate cities, where there is no private provision of services and weak institutions, an appropriate authority at the national level (e.g., Ministry of Health, Environment, or Public Works) should be assigned responsibility for MSWM planning, developing standards, and providing technical and financial assistance to small and medium-sized municipalities. In some cases, financial intermediaries, such as municipal development banks, also can have an important role in supporting comprehensive MSWM activities in cities that have no other opportunities to obtain credit. The involvement of these national sectoral or financial institutions will promote nationwide coverage of MSWM services and maximum protection of the environment.

4.28 Whatever institutional scheme is adopted for large or small and intermediate cities, project designers should ensure that there is a clear organizational structure with defined responsibilities and staff, an established means for continuous communication and coordination among all solid waste-related agencies, and the ability to secure the necessary resources (budget and qualified staff) to sustain operations and maintenance. The institutional structure also must incorporate an ongoing planning function as well as effective budgeting, cost accounting, and management information systems that include monitoring of collection performance. Lastly, if the implementation of a MSWM component requires institutional changes to effectively execate an improved refuse management system, project designers should insist that these changes occur before any equipment is purchased.

j/ A. Durak and K. Sorgun, "Solid Waste Collection: The Case of Adana," in Management Options for Urban Services: Report on a Seminar held at Cesme. Turkev on November 11-20. 1985, Washington, D.C.: The World Bank, 1986.
> - 37 -

# D. Financing. Pricing, and Cost Recovery

4.29 As mentioned earlier, MSWM is a costly service that requires specialized equipment and facilities and usually accounts for between 20 and 50 percent of municipal operating budgets. In planning MSWM components, more attention should be directed to the problem of financing capital investment costs (i.e., facilities, equipment, land) and recurring costs (i.e., operations and maintenance, debt service) of solid waste collection and disposal. The following sections discuss arrangements for financing these expenditures as well as pricing and cost recovery implications.

# Financing

4.30 In determining appropriate financial mechanisms, project designers should take into account that MSWM activities are recurring cost-intensive. The solid waste service involves large numbers of municipal workers as well as substantial operations and maintenance costs. Moreover, the recurring costs of this service encompass large expenditures for replacing specialized collection equipment every seven to eight years. Thus, the municipal solid waste service needs access to funds on a regular basis to finance operations and maintenance as well as the replacement of essential equipment. In addition to this funding, however, the service also requires financing for the initial capital investments in resource recovery plants, land for transfer and disposal facilites, and a fleet of new collection vehicles.

4.31 To finance the recurring costs of solid waste management, the solid waste service generally obtains funds from the municipality's current revenues, which include local taxes and intergovernmental transfers, and in some situations, user charges. In many developing countries, however, there is limited scope for collecting user charges for MSWM (see section on pricing and cost recovery). Thus, most recurring costs will need to be financed through local taxes and transfers.

4.32 To finance the capital investment costs of MSWM, municipal governments have three principal options: making arrangements with existing financial intermediaries (e.g., municipal development banks) that can extend loans to municipalities for this purpose; establishing a special loan or grant program through the central government budget system; and establishing sinking funds to finance the planned replacement of collection vehicles. In addition, grants or loans from bilateral agencies may be available to finance the purchase of collection vehicles. Based on prior experience in many developing countries, however, there are risks associated with this latter type of assistance. Where there is bilateral support, municipalities often encounter problems with inappropriate imported equipment requiring high maintenance costs. Financing from municipal revenues is rarely an option since this source is already overburdened by the large recurrent costs of MSWM and other urban services.

4.33 In determining the most effective arrangements for financing improved solid waste services, from storage and collection through disposal, project designers or their consultants should analyze the local municipal finance system,
- 38 -

the system of lending for municipal capital investment, and local demand for solid waste services. Where there is limited potential for increasing revenues through user charges and inadequate local revenues to cover the costs of improved MSWM services, most MSWM components will need to be attached to urban management projects that focus on improving local revenue generation, cost accounting, and municipal budgetary planning and control. To successfully estimate and recover the costs of MSWM through local revenues, as well as user charges, these urban management projects should direct special attention to improving the recording of all MSWM costs (i.e., equipment, operations, maintenance, depreciation, and debt service) in the responsible institutions. Moreover, the financial arrangements for MSWM components should provide for continuous funding specifically for solid waste services.

# Pricinj and Cost Recovery

4.34 In determining how to recover costs for MSWM, project designers must take into account that the solid waste service is a private good as well as a public good. Solid waste collection is a private and public good because it serves the interests of individual householders or enterprises and has positive impacts on public health and the local environment. Thus, in determining cost recovery arrangements for solid waste collection, project designers should plan to recover some portion of the costs from the beneficiaries of the private benefits; the public benefits of solid waste collection can be paid for by the municipality. By contrast, the provision of solid waste transfer and disposal is largely a public good because the principal benefits of these services (i.e., impacts on environmental quality and public health) are external. Thus, in principle, the costs for providing this service should be paid for on a collective basis.

4.35 In determining the most appropriate scheme for recovering the costs of municipal solid waste services, there are two basic financial instruments: (i) general municipal revenues, which include local taxes and intergovernmental transfers, and (ii) user charges, which include benefit taxes (mandatory solid waste charges) and voluntary fees (tariffs) billed directly to che properties receiving the service, added to oc:her urban service billings, or added as a surcharge on property, business, or other local taxes. To recover the costs of MSWM, more than one of these insLyuments usually will be needed. The selection of each instrument should be based largely on a consideration of the type of - service provided collection or transfer and disposal.

4.36 Solid Waste Collection. To recover the costs of solid waste collection operations, the most commonly used instruments are local taxes, user charges, or some combination of local taxes and user charges. The type and level of user charges to be applied will depend on the beneficiary. For example, industrial and commercial enterprises generally view solid waste collection as a private good and have much variation in the level of service required; thus, they can be charged variable tariffs to cover the full cost of providing the desired level of service. The charge for this service can be based on: actual or estimated quantity and type of waste collected, frequency of collection, kind of business, and/or area of buildings or property.
- 39 -

4.37 In residential areas, municipalities should attempt to recover all or a portion of their solid waste costs through mandatory user charges or benefit taxes. In establishing an equitable basis for setting charges, the municipality has two general options. One alternative is to charge a mandatory fixed user charge based on one or more measures of service level, i.e., number of waste containers, frequency of collection, distance from containers to collection vehicles, and type and quantity of waste. This scheme would be applied to homogeneous neighborhoods; higher income neighborhoods would be charged a fixed fee for a higher service level than lower income neighborhoods, which would receive a lower level of service for a lower price. In low--ncome areas, the municipality should provide a basic level of service that is adapted to local needs and traditions and allows for some degree of payment, either in cash or in kind. The remainder of the costs for collection in these areas can be subsidized by local revenues. In some cases, user charges from commercial and industrial enterprises that pay for high quality individualized service can be set high enough to allow a municipality to extend service to low-income areas.

4.38 Where neighborhoods are not homogeneous, users can be charged variable fees based on one or more measures of household income (e.g., number of rooms, floor space of buildings, and property values). In establishing the rate structure based on income, however, project designers will need to consider the reliability, availability, and accessibility of property data. Where there are inadequate data, as is the case in most developing countries, the charge for solid waste collection should be based largely on service level.

4.39 As an alternative to charging benefit taxes to recover solid waste collection costs, municipalities or private solid waste services can collect residential user charges only from those willing to pay. Where there is a perceived need to have garbage removed and a consequent fine if the refuse remains on or near the property, residents can be expected to pay for the collection service or haul their wastes to designated transfer/disposal sites. The generation of significant revenues from these beneficiaries, however, will be largely dependent on the system's capacity to provide a high level of service and to enforce anti-dumping regulations. In some cases, it may be possible to collect user charges only from those willing to pay for high quality individualized service; the costs of providing a basic level of service in other areas could be financed by local revenues. Where there is an inelastic demand for solid waste services, user charges for high quality services can be set high enough to subsidize collection services in other parts of the city. Although the collection of voluntary user charges has-proven effective in many cities in the United States, there is limited experience in developing countries. A few examples in Guatamala and Mexico shows that there is a problem of illegal dumping by those who choose not to pay or cart their wastes to municipal disposal sites.

4.40 Although project designers should attempt to recover the recurring costs of solid waste collection to the maximum extent possible, there will be situations where the application of user charges will not be feasible. In these situations, municipalities will need to continue to pay for solid waste collection entirely out of local taxes. Normally, the cost will be recovered through the property tax.
# - 40 -

4.41 The mode of billing for solid waste collection services (i.e. separate charge, addition to other urban service bills, or surcharge on local taxes) will have an effect on the cost of collection as well as the ease of enforcement. For example, a separate charge billed directly to the consumer is the most expensive approach. The administrative cost of billing and collecting charges will increase significantly the overall cost of MSWM. In the United States, for example, this increase has been estimated to be as high as 10 to 15 percent of the cost of refuse collection.9' Moreover, separate user charges are the most difficult to collect. In the absence of a legal basis for imposing fines or other penalties for non-payment, or if the enforcement of these penalties is deficient, some service recipients will have no incentive to pay. In most cases, the municipality will continue to collect refuse from non-paying beneficiaries to prevent unsanitary neighborhood conditions.

4.42 The more effective approach to billing for solid waste services is attaching solid waste fees to existing water, electricity, or other urban service bills. This system is less costly to administer (generally, three to five percent of collection costs based on experience in the United States) ,2 and easier to enforce. If the solid waste charges are not paid, the water or electricity service can be withheld. The effectiveness of this approach, however, will depend on the cooperation of the corresponding service agency as well as the coverage and collection performance of the billing qystem. In some situations, a private collection agent can be contracted to pert _.D_ joint billing operations for several municipal services.

4.43 Incorporating solid waste charges into the property tax or other local tax bill, either as a separate line item or combined within the entire property tax bill, is the least expensive mode of billing for solid waste collection. Since the tax will be ccllected whether or not it finances solid waste services, there is no additional cost for collecting the solid waste charge. Tax collection performance, however, will depend on the coverage and effectiveness of the local tax system.

4.44 Solid Waste Transfer and Disposal. Since solid waste transfer and disposal impart only public benefits, the recurring costs of these operations should be recovered largely through local taxes and intergovernmental transfers. If solid waste collection is privately financed or executed by an entity other than the one carrying out transfer and disposal operations, however, the costs for transfer and disposal may be recovered through tipping fees, a direct charge for recovering the costs of operating a transfer or disposal facility.

4.45 Tipping fees are based on volumc, weight, and sometimes type of waste; they can be used most successfully where there is a shortage of landfill sites, public and government concern for protecting the environment, and 2/ E.S. Savas, Daniel Baumol and William A. Wells, "Financing Solid Waste Collection," in The Organization and Efficiency of Solid Waste Collection, E.S. Savas (Lexington: Lexington Books, 1977), p.<sup>87</sup> .

1Q/ Ibid .
- 41 -

effective enforcement of anti-dumping regulations. Nonetheless, in most developing countries, where these conditions do not exist, the charging of separate disposal fees may encourage uncontrolled dumping. Where there is broadbased local public concern for environmental protection, however, all or a portion of the costs for safe disposal facilities could be financed through the ueer fees normally charged for collection services.

4.46 Based on the review of World Bank lending for MSWM, there is little experience in charging fees for disposal. Moreover, most residents and local governments are concerned only about having their wastes removed and assign low priority to how the wastes are disposed of. Thus, a substantial portion of costs for transfer and environmentally safe disposal may need to be recovered through special intergovernmental transfers. In planning the financial arrangements for regional disposal facilities, project designers should make a realistic assessment of how much the participating municipalities can and will share in the costs of safe disposal and then estimate transfer needs. The use of these transfers in financing regional disposal facilities may be justified on the basis of meeting national environmental objectives.

# E. Land Acquisition

4.47 The availability and accessibility of environmentally acceptable sites for transfer stations, landfills, recycling facilities, and other solid waste-related facilities is another aspect of MSWM that requires priority attention. To improve the implementation of MSWM components, project designers should ensure that there are appropriate sites for the planned facilities and that these sites will be available for the timely execution of the solid waste management improvements. (For information on selecting suitable sites for landfills, see "Landfilling Wastes: A Technical Memorandum for the Disposal of Waste," Department of the Environment Waste Management Paper no. 26.) Accordingly, nroject designers should insist on making land acquisition a condition of loan effectiveness. To meet this requirement, the process of selecting and acquiring sites could take place as part of an earlier project in the same country, _inanced by project preparation funds.

# F. Phasing of MSWM Improvements

4.48 Future Bank investments in MSWM should be phased so as to reflect the objectives arid constraints of each project city or larger planning area. Unless there is an existing solid waste plan, however, the first phase of Bank involvement will consist of financing for the preparation of the strategic solid waste plan and execution of key institutional improvements. If there are critical collection equipment shortages in a city, the first phase also may include financing for a limited number of replacement vehicles, including spare parts. The second stage of investment would occur after the solid waste plan is formally adopted and important institutional adjustments are accomplished. At this time, the Bank could finance foreign equipment and construction of maintenance shops, transfer stations, and non-polluting disposal facilities to expand citywide solid waste setvices. Other program elements may include pilot projects, public educational activities, and further institutional strengthening. Subsequent phases of World Bank investment could finance solid waste services
42 in other jurisdictions; finance construction of strategic facilities; or support the implementation of new solid waste programs.

# C. Research Needs

- 4.49 Several areas for research on MSWM can be identified based on the above analysis and discussion. In order of priority, the following items summarize the recommended topics for investigation: (a) Relative Magnitude of Damages and Benefits Versus Cost of Providing Strvice. If improvements are to be achieved in MSWM, particularly in providing safer disposal, it is essential that the environmental and public health benefits be better quantified. Although it may not be possible to obtain sufficient information for detailed cost-benefit evaluations, a broader understanding of the relative magnitude of the costs and benefits of upgraded services would permit a better approximation of the economic rate of return of MSWM projects. It also would facilitate the ranking of solid waste projects in comparison to that of other investments in urban services.

- (b) Pricing Strategies for Improved Cost Recovery. As discussed in the sec-ion on pricing and cost recovery, the objective in setting prices for solid waste services should be to recover as much of the cost of providing the service as possible given local demand characteristics. To better evaluate pricing strategies, research should focus on discriminatory pricing approaches (e.g., charges based on quantity and type of wastes collected for commercial or industrial consumers; charges based on the quality of services provided in upper-income neighborhoods); separable demand approaches (e.g., charge for collection services where there is relatively inelastic demand, use local taxes or intergovernmental transfers to pay for disposal); and intra-urban cross-subsidies (e.g., charge commercial and upper income residential customers sufficiently for high quality services so that minimum acceptable collection services can be extended to low-income peri-urban areas).

- (c) Private Sector Delivery of Solid Waste Services. Given the poor track record of public solid waste services, there is a need to look to the private sector to achieve efficiency gains. Since an examination of Bank experience to date revealed few concrete examples, further investigation of private solid waste service arrangements in developing countries should be carried out to develop guidelines for determining how, where, and under what circumstances the role of the private sector in this subsector can be expanded.
- 43 -

- (d) APEX Institutions for MSWM. Institutional strengthening is a prerequisite to improved solid waste service delivery. Even if the private sector assumes a larger role, there still will be a need for a metropolitan area-wide institution to conduct comprehensive planning and to contract and oversee services. At the country level, a national solid waste authority may be needed to plan, develop standards, and provide technical and financial assistance to municipalities. To determine the effectiveness of different approaches in centralizing normative, planning, and technical assistance responsibilities while decentralizing investment decisions and operations, an evaluation of the various approaches (e.g., national solid waste authority, municipal development banks) supported by Bank projects should be performed.

- (e) Strategic Planning ADDrcaches, A strategic MSWM plan should be a prerequisite to all significant investments in solid waste management. To improve the planning of solid waste services and related management activities in large as well as small and intermediate cities, research is needed on the framework and methodologies for developing strategic MSWM plans (as described in paragraph 4.04). The use of interactive microcomputer models to assist in the planning process also should be investigated.

The INU research plan currently includes studies on health impacts of inadequate waste disposal, private sector service delivery, and strategic planning.