14.0 Financial and Economic Aspects

(1)

Content of Lecture

14.1 Costs of solid waste collection, sorting and processing

14.2 Benefits of managing solid waste

14.3 User fees and fee collection

14.4 Benefits of waste reduction and recycling

(2)

14 Financial and Economic Aspects 14 Financial and Economic Aspects

Rising population and MSW:

the globally generated MSW the globally generated MSW

In 1990, - 1.3 billion metric tons In 1990, - 1.3 billion metric tons

Presently- 1.6 billion metric tons Presently- 1.6 billion metric tons

Money for managing the MSW:

• In the Early 1990s - Asian countries spent about US$25 billion/yr _{In the Early 1990s - Asian countries spent about US$25 billion/yr}

• By the 2025- - this will rise to around US$50 billion/yr. _{By the 2025- - this will rise to around US$50 billion/yr.}

Hence, SWM has become a large, complex & costly service

14.1 Costs of waste collection, sorting & processing 14.1 Costs of waste collection, sorting & processing

Background

(3)

MSW management consumes a high percentage of the

municipal budgets, for example:

• In Malaysia, an average of 50% of the municipal budget is spent on_{In Malaysia, an average of 50% of the municipal budget is spent on}

MSW, and of this, 70% is spent on collection. MSW, and of this, 70% is spent on collection.

To develop an integrated and cost-effective MSW management

system, individual components of the system should be:

• chosen so they do not overlap or compete excessively _{chosen so they do not overlap or compete excessively}

• sized to handle the portion of the waste optimallysized to handle the portion of the waste optimally

• located so that transportation costs are minimumlocated so that transportation costs are minimum

• owned, operated, and financed to minimize overall public costs_{owned, operated, and financed to minimize overall public costs}

(4)

14 Financial and Economic Aspects 14 Financial and Economic Aspects

Case Study

: costs of MSW management in an Egyptian settlement : costs of MSW management in an Egyptian settlement Rosetta region, Nile Delta (1/3)

Rosetta region, Nile Delta (1/3)

• Total 17 human settlements (one urban and rest are rural) _{Total 17 human settlements (one urban and rest are rural)}

• total population of the region: 191,686 (2005). total population of the region: 191,686 (2005).

• average household size: 4.5 to 7.4_{average household size: 4.5 to 7.4}

Municipal authorities have the responsibility for providing SWM service Municipal authorities have the responsibility for providing SWM service

•one truck and few personnel collects the waste infrequentlyone truck and few personnel collects the waste infrequently

•solid waste generated, 32.54 tons/day, either infrequently collected or _{solid waste generated, 32.54 tons/day, either infrequently collected or} just dumped illegally

just dumped illegally

(5)

Case Study

:

costs of MSW management in an Egyptian

settlement Rosetta region, Nile Delta (2/3)

Fleet needed to handle the generated SMW: Fleet needed to handle the generated SMW:

• 5-ton trucks working on the main streets : 20 tons/day_{5-ton trucks working on the main streets : 20 tons/day}

• 1.1-ton trucks covering more remote and narrow internal streets (with _{1.1-ton trucks covering more remote and narrow internal streets (with} transferring loads to larger trucks): 26.4 tons/day

transferring loads to larger trucks): 26.4 tons/day

• Landfill: 1.62 ha plot has the capacity to accept 4.77 yr of MSW in the _{Landfill: 1.62 ha plot has the capacity to accept 4.77 yr of MSW in the} area.

(6)

14 Financial and Economic Aspects 14 Financial and Economic Aspects

Case Study

:

costs of MSW management in an Egyptian

settlement Rosetta region, Nile Delta (3/3)

Annual costs of this SWM system

Annual costs of this SWM system (including depreciation, sanitary landfill (including depreciation, sanitary landfill preparation and rehabilitation, and operational costs) was estimated as

preparation and rehabilitation, and operational costs) was estimated as

$300,000

•Costs could be totally covered by the locally raised funds. _{Costs could be totally covered by the locally raised funds.}

•The willingness to pay was estimated as- _{The willingness to pay was estimated as-}$550,000$550,000. .

•Profitability of the service: rate of return on investment vary 59.6% to _{Profitability of the service: rate of return on investment vary 59.6% to} 57.4%.

57.4%.

•MSW service could be financed locally and could represent a _{MSW service could be financed locally and could represent a} profitable business.

profitable business.

•could be provided either by a small-scale firm, a local cooperative or could be provided either by a small-scale firm, a local cooperative or an NGO

an NGO

(7)

Example:

Latin American model for integration of small-scale

waste collection enterprises with the formal waste collection

Enterprises

• paid by the municipal authorities or by a community paid by the municipal authorities or by a community

• provide collection using man powered or semi-motorized cartsprovide collection using man powered or semi-motorized carts

• serve hilly areas marginally or not served et al where collectionserve hilly areas marginally or not served et al where collection

trucks cannot reach.trucks cannot reach.

• low cost of equipment and administrative costs are minimal, low cost of equipment and administrative costs are minimal,

• operation and maintenance of the equipment is simple andoperation and maintenance of the equipment is simple and

(8)

14 Financial and Economic Aspects 14 Financial and Economic Aspects

Benefits of managing solid waste are:



Achievement of local, regional, and state solid waste

reduction/diversion goals.



Savings on landfill space.



Savings on energy.



Reduction of water pollution risks.



Conservation of natural resources.



Reduction of landfill disposal costs.



Production of reusable products.



Revenue from sale of reusable materials.

14.2 Benefits of managing solid waste

(9)

Financial Sources

- municipal taxes

- fees charged for services

- government subsidies

- deposit-refund system for recyclables

(Bangkok, Singapore, Tokyo, and Jakarta)

-

several forms of levy

-

direct fees based on waste volumes

-

indirect fees

(based on property taxes, floor area, water and electric bill)

(10)

14 Financial and Economic Aspects 14 Financial and Economic Aspects

Benefits of waste reduction & recycling

- Space savingSpace saving

- Sustainable use of natural resources_{Sustainable use of natural resources}

- Resource recovery_{Resource recovery}

- Environmental savingsEnvironmental savings

- Financial benefitsFinancial benefits

- Health benefits_{Health benefits}

- Social uplift _{Social uplift}

14.4 Benefits of waste reduction & recycling

(11)

Extracting and adding value processes

Extracting and adding value processes Collection_Collection

_Sorting_Sorting

_{Accumulation of volume}_{Accumulation of volume} _{Pre-processing}_{Pre-processing}

Small manufacturing craftsmanship_{Small manufacturing craftsmanship}

(12)

14 Financial and Economic Aspects 14 Financial and Economic Aspects

Job opportunities in SWM can be found at different levels

For example at Micro-enterprises For example at Micro-enterprises

•Micro-enterprises are for profit business operations. _{Micro-enterprises are for profit business operations.}

•Run by entrepreneurs (focus is on creativity, innovation and the _{Run by entrepreneurs (focus is on creativity, innovation and the} constant search for new products or process ideas)

constant search for new products or process ideas)

•Micro-enterprises enter into SWM activities because they see a gap in _{Micro-enterprises enter into SWM activities because they see a gap in} service delivery and existence of a demand for fulfilling that gap.

service delivery and existence of a demand for fulfilling that gap. •The extent of private sector depends on a number factors including The extent of private sector depends on a number factors including demand for the service, ability to pay, poverty and regulations.

demand for the service, ability to pay, poverty and regulations.

14.5

14.5 Job opportunities in Job opportunities in SWM

(13)

Thank You for Your Kind

attention!