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Waste Management PPP: City of Johannesburg Alternative Waste Treatment Technology Project Municipal PPP Conference 18 February 2010. Contents _______________________________________________________________________. Background Institutional Arrangements The Need Legislative Mandate

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  1. Waste Management PPP: City of Johannesburg Alternative Waste Treatment Technology ProjectMunicipal PPP Conference18 February 2010

  2. Contents_______________________________________________________________________Contents_______________________________________________________________________ • Background • Institutional Arrangements • The Need • Legislative Mandate • Project Planning • CoJ Process • Lessons Learned

  3. Background______________________________________________________________________________________Background______________________________________________________________________________________ The Growth and Development Strategy • The GDS presents the City’s understanding of the longer term strategic direction and future efforts needed to accelerate growth and enhance development • The GDS ensures harmonisation and alignment with National & Provincial strategies • GDS developmental paradigm consists of six principles, which collectively reaffirm the City’s commitment to its Constitutional objects and duties Proactive absorption of the poor Innovative governance solutions Balanced & shared growth Sustainability & environmental justice Social mobility and equality Settlement restructuring

  4. Background______________________________________________________________________________________Background______________________________________________________________________________________ The City’s Vision Proactive absorption of the poor “In the future, Johannesburg will continue to lead as South Africa’s primary business city, a dynamic centre of production, innovation, trade, finance and services. This will be a city of opportunity, where the benefits of balanced economic growth will be shared in a way that enables all residents to gain access to the ladder of prosperity, and where the poor, vulnerable and excluded will be supported out of poverty to realise upward social mobility. The result will be a more equitable and spatially integrated city, very different from the divided city of the past. In this world class African city for all, everyone will be able to enjoy decent accommodation, excellent services, the highest standards of health and safety, access to participatory governance, and quality community life in sustainable neighbourhoods and vibrant urban spaces” Social mobility and equality Balanced & shared growth Settlement restructuring Sustainability & environmental justice Innovative governance solutions

  5. Background______________________________________________________________________________________Background______________________________________________________________________________________ 1 x IDP* 1 x SDF* 7 x RSDFs Precinct Plans / Development Frameworks / Community Participation Planning Instruments Jo’burg GDS 13 Sectoral Plans

  6. Institutional Arrangements _______________________________________________________________________ WATER ENERGY WASTE • MAXIMISE REACH • REDUCE BACKLOGS • REDUCE LOSSES • INFRASTRUCTURE UPGRADE WATER • MAXIMISE REACH • REDUCE BACKLOGS • REDUCE LOSSES • INFRASTRUCTURE UPGRADE • REDUCE OUTAGES ENERGY JOBURG WATER CITY POWER PIKITUP • CLEAN CITY 24/7 • IMPROVE OPERATIONAL • EFFICIENCIES • MINIMISE WASTE TO • LANDFILLS WASTE IMPROVING THE QUALITY OF LIFE OF CITIZENS Infrastructure & Services Sector INFRASTRUCTURE AND SERVICES SECTOR KEY OUTPUTS SECTOR FOCUS AREAS DELIVERY OF BASIC SERVICES IMPROVE SERVICE DELIVERY

  7. Institutional Arrangements_______________________________________________________________________ Infrastructure & Services Environmental Management Environmental Health, Planning, JMPD Pikitup Waste Management Regulatory Planning & monitoring Service Delivery Enforcement

  8. ISD: Waste Sector Develops waste service delivery framework Ensure Pikitup delivers services in line with Agreement Monitors Pikitup performance Assess & verify Pikitup performance Reporting to Mayoral Comm & Portfolio Committees Tariff modelling & determination Implements strategic projects e.g LFG & Alternative waste treatment Technology projects. Institutional Arrangements Mandate

  9. Pikitup Johannesburg (Pty) Ltd Municipal Owned Entity, 100% owned by CoJ Delivers waste services according to Service Delivery Agreement (SDA) Implements critical priorities as per GDS, IDP & other priorities Develops annual business plans outlining service levels, methods Renumerated by CoJ via service fee & Capex funding Reports monthly, quarterly & annually Institutional Arrangements Mandate

  10. The Need______________________________________________________________________ • Major growth period for the City • Limited landfill airspace • Difficulty to establish new landfills due to: • NIMBY & lack of suitable land • New Waste Act & Relevant authorities support for new landfills • IDP requires 15% waste diverted from landfill

  11. The Need______________________________________________________________________

  12. The Need______________________________________________________________________

  13. The Need______________________________________________________________________

  14. Legislative Mandate______________________________________________________________________ • The Constitution • A right to an Environment that is not detrimental to human health • Schedule 4 & 5 • National Environmental Management Act • Duty of Care • Polluter pays principle • Environmental Conservation Act • Section 20 • Municipal Systems Act • Municipalities to ensure universal access to essential services • Integrated Development Planning (IDP) process • NEMA: Waste Act

  15. Legislative Mandate______________________________________________________________________ • Polokwane Declaration • 50% of waste away from landfill by 2012 • A plan for zero waste by 2022 • CoJ IDP Targets • 15% diversion of waste from landfill by 2010 • 50% composting of waste by 2010 Currently only 5-7% diversion achieved

  16. Legislative Mandate_______________________________________________________________________Waste Hierarchy Cleaner Production Prevention & Minimisation Recycling Re-use Recovery Composting Treatment Physical, chemical destruction Disposal Landfilling

  17. Why Waste Treatment Technology (Waste to Energy)? Reduce waste to landfill by about 60-80% Electricity Generation Potential for earning carbon credits Proven technology world-wide; Europe leading Project Planning______________________________________________________________________

  18. Thermal Treatments Incineration Autoclaving Emerging Thermal Treatment Gasification Pyrolysis Biological Treatments Windrow Composting In Vessel Composting Anaerobic Digestion Mechanical Biological Treatments (MBT) and Mechanical Heat Treatments Project Planning______________________________________________________________________

  19. In Denmark: • 13 organic household waste composting plants • 33 incinerators • 120 garden waste composting plants • ~5 biogas facilities • ~15 major landfills • ~20 inert landfills Ref: COWI Packaging Waste: Recycled 56% (2000)

  20. Comparison of treatment technologies Ref: COWI

  21. Project Planning______________________________________________________________________ The optimum combination of technologies for an integrated waste management system depend on the following key decision-making parameters: • Landfill diversion targets • CO2 reduction / Environmental targets • Energy recovery and material recovery targets • Affordability targets (Capex, Opex, household levy /gate fee) • Procurement, ownership & financing strategy (risk allocation)

  22. CoJ Process______________________________________________________________________ • Mayoral Approval to initiate the project • RFI Issued • Feasibility Study Conducted in line with PPP guideline • Procurement process to follow involving: • RFQ • RFP • Appointment of preferred bidder

  23. CoJ Process______________________________________________________________________ Technical Feasibility Study • Needs Analysis – Summary of need for alternative waste treatment technologies in the City. • Technical Solutions Options Analysis – This is a full analysis listing Technologies available. • Technical Options to be considered for Johannesburg • Service Delivery Options Analysis- A full review of service delivery options carried out. • Proposed solutions • Summary and Recommendations.

  24. CoJ Process______________________________________________________________________ Other Aspects of Feasibility Study • Detailed Due Diligence of all the key issues associated with the selected options • Execution of a Value Assessment exercise in terms of affordability of the selection technical options as compared to avoided landfill costs • Risks & costing thereof • Detailed Procurement Plan for the various options • Submission of Report to Treasury & Council

  25. CoJ Process______________________________________________________________________

  26. CoJ Process______________________________________________________________________

  27. CoJ Process______________________________________________________________________

  28. Electrical Connection • Load Study • Linbro Complete - Eskom Connection • Other 4 sites Complete City Power connection • Embedded Generation Application. • Systems Use Agreement / Supplementary Supply Agreement. 28

  29. Electrical Connection REPA/ ISO Generation plant Invoice for K W sold at REFIT tariff Meters PPA between ENER-G and REPA Invoice for K W sold at Eskom Tariff Power delivered to end user PPA between Municipality and Eskom A three party agreement for systems use Municipality / Eskom 29

  30. Power Sale Agreement • City Power was initially approached to purchase the power. • NERSA, Renewable Feed In Tariff - April 2009. • License application with NERSA - May • Government Notice R.721 - Electricity Regulations Act (4/2006): Electricity Regulations on New Generation Capacity published in August 2009

  31. Electricity Amendment Act • NERSA to draft rules for Independent Systems Operator (ISO) • REPA / ISO to purchase power from all Independent Power producers • REPA / ISO Tender process Conditional upon; • REPA needs Cost recovery Mechanism ( CRM) to be approved. • IRP 1 - Integrated Resource Plan 1 • National Treasury Support (Guarantee) for the costs of the program

  32. CoJ Process______________________________________________________________________ Key Considerations from Feasibility Study • Site Selection • Calorific value of the waste • Hazardous landfill site • Suitability of technology for CoJ purposes • CoJ By-Laws • Financing of the project • How to address the risks & sensitivities

  33. Lessons Learned______________________________________________________________________ • PPP process requires proper time management & project management • Use the support from National & Provincial PPP Units • Establish a multi-disciplinary Steering Committee • Ensure to procure Transaction Advisor with prior PPP & Project Finance experience • Being a 1st in South Africa, international expertise is necessary • Ensure Buy-in from Senior Management & Politicians

  34. Thank You! Palesa Mathibeli Director: Waste Sector Infrastructure & Services Department Tel: (011) 381 0323 E-mail: palesamat@joburg.org.za

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