Private Investment in SWM: Case study of South Indian City.

1. Private Investment in SWM: Case study of South Indian City.

2. MSWM characteristics • Public good nature (public health) • Experience indicates cost recovery a problem. • General public monopoly. • Easy to unbundle. Four distinct phases • Waste generation point. • Collection, Storing and transportation. • Treatment. • Residue Management. Prof.Biju Varkkey IIMA

3. Options for Solid Waste Disposal • Crude Dumping. • Sanitary Land Filling. • Incineration. (burning) • Pyrolysis. (heating to 600 - 1000 C) • Pelletisation. • Biomethanation. • Composting. Prof.Biju Varkkey IIMA

4. Technology/Handling Options: • Waste to Waste (Manageable) (categorisation/optimisation). • Waste to Energy • Waste to Manure/Fertilizer. • Waste Reuse. • Waste to Gas/Slush: Prof.Biju Varkkey IIMA

5. A future challenge. • Still to effectively address the emerging issue of E waste. • Currently, it resides in the corner of our houses or are sold to the second hand market. • Stripped down parts ends up in SW dumps. • Proportions bound to increase. Prof.Biju Varkkey IIMA

6. CASE STUDY: • POABS GREEN ENVIROTECH LTD. Prof.Biju Varkkey IIMA

7. The foundation stone Sir. C. P. Ramaswamy Iyer (Diwan* of Kerala (1936-1947), - heavily fined shop owners, if their customers spilled garbage (banana skins etc) into the streets. This is reflected even today, all the shops carry a tin case as refuse bin to keep their city clean ! (Source: www-2.cs.cmu.edu/afs/cs/user/vipin/www/trivandrum.html) *Diwan-Chief Minister Prof.Biju Varkkey IIMA

8. Runup to the project :- • Trivandrum the capital city had the distinction of being amongst the cleanest cities in India. • Lack of up gradation of public infrastructure, to suit city growth led to inefficiency in SW management . • The major landfill site in use had the location disadvantage of proximity to the international airport (Bird Hit/Security). • The entire process of collecting waste , cleaning roads and drains etc., were responsibilities of the corporation. • SC judgment on SWM • `Clean city movement’ was embarked on by the corporation. • Decided to set up a processing plant in the land owned by corporation the village. The proposed land was alongside a steep hill. • Technology - Undecided, but preference for aerobic decomposition by Excel Industries, Mumbai. • Floated open tender for SWM plant. Selection by a committee. Prof.Biju Varkkey IIMA

9. The Investor • Family owned group with interests in construction, farming etc. • Manages one of the largest organic farms in Kerala, with international market for products. • Familiar with the technology – with different inputs. • Saw the project as natural extension, part of international brand building for the organic products. Prof.Biju Varkkey IIMA

10. Technology: • Aerobic: In the presence of Oxygen, exothermic, without smell. • Bacterial Action. • Temp rises to 80C that neuteralises pathogens. • Needs undecomposed waste, organic only. Prof.Biju Varkkey IIMA

11. Getting the project through: • Project conceived on BOOT basis. After detailed feasibility study - estimated cost was Rs 90 million – decided to withdraw. • Soaps offered by corporation and GOK. • Pending bills to group on construction to tune of Rs 5 crore will be cleared, bypassing payment freeze. • Can pledge the land to banks if required. • GOK will buy fertilizer from the plant. • Priority in obtaining licenses/clearances. • Royalty of 2% of sales to corporation. • Rs 49000 per day (average of 10 days) penalty for • Corporation employees will transport the waste to company. • Company can reject waste, if it is not of quality. • Company keeps, waste resale realization – if any. • Agreed to Design alterations to customize the plant , like cover the plant with proper roofing to operate in wet climatic conditions in Kerala. Prof.Biju Varkkey IIMA

12. Plant construction • Company encouraged to start construction at earliest. • Plant constructed in record 5 months time, instead of proposed 18 months. • Capacity of plant 400 tonnes per day. • Corporation’s support systems (like buying lorries etc) notyet ready Prof.Biju Varkkey IIMA

13. Community Opposition – 1 • Did not want city waste in the village. • Protest against the corporation apprehending: • Land price decrease. • Smell and pollution of fresh water sources. • Social and environmental effects. Mitigation effort. • Corporation sponsored study tour to Vijayawada. Community Opposition - II. (after commissioning the plant) • Protest shifted against the company. • Air quality/health reasons/Water pollution. • Fly and birds. • Decomposed waste spilling over. (open trucks) • Social relationships. • Land price down. Prof.Biju Varkkey IIMA

14. Conflict resolution efforts. • Committee by District Collector never met till the HC/ombudsman intervened. • Agitation temporarily suspended after corporation agreed to transport garbage only in night. Agreed to treat the waste at source. • Buy more land from surroundings at market price/Employment to local people. • Community participation initiatives. Prof.Biju Varkkey IIMA

15. Fact finding missions. • Internal Study • Waste quality - already decomposed. • Corporation employees were against. • Resource constraint for corporation. (trucks/ untrained employees/equipment etc). • PCB interventions made the company to invest more • GOK appointed expert. • Problem at waste collection side. • Smell because of already rotten waste. • Company still working on generator. • Suggested community participation initiatives. Prof.Biju Varkkey IIMA

16. Problems observed in Different Stages:Generation & Collection • Waste mixed at source. • Quality of waste questionable. • Waste generators liability. 4. Problems with Collection (done by the corporation) • Lack of sufficient biological inoculates for sanitation. • Lack of training of corporation staff. • Corporation failed to collect the requisite amount of garbage as per agreement. (only daily average of 100 tonnes, max was 150 tonnes.) • Unchecked Scavenging at source. Prof.Biju Varkkey IIMA

17. Storage and Transportation Performed by corporation. • Intermediate storage and haul time leads to deterioration of waste quality. • Transportation and storage bottlenecks. • Environmental and social sensitivity during storage and transit. • Community Involvement – building cooperation with residents associations. • Involvement of self help groups. (charges the generator). Prof.Biju Varkkey IIMA

18. Processing and output marketing. • Suitability of technology and location of plant. • Problems in disposing accumulated contaminants particularly plastic and sand. • Awareness about organic fertilizer minimal. • Reluctance to buy the final product, causing the end inspite of Govt order. • Marketing strategy and capacity of the promoter. • Produce priced above average market rate. Prof.Biju Varkkey IIMA

19. Current Situation. • Approz 15000 tons of fertilizer accumulated. • Efforts for BOT restructuring by GOK. • Promoter ready to give back the project/sell. • Corporation owes Rs 5 crores to company as penalty. Prof.Biju Varkkey IIMA

20. Learnings: • Cost of Failure – first BOT project in Kerala. State trying hard to get out of image trap. • Concessions – rigor of analysis./Transparency. • Time for issues to resolve – don’t rush. • Unbundling, check the network effects. (unless upstream and downstream links are straightened.) • Local Community / User group interface with project. • Central v/s decentralised processing. • State Government Employees/Interest Groups. • Managerial ability of the promoter. • Choice of appropriate technology. • Appropriateness (aerobic v/s humid). • Recycling and reusing. Prof.Biju Varkkey IIMA

21. Whose responsibility is SWM? • Multi agency / stake holder responsibility. (helps, families, communities, schools, health, tourism departments etc.) • Sensitatisation of correct agents and incentivising. • Involvement of state employees – don’t reject them as inefficient – involve, incentivise. (let communities value them). • Appropriate choice of technology/method. Prof.Biju Varkkey IIMA

22. Current Situation: Plant is partially functioning. • The Poabs Group issue notice to the civic body announcing its decision to close down the plant from October 15, 2004. • Company demand a buy- back arrangement for the organic fertilizer made at the plant. (October 8, 2004, Business line ) • 15,000 tonnes of unsold manure accumulated on the factory premises over the last 30 months, preventing the intake of fresh garbage. • Later group announced to keep the plant open till October 30, following an assurance from the Mayor, that the problems would be resolved soon. (October 12, 2004, Business Line) • GOK working on BOT agreement, restructuring. Prof.Biju Varkkey IIMA