Public-private-partnership-for-solid-waste-management-services2

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1. Public–Private Partnerships for Solid Waste Management Services M. MASSOUD 1 M. EL-FADEL* Department of Civil and Environmental Engineering American University of Beirut PO Box 11-0236, Bliss Street Beirut, Lebanon ABSTRACT / The increasing cost of municipal solid waste (MSW) management has led local governments in numerous countries to examine if this service is best provided by the public sector or can better be provided by the private sector. Public– private partnerships have emerged as a promising alternative to improve MSW management performance with privately owned enterprises often outperforming publicly owned ones. In Leba- non, several municipalities are transforming waste management services from a public service publicly provided into a public ser- vice privately contracted. In this context, a regulated private mar- ket for MSW management services is essential. The present study examines a recent experience of the private sector partici- pation in MSW management in the Greater Beirut Area. The re- sults of a field survey concerning public perception of solid waste management are presented. Analysis of alternatives for private sector involvement in waste management is considered and management approaches are outlined. Public–private partnerships (PPPs) can be defined as the transfer and control of a good or a service currently provided by the public sector, either in whole or in part, to the private sector. It involves a wide range of private sector participation in public services and serves as a potential strategic management tool (Hutchinson 1996, Donaldson and Wagle 1995, US EPA 1999). The increased interest in PPPs can be at- tributed to: (1) improved performance of the public sector by employing innovative operation and mainte- nance methods; (2) reduced and stabilized costs of providing services by ensuring that work activities are performed by the most productive and cost effective means; (3) improved environmental protection by dedicating highly skilled personnel to ensure effi- cient operation and compliance with environmental requirements; and (4) access to private capital for infrastructure investment by broadening and deep- ening the supply of domestic and international cap- ital (Walters 1989, Van De Walle 1989, Ramanadham 1991, Sabra 1994, Jefrey 1996, Shami 1998, US EPA 1998). Municipal solid waste (MSW) management is a non- exclusive and nonrivaled service, that is, once it is pro- vided to some portion of the community, it benefits the overall public welfare and any resident can enjoy the benefit of the service without diminishing the benefit to anyone else. Generally, it is not feasible to exclude from service those who do not pay since public cleanliness and safe waste disposal are essential to public health and environmental protection. Being nonexclusive, nonrivaled, and essential renders MSW management a public service for which the local government is typi- cally responsible. This does not mean that local govern- ment has to accomplish the task entirely. It is important to note that privatizing some aspects of MSW services does not take away the need for local government to be fully responsible for these services. In this context, a number of financial and nonfinancial factors should be addressed in developing policies and strategic plans for private sector participation in MSW services. These in- clude but are not limited to: cost recovery, finance, economies of scale, cost, efficiency and public account- ability, institutional management, and legislation. The application of PPPs as a management tool re- quires active and continuous examination of rendered services to determine whether they are more appropri- ately and effectively performed by the private sector. The present study assesses the experience encountered to date with private sector participation in MSW man- agement in the Greater Beirut Area (GBA). In addition to the evaluation of the MSW system and financial performance, the public perception about services ren- dered by the private sector is also examined using a structured field survey. The study concludes with an analysis of alternatives for private sector involvement in waste management. KEY WORDS: Solid waste management; Public–private partnership; Lebanon 1 Current address: Environmental Health Department, Faculty of Health Sciences, American University of Beirut, Beirut, Lebanon. *Author to whom correspondence should be addressed; email: [email protected] DOI: 10.1007/s00267-002-2715-6 Environmental Management Vol. 30, No. 5, pp. 621– 630 © 2002 Springer-Verlag New York Inc.

10. annual southeastern regional solid waste symposium, Mo- bile, Alabama. Jefrey, G. 1996. How much privatization: a research note examining the use of privatization by cities in 1982 and 1992. Policy Studies Journal 24:632 – 640. Massoud, M. 2000. Privatization of waste management services in Lebanon: Solid waste and wastewater. MS thesis. Depart- ment of Civil and Environmental Engineering, American University of Beirut, Beirut. Ramanadham, V. V. 1991. The economics of public enter- prise. Routledge, London. Sabra, G. M. 1994. Privatization: the new trend with reference to Lebanon. MS project. Institute of Money and Banking, American University of Beirut, Beirut. Shami, L. A. 1998. Privatization in the ESCWA countries. MBA project. Graduate School of Business and Management, American University of Beirut, Beirut. Tchobanoglous, G., H. Theisen, and S. A. Vigil. 1993. Inte- grated solid wastes management. McGraw-Hill, New York. UNEP (United Nation Environmental Program). 1996. Inter- national source book on environmental sound technologies for municipal solid waste management. International Envi- ronmental Technology Center, Technical publication se- ries, issue 6. US EPA (United States Environmental Protection Agency). 1998. Cost-effective environmental management case study: Contract operations of the Belmont and Southport ad- vanced wastewater treatment facilities, Indianapolis, Indi- ana. EPA Environmental Financial advisory Board. http:// www.epa.gov.html US EPA (United States Environmental Protection Agency). 1999. A guidebook of fi nancial tools: Public-private partner- ship arrangements. http://www.epa.gov Van De Walle, N. 1989. Privatization in developing countries: a review of the issues. World Development 17(5):601 – 615. Walters, A. 1989. Liberalization and privatization: an overview. Pages 18 – 49 in Privatization and structural adjustment in the Arab countries. S. El-Naggar (ed.), Conference pro- ceedings, Abu Dhabi, United Arab Emirates, 5 – 7 Decem- ber. 630 M. Massoud and M. El-Fadel

3. to 15 years of civil unrest and the inef fi ciency of mu- nicipality employees. The end of the civil unrest and the semiprivatization of waste collection and transport activities marked the beginning of the improvement. Since its inception, the private contractor (Sukleen) has made impressive progress in strengthening its op- erating ef fi ciency. It has improved both collection and sweeping signi fi cantly. Its fi rst step was to implement an emergency investment program focusing on urgent re- pairs and rehabilitation throughout the system. Collec- tion, street cleaning, and transport of raw municipal waste recorded by far the most signi fi cant improvement to date. Before the period of civil unrest (1975 – 1990), refuse was collected once a day from each house. Dur- ing the war, solid waste collection equipment was either damaged or deteriorated due to aging and lack of Figure 2. Basic components of solid waste management in the GBA. Figure 3. Organizational framework of solid waste management in the GBA. Public – Private Partnerships for Waste Management 623

6. services and those previously offered by municipalities, and to indicate whether they consider the PPP a suc- cessful experience. A total of 500 questionnaires were distributed, of which 470 were completed and re- turned. The collected data were coded systematically and analyzed following a univariate statistical analysis, which comprises frequency distribution and percent- ages using the Statistical Package for Social Sciences (SPSS). Of fi cial Perception Most interviewed of fi cials (eight of nine) agreed that the private sector participation in MSW management gives the impression of ef fi ciency and thoroughness, and in spite of problems associated with the introduc- tion of a new service, waste is being removed and streets are clean. Regarding PPPs in general, opinions varied among those who view the process as an effective solu- tion, those who consider it not necessary, and those who prefer a joint venture. Advocates of a PPP consider it the most ef fi cient and economical solution since the private sector is more innovative. Moreover, they em- phasized that PPPs will attract capital and improve man- agement. They also consider it as a tool to improve economic performance, relieve the enterprise from po- litical interference, and introduce competition and ef- fi ciency. In contrast, opponents of the PPP believe that it is more important to establish capital markets and im- prove the performance of the public sector. In addi- tion, they consider PPPs to have a negative impact on employees and that a monopoly may arise through the ultimate transfer of ownership from the public to the private sector. Advocates of a partial PPP believe that it is an optimal compromise solution since the participa- tion of the public as well as the private sectors is antic- ipated. Note that most of fi cials stressed that at present there are political barriers against privatization in ad- dition to the absence of a capital market and a well- developed infrastructure. Table 3 presents a summary of the interviews conducted. Public Perception Generally, surveyed individuals are aware that a pri- vate company is responsible for solid waste collection in Table 3. Summary of conducted interviews Frequency Percentage Private contractor compared to municipalities Private contractor better 8 89 Municipalities better 1 11 Similar 0 0 No opinion 0 0 PPP of solid waste collection Successful 7 78 Unsuccessful 1 11 No opinion 1 11 PPP of other sectors Yes 8 89 No 1 11 No opinion 0 0 Cost per ton before and during the war No response 9 100 Barriers to PPP Political 9 100 Absence of a capital market 7 78 Well-developed infrastructure 7 78 Advantages of PPP Attract capital 7 78 Improve management 7 78 Improve economic performance 6 67 Introduce competition 5 56 Disadvantages of PPP Employee lay off 9 100 Monopoly 9 100 Table 4. Summary of survey results Frequency Percentage Collection method Excellent 156 33.1 Good 193 40.9 Satisfactory 95 20.5 Unsatisfactory 26 5.5 Ideal method of collection Municipality 179 38.1 Private company 253 53.8 No opinion 38 8.1 Knowledge of solid waste treatment Yes (aware) 158 33.6 No (not aware) 312 66.4 Treatment and disposal method Excellent 57 12.1 Good 97 20.6 Satisfactory 93 19.8 Unsatisfactory 41 8.7 No opinion 182 38.7 Private contractor compared to municipalities Private contractor better 179 38.0 Municipalities better 161 34.3 Similar 120 22.5 No opinion 10 2.2 PPP of solid waste collection Successful 365 77.7 Unsuccessful 87 18.5 No opinion 18 3.8 PPP of other sectors Yes 279 59.4 No 157 33.4 No opinion 34 7.2 626 M. Massoud and M. El-Fadel

8. tract. In contracting, the private fi rms are paid by local municipalities from general revenues or through money raised by direct user charges. Moreover, the service bill is typically part of a combined bill for a number of services such as water, electricity, and tele- phone. On the other hand, in a franchise system, private fi rms collect user charges from each household and establishment that receives private services. Thus, pri- vate fi rms must individually bear the cost of billing and collecting user charges, which is estimated at 10% of the total cost of service to the consumer. It is one of the reasons why franchise does not usually result in the same low cost as contracting. Apart from the concern of potential corruption in granting a franchise, it is more popular in large cities. Contracting appears to be a Table 6. Advantages and disadvantages to municipality of various MSW management alternatives Advantages Disadvantages Municipality (public ownership and operation) Less complicated fi nancing Assumes entire fi nancial risk Control of system Assumes entire environmental risk Potential for income from tipping fees Personnel ef fi ciency may be lower than private companies Retention of ownership of equipment and facilities when debt is paid Capital expenditures may take longer to process Money for solid waste services stays in the region System may be susceptible to political interference and short term bene fi ts MSW collection alternatives Contracting Can take advantage of private sector experience and ef fi ciency in operation Assumes entire fi nancial risk Retains some control over system Assumes most of the environmental risk Retain ownership of equipment and facilities when debt is paid Must manage the contract Necessary administrative oversight and enforcement Likely to result in the lowest collection cost Contractor fee is often collected from residents Franchise The government does not have to raise money to pay the private company Some residents will object to changing service providers Administrative involvement is minimized Private company may want the government or municipality to bear some risk for bad accounts Will result in lower costs for residents Will not result in the lowest collection costs MSW treatment and disposal facilities management alternatives BOO concession No up front capital costs to municipality, less, strain on the municipal budget Financial rewards occur to private owner, solid waste is a cost without potential for generating income, and tax dollars leave region Financial risk assumed by private owner Must share the environmental risks Private owner remains committed because of fi nancial investment Must manage contract, fi nancial dif fi culties and contract problems may hinder service Can take advantage of private sector experience and ef fi ciency in operation Once a municipality is out of the solid waste business it may be dif fi cult to get back which weakens negotiating position in the future More fl exibility in establishing management structure Do not own facility or equipment after debt is paid Less susceptible to political interference Loss of control over system BOOT concession Retain some control over system Will lose some control over system Private sector fi nance facilities Ownership will eventually be transferred over to the government Outline the fi nal condition in which the facilities must be presented to the local government at the time of ownership transfer Requires meticulously developed speci fi cations 628 M. Massoud and M. El-Fadel

2. The Lebanon Context The ever-increasing amount of solid waste genera- tion has created disposal problems for many develop- ing countries, and Lebanon is no exception. Refuse generation continues to increase with population and economic growth rendering waste management as one of a host of challenging development-related issues that the government is facing. Historically, refuse collection and disposal has always been the responsibility of mu- nicipalities. As is the case in many developing countries, most public enterprises in Lebanon are run with inad- equate attention to pro fi tability, cost control, or ef fi - ciency. The municipalities in particular are wasteful in their use of capital and labor, and this in turn leads to inef fi cient performance or even failure to meet the goals. They are generally characterized by operating de fi cits, causing a drain on public budgets, and over- staf fi ng, in many cases with relatives and others who lack skills and have little concern and real incentives for ef fi cient management. In addition to the lack of fi nan- cial resources, municipalities in Lebanon suffer from a lack of a quali fi ed and motivated human resource base that can ef fi ciently implement local development projects and use modern municipal planning and man- agement tools. Following nearly two decades of civil unrest, the municipalities have emerged weak administratively and fi nancially, and refuse collection equipment was either damaged or had deteriorated due to aging and lack of maintenance. Consequently, the municipalities were unable to continue providing a much-needed service, and until recently slow burning and uncontrolled dumping on hillsides and seashores have been the com- mon methods practiced for solid waste disposal in Leb- anon, resulting in serious land, sea, and air pollution problems. In the capital Beirut, most of the refuse was dumped in the sea, together with rubble and rocks, thereby encroaching on the seafront. Figure 1 depicts the basic components of MSW in the GBA before and during the war. Similar examples of serious adverse environmental impacts were encountered in almost ev- ery coastal city due to a general lack of an integrated solid waste management (ISWM) policy in the country. Of fi cial and public concerns about MSW has peaked in recent years, bringing about the closure of existing dumpsites and a great need to identify alternative meth- ods for the disposal of refuse, particularly from the GBA, where land is scarce and prohibitively expensive. Under these conditions, the Lebanese government em- barked on developing a national policy and manage- ment plan to fi nd a solution for the management of MSW. For this purpose, a private company was con- tracted to manage MSW generated in the GBA, includ- ing collection and street sweeping as well as the man- agement and operation of two processing plants, a composting facility, and two controlled land fi lls (El- Fadel and Khoury 2001). The management of the GBA waste represents a prototype of the comprehensive na- tional plan and consists of several components as de- picted in Figure 2. Public – Private Partnership Experience Organizational Framework At present, direct responsibility for MSW manage- ment in the GBA lies with the Council of Development and Reconstruction (CDR), and to a lesser extent, the Ministry of Environment (MoE), and the Ministry of Municipal and Rural Affairs (MMRA). As for the mu- nicipalities, their role is restricted to overseeing the work of the private company contracted for solid waste management services. Moreover, they are still respon- sible for refuse collection from public gardens, coasts, slaughterhouses, watercourses, and public and private obsolete lands. In its effort to ensure proper develop- ment and operation, CDR designated an independent consulting company (LACECO) to provide technical assistance to the Government through the supervision of the operator ’ s activities primarily the operation of the processing plants, compost facility, and land fi lls (Figure 3). Assessment of Solid Waste Collection and Transport For many years, the sight of scattered, misdisposed, and illegally dumped MSW was a common occurrence. The causes for this problem can be attributed primarily Figure 1. Basic components of MSW in GBA before and during the war. 622 M. Massoud and M. El-Fadel

4. maintenance. At the end of the civil unrest, authorities were therefore unable to collect the refuse generated in urban areas where the population had grown accus- tomed to taking their own waste in plastic bags and dumping it by the side of the road. Waste was collected daily when possible. Cleaning activities were mostly re- stricted to roadside cleaning along main roads due to lack of resources. Small roads were occasionally cleaned. Table 1 presents a summary of public (before and during the war) versus private (after the war) solid waste collection. Assessment of Waste Treatment and Disposal In contrast, sorting and processing facilities experi- enced several problems in their initial stages, such as lack of space, line overload, high organic content in end product, and odors, to name a few. These prob- lems are not unusual at the onset of operations and can be eliminated or minimized by increasing space and capacity handling, decreasing the waste fl ow rate into the process lines, ensuring even waste distribution into process lines to allow adequate time for the separation of bulky and recyclable items, increasing the number of hand pickers along the different stages of the process line, implementing proper equipment maintenance, and spraying odorants. Efforts to streamline facility operations are in progress and many of the problems have been remedied. However, the continuous increase in the wastestream is increasing the operational stress at these facilities, which will not be able to accommodate future waste generation rates without increased capac- ity. Initially, the composting process suffered from sig- ni fi cant odor emission problems and poor-quality com- post product. Odor emissions can be attributed to waste composition (low C/N ratio), poor temperature con- trol, excessive moisture, low oxygen content, and poor mixing. Considering that some of these parameters are often very dif fi cult to control continuously, occasional odor events are inevitable. Even when these parameters are well controlled, odor emissions will be reduced but not completely eliminated. The poor quality of com- post was due primarily to lack of space or system over- load in addition to the inef fi cient separation process of glass, plastics, and metals from the raw material at the compost site. The presence of glass particles in the fi nal product decreased its marketability. Corrective mea- sures undertaken included the installation of a bio fi lter for odor control and decreasing intake, as the facility is being used beyond design capacity. While the odor problem has been minimized, the compost quality needs more improvement for farmers to be satis fi ed and, more importantly, the market for the compost material generated remains weak. System Performance Evaluation The persistence of operational dif fi culties since the initiation of the emergency plan for solid-waste man- agement in the GBA warrants an evaluation of the appropriateness of its various components. As the sys- tem operates now, more than 90% of the total waste generated in the GBA has ultimately been disposed of at the land fi ll, calling into question the purpose of the sorting – processing – composting facilities as well as the recycling program. Apparently, the market demand for compost and recyclable materials may be either less than the generation rate or is not economically com- petitive. Lack of marketing plans for the fi nal compost product, poor accounting practices that neglect exter- nalities affecting the economics of composting, such as reduced soil erosion and avoided disposal costs, poor integration with the agricultural community, and min- imal land requirements are additional constraints on compost applicability and marketability. Thus, whether viewed as a hierarchy or as complementary compo- nents, the current waste management activities, partic- ularly recycling and composting, have not measured up favorably with the steps outlined in an ISWM system. Neither does the waste management system have an adequate education program that explains the costs of each component in the system or the bene fi ts that can be derived by recycling, reusing, and source reduction. Moreover, the dif fi culty associated with locating and approving a suitable site for land fi lling will only in- crease with time, which dictates the adoption of policies that will minimize the amount of waste that should be disposed of in a land fi ll. Recycling and composting can form a basic step in the right direction depending on the implementation and the market demand for the end product. Successful waste minimization through recycling, for instance, starts at the source. For this Table 1. Summary of public vs private solid waste collection Criteria Public a Private b Population (000s) 939 1,286 Waste generated (tons/yr) 239,761 347,349 Frequency of collection/ day 0 – 12 – 3 Collection method House-to-house Curbside Number of trucks 32 78 Number of trucks/100,000 persons 3.4 6.1 a Before and during the war. b After the war. 624 M. Massoud and M. El-Fadel

7. the GBA and most of them consider the collection method satisfactory to excellent and better than those previously provided by the municipalities. The majority perceives the PPP as successful and recommends simi- lar initiatives in other sectors (Table 4). The main complaints that were put forth by respondents about the current solid waste management system are sum- marized in Table 5 (Massoud 2000). Evidently, com- plaints were limited to collection services because the general public is exposed primarily to this activity. Very little is indicated about the fi nal treatment and disposal of the waste, which is not surprising given that the latter activities are con fi ned to smaller areas with minimal population exposure to actual processes. Analysis of Private Sector Participation Alternatives Limited fi nancial resources and the absence of in- centives to encourage high performance productivity translate into services that are often not as ef fi cient as they could be. Therefore, whether to adopt a PPP for a speci fi c aspect or portions of the public service, the government needs to weigh various risks and examine several criteria that deal with many market and humans factors that affect the ability of the private and public sectors to perform ef fi ciently and effectively. The de- sired ef fi ciency of a PPP will materialize only in situa- tions where competition, performance monitoring, and accountability exist. Predatory pricing, collusion, car- tels, unsafe labor practices, hidden subsidies, unneces- sary costs, and excessive risks are possible factors that are not unusual, particularly in developing countries. As such, it becomes important that a solid waste man- agement system be established within the appropriate regulatory framework. The system must be backed by suf fi cient authority, adequate fi nancing, ef fi cient oper- ating ability, and have the fl exibility to adapt to meet changing conditions. Within this framework, there are several public and private sector ownership and opera- tion options that can be implemented. However, cer- tain MSW management activities lend themselves well to being completely privatized, while in other cases a sound practice will almost always involve government control and operation. Considering that most of the MSW management expenditure is for collection (up to 75%) (Tchobano- glous and others 1993), this should be the fi rst service to examine for private sector participation arrange- ments that could reduce costs through improved ef fi - ciency. Moreover, because solid waste disposal and transfer systems are more capital intensive than collec- tion and sweeping systems, these could be examined for private sector participation as well, particularly a par- ticipation that could provide investment. In this con- text, contracting, franchising and concessions have been commonly practical in MSW (Cointreau-Levine 1994). Accordingly, contracting and franchising are examined as potential management alternatives for solid waste collection whereas concession arrange- ments, which involve build, operate, and own (BOO) and build, operation, own, and transfer (BOOT), are considered for waste treatment and disposal facilities. Table 6 summarizes the advantages and disadvantages to a municipality of such MSW management practices. The greatest opportunity to involve the private sec- tor lies in having fi rms provide collection service under contract with local municipalities. It is feasible for local fi rms with modest fi nancial resources to enter into the business of solid waste collection. Contracting is a via- ble means of securing service as long as it is possible to adequately describe outputs anticipated from the con- Table 5. Respondents ’ problems regarding refuse collection by the private sector Complaint Respondents ( N ) Percentage of total Containers without lid and not in proper places 251 53.4 Foreign employees 268 57.0 Monopoly 102 21.7 Traf fi c problems, especially in the morning 122 26.0 High price (increase in taxes) 95 19.4 PPP is pushing down sorting and recycling 73 15.5 No quality control and equity in service 71 15.1 No collection from houses 112 23.8 Wrong timing 145 30.9 Process of emptying containers is noisy 45 9.6 Smell and cleanliness of containers 98 20.6 Containers occupy space (less parking space in the neighborhood) 94 20.0 No problems 69 14.7 Public – Private Partnerships for Waste Management 627

5. purpose, while education and awareness programs have been commonly reported in academic media as in fl u- encing factors, it is more likely to succeed when cou- pled with the creation of individual monetary incen- tives and a marketplace. Similarly, composting, in all its possible methods, requires special systematic maintenance and monitor- ing skills, analytical characterization technology, and a market for the end product. While technical skills and technology are becoming more available in Lebanon (or can be imported), a market for the end product of composting has not been clearly de fi ned. More impor- tantly, the location of a compost facility plays an impor- tant role in the decision on whether to construct such a facility. For instance, it is highly undesirable to locate a compost facility near densely populated urban areas and far from areas where the end product will ulti- mately be used. In this respect, the present sorting – processing – composting facilities are located in the im- mediate vicinity of highly populated and residential areas. While it is acceptable (with reservations) to lo- cate a sorting – processing facility in such areas, it is certainly not recommended to operate an open-system composting facility in such proximity to residential ar- eas due primarily to potential odor nuisances that can- not be completely eliminated even in the presence of odor control equipment. Indeed, operations at the present composting facility started only on a temporary basis until a more suitable location was identi fi ed, which did not happen. Therefore, other waste minimi- zation alternatives such as properly managed and well- controlled incineration must be considered despite the legacy of uncontrolled incineration practices in Leba- non that has apparently resulted in the elimination of this option in the fi rst place. While this option does not completely eliminate the need for a land fi ll because of ash generation, it mini- mizes the amount of end waste that should be disposed of in a land fi ll and hence the need for land is kept at a minimal level that can indeed be sustainable in the long term. Such a plan is being practiced in many developed countries, especially where land is scarce or prohibitively expensive. The limited amount of suitable land available in Lebanon for land fi lling, particularly along the coastal region, creates the necessity for con- sidering the incineration alternative. It is certainly not sustainable to continue with the same policy of locating new land fi lls in the future (El-Fadel and Chahine 1999). While performance quality is a key factor when eval- uating public versus private solid waste services, cost is equally important. The duration of a collection con- tract is fi ve years, and the contractor is paid on the basis of weight collected, with an approximate cost of US$16/capita/y, which is consistent with average costs in low- and middle-income countries (Table 2). Field Surveys As is the case in many developing countries, data on solid waste management in Lebanon is generally lim- ited. Therefore, fi eld surveys were adopted to comple- ment available published data. Interviews were con- ducted with responsible authorities outlined in the organizational framework (Figure 1). Interviewed indi- viduals (a total of nine) represented a cross section of key decision-makers or in fl uential stakeholders in the solid waste sector. The questions were designed partic- ularly to address the feasibility of PPPs for MSW man- agement. Questions emphasized the level of satisfaction with current services compared to those previously pro- vided by the municipalities, present and past expenses, attitude with regards to the partnership experience, barriers, and advantages and disadvantages of the pri- vate sector participation. In addition, a fi eld survey was conducted in an at- tempt to evaluate the public perception of MSW man- agement services and the level of satisfaction with the quality of current services. Screening interviews with a small sample preceded the survey to de fi ne appropriate questions and issues that are potentially important to residents. Then, a more comprehensive survey ques- tionnaire was developed and distributed to nongovern- mental organizations (NGOs) and individuals in the Beirut area. Individuals were selected randomly to in- dicate their opinion about the quality of solid waste collection and treatment, to compare between current Table 2. Cost of MSW management services in Beirut Population (000s) a 1,286 Generation rate (kg/capita/day) b 0.74 Waste generated (tons/yr) c 347,349 Total cost (collection and sweeping in US$) c 20,575,000 Cost per capita (US$/yr) 16 Cost per ton (US$/yr) 59 Low income country d Cost per capita (US$/yr) 3.6 – 7.2 Cost per ton (US$/yr) 45 – 90 Middle income country d Cost per capita (US$/yr) 10.8 – 25.2 Cost per ton (US$/yr) 90 – 210 a ERM (1995). b Ayoub and others (1996). c El-Jor (2000). d UNEP (1996). Public – Private Partnerships for Waste Management 625

9. more feasible option for Lebanon, considering that it results in the lowest collection cost, is a common prac- tice in many communities, and a good model already exists. Moreover, contracting can be a good way to obtain services needed for a limited period of time, acquiring specialized skills not available in the munici- pal pool of employees, or as a way of introducing com- petition into the governmental services arena. It may also help to reveal inef fi ciencies of the government monopoly. An additional reasons to begin involving private companies through contracting is that there are no long-term impacts from any wrong-doing of the private fi rm. Regarding waste treatment and disposal facilities, concession agreements provide a reasonable option. BOOT arrangements provide means of having the pri- vate sector fi nance facilities whose ownership will even- tually be transferred to the government. More impor- tantly, these agreements outline the regular maintenance requirements that the private sector must provide to the facilities, as well as the fi nal condition in which the facilities must be preserved at the time of ownership transfer to the local government. Without such speci fi cations, it is anticipated that the facility would have a planned obsolescence matching the schedule for transfer. A BOO agreement also provides means of fi nancing major investment projects; however, the private partner does not eventually transfer ownership of facilities to the government. Completely getting out of the owner- ship and operation of solid waste services and facilities may reduce or eliminate the possibilities of getting back into the business if a municipality would want to at some time in the future (i.e., no staff, no equipment, no facility, and no experience would make it hard to begin again). Besides, such agreements put the munic- ipality in a weak negotiating position. Taking into ac- count the lower risks in implementing BOOT projects, it is favorable to adopt such practices for waste treat- ment and disposal facilities in developing countries. Conclusion In Lebanon, considering that municipalities lack fi - nancial resources as well as a quali fi ed and motivated human resource base, public – private partnerships for MSW management services in the GBA lead to in- creased performance ef fi ciency and environmental protection enhancement. The greatest opportunity to involve the private sector lies in having fi rms provide collection services under a contract with the local gov- ernment since it results in the lowest collection cost, is a common practice in many communities, and there are no long-term impacts from any wrong-doing of the private fi rm. Concession agreements provide a reason- able option for waste treatment and disposal facilities. However, it would be desirable for analysts, policy-mak- ers, and practitioners to evaluate the environmental obligations to be met by privatized enterprises, establish detailed impacts of monitoring plans of PPPs, develop performance indicators, and conduct a cost – bene fi t analysis to assess the difference between the various forms of PPPs and de fi ne the least expensive and most effective option. A legal framework, allowing the wid- ening of ownership, preventing its concentration, and encouraging competition, must be devised. In this con- text, competitive tendering and complete transparency particularly with regards to fi nancial accountability are essential elements. Acknowledgments Special thanks are extended to the United States Agency for International Development for its support to the Environmental Engineering and Science pro- grams at the American University of Beirut. Literature Cited Ayoub, G., A. Acra, R. Abdallah, and F. Merhebi. 1996. Fun- damental Aspects of Municipal Refuse Generated in Beirut and Tripoli. Technical Report, Department of Civil and Environmental Engineering, American University of Beirut. Cointreau-Levine, S. 1994. Private sector participation in mu- nicipal solid waste services in developing countries. UNDP/ UNCHS/World Bank, Urban Management Program. Donaldson, D., and D. Wagle. 1995. Privatization: Principles and Practice. International Finance Corporation, World Bank. http://www.worldbank.org El-Fadel, M., and W. Chahine. 1999. An integrated solid waste management system for the Greater Beirut Area. 526 – 534, ICSW-99-000 1st international conference on solid waste, Rome, 7 – 9 April. El-Fadel, M., and R. Khoury. 2001. Municipal solid waste management in Lebanon: Impact assessment, mitigation, and the need for an integrated approach. Technical report, FEA-CEE-2001-01, United States Agency for International Development (USAID), American University of Beirut, Leb- anon. El-Jor, N. 2000. Regional study on policies and institutional assessment of solid waste management in Lebanon. CE- DARE/UNEP/Blue Plan. ERM (Environmental Resource Management). 1995. Assess- ment of the state of the environment and identi fi cation of policy options. Technical report, Council of Development and Reconstruction. Hutchinson, R. 1996. Successfully privatizing solid waste ser- vices. Pages 229 – 251 in Proceedings of the SWANA ’ s 6th Public – Private Partnerships for Waste Management 629

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