S Shariq Ahmed

SOLID WASTE MANAGEMENT

INDIA
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 S Shariq Ahmed

• SOLID WASTE MANAGEMENT IN INDIA

SOLID WASTE MANAGEMENT IN INDIA

 S Shariq Ahmed

The Urbanising World

• The 20th Century began with a population of 2 billion which increased to 6

billion population by the end of the century.

• The Century also witnessed the biggest exodus of human population from
Rural to Urban areas

• The global urbanisation level increased from 10% to 50% during the century;
The world has turned urban with more than half the population living in
urban areas
 S Shariq Ahmed
Extra-ordinary Urban Growth in Less
Developed Countries
• 600 Million people added to the world’s urban population between 1990-2000

• Close to 3 million people are added in Asia alone every month, i.e. equivalent
to one new City a month

• Of the 21 mega cities (popln. 10 million+) in the world today, 17 are estimated
to be in developing countries
 S Shariq Ahmed

World Population Trends

Population in and developing (lesser developed) countries to be 88% of total
population by 2050 (in millions)
10000
9300
9000
8000
6883 8200 (88%)
7000
6100
6000
5667(82%)
5000
4900(80%)
4000
3000
2000
1000
0
2000 2010 2020 2030 2040 2050
Source: UN Population Division; WORLD POPULATION PROSPECTS
Population Reference Bureau: WORLD POPULATION DATA SHEET
 S Shariq Ahmed

Urbanisation Scenario in India

Decadal Growth Rate of Population (1991-2001) Urban: 31.13% Rural 17.97%
1500
Total Urban 1350 M

1200
1 March, 2001,
11 May, 2000, 1000 M
900

600 459 M
366.3
(34%)
330 M 361 285.35 (31.13%)
217.61
300 (27.78%)
(25.71%)
50 M (16%) 62(17%)
0
1947 1951 1961 1971 1981 1991 2001 2011 2021
 S Shariq Ahmed

Urbanisation Scenario in India

• India’s Population = 1027 Million

As per 2001 Census

• Urban Population = 285 Million

• Urban Areas = 5161

(Cities / Towns)
 S Shariq Ahmed
India: Urbanisation Scenario
Metropolitan Cities/Agglomerations

80
No. of Cities/Agglomerations with more than
1 Million Population
60

40
53 70
35
20 (37.8 % )
23
9 (33.0 % )
0 5
1951 1971 1991 2001 2011 2021
(Projected)
)
No.of Class-I Cities(> 1 Lakh) - 300 (1991)
% of Urban Population - 65%
 S Shariq Ahmed

Trend Of Urbanization

Year Year Year Year

1951 1991 2001 2021

• Number of Urban 2795 3768 5161 --

Agglomerations / Towns

• Urban Population 62.0 217.0 285.0 550.0

(in million)

• As percentage of total 17.3% 25.72% 27.8% 41%

Population
 S Shariq Ahmed

Magnitude Of Problem

• Per capita waste generation increasing by 1.3% per annum

• With urban population increasing between 3 – 3.5% per annum

• Yearly increase in waste generation is around 5% annually

• India produces 42.0 million tons of municipal solid waste annually at present.

• Per capita generation of waste varies from 200 gm to 600 gm per capita / day.
Average generation rate at 0.4 kg per capita per day in 0.1 million plus towns.

• Collection efficiency ranges between 50% to 90% of the solid waste generated.
 S Shariq Ahmed

Magnitude Of Problem

• Urban Local Bodies spend around Rs.500/- to Rs.1500/- per ton on solid waste
management of which,

– 60-70% of the amount is on collection alone

– 20% - 30% on transportation
– Hardly any fund is spent on treatment and disposal of waste

• Crude dumping of waste in most of the cities

 S Shariq Ahmed

Quantity Of Waste Generation

1.15 lakh tonne

Total quantity of solid waste generated in urban areas of the country
per day (TPD)
% Of total
garbage
Waste generated in 6 mega cities 21,100 TPD 18.35%
Waste generated in metro cities
19,643 TPD 17.08%
(1 million plus towns)
Waste generated in other class-i towns
42,635.28 TPD 37.07%
(0.1 million plus towns)
83,378.28 TPD 72.50%

If waste produced in all class-i cities is tackled, percentage of waste scientifically managed
would be 72.5% of total waste.
 S Shariq Ahmed

Generation Of MSW(MT/Y)
 S Shariq Ahmed

Types Of Solid Waste

• Solid waste can be classified into different types depending on their source:

– Household waste or municipal waste: includes food, paper, cardboard,

plastic, textiles, leather, glass, metal, ashes, electronics waste etc.

– Industrial waste: includes toxic chemicals, oil, debris from construction site,
packaging waste, ashes etc.

– Biomedical waste or hospital waste: medicine bottles, expired medicines,

syringes, medical instruments such as scissors, blades etc.
 S Shariq Ahmed

Types Of Solid Waste

• Solid waste can be classified into different types depending on their source:

– Agriculture waste: includes pesticides, crops, water coming from the fields
also consists of small amount of toxic chemicals.

– Nuclear waste: includes radioactive substances coming from reactors, fuel

(uranium, thorium, plutonium etc). Its highly dangerous and requires proper
disposal.

– Hazardous waste: includes toxic chemical, acids, corrosive, ignitable and

reactive materials, gases etc.
 S Shariq Ahmed

Classification Of Wastes According To Their

Properties

• Bio-degradable
– can be degraded (paper, wood, fruits and others)

• Non-biodegradable
– cannot be degraded (plastics, bottles, old machines, cans, containers and
others)
S Shariq Ahmed
 S Shariq Ahmed

Solid Waste Composition

 S Shariq Ahmed
Characteristics Of Municipal Solid
Waste
Compostable / Bio-degradable matter = 30% - 55%
(can be converted into manure)

Inert material = 40% - 45%

(to go to landfill)

Recyclable materials = 5% - 10%

(Recycling)

These percentages vary from city to city depending on food habits

 S Shariq Ahmed
Physical Characteristics of typical
Municipal Solid Waste in India
Contents Available in %
Paper 4.68
Plastics 0.71
Metals 0.64
Glass 0.45
Ash and Fine Earth 40.03
Total Compostable matter 38.75
 S Shariq Ahmed
Physical Characteristics of typical
Municipal Solid Waste in India
Characteristics % availability
Moisture content 25.2
Organic matter 23.4
Carbon 13.08
Nitrogen 0.58
P as P2O5 0.66
K as K2O 0.70
 S Shariq Ahmed
Composition of urban solid waste in
Indian cities
 S Shariq Ahmed
PRESENT STATUS OF WASTE
MANAGEMENT
• Storage of waste at source is lacking

– Domestic waste thrown on streets

– Trade waste on roads / streets
– Construction debris left unattended
– Bio-medical waste disposed in municipal waste stream
– Industrial waste disposed of in open areas

• Segregation of recyclable waste at source not done

• Primary collection of waste not done at place of generation

 S Shariq Ahmed
PRESENT STATUS OF WASTE
MANAGEMENT
• Design & location of municipal waste storage depots in appropriate, resulting
in littering of garbage.

• Street sweeping not done everyday

• Waste transportation done in open vehicles

• Waste processing partially practised in 35 ULBs only

• Final disposal done through crude dumping

• Rag pickers collect recyclables from municipal bins/dumpsites and litter the
waste causing insanitary conditions
 S Shariq Ahmed
Reasons For Improper Management
Of Waste
• Lack of planning for waste management while planning townships
• Lack of proper institutional set up for waste management, planning and
designing in urban local bodies
• Lack of technically trained manpower
• Lack of community involvement
• Lack of expertise and exposure to city waste management using modern
techniques / best practices
• Lack of awareness creation mechanism
• Lack of Management Information Systems
• Indifferent attitude of ULBs to levy user charges and sustainability
 S Shariq Ahmed

Urban Infrastructure Scenario in India

• According to estimates of the Rakesh Mohan Committee total requirement

for urban infrastructure development covering backlog, new investments and
O&M costs for the next ten years is Rs. 2,50,000 Crores (US$ 57 Billion)

• The ninth Plan proposal identifies only around Rs. 12000 Crores. With
anticipated growth in Tenth plan providing additional funds of Rs.13,000
Crores, the total expected plan outlay comes to Rs. 25,000 Crores (US$ 5.7
Billion).
 S Shariq Ahmed

Initiatives By Government Of India

• Bio-medical Waste Handling Rules, 1998 - Notified

• Municipal Solid Waste Management Rules, 2000 – Notified.

• Reforms Agenda (Fiscal, Institutional, Legal)

• Technical Manual on Municipal Solid Waste Management

• Technology Advisory Group on Municipal Solid Waste Management

• Inter-Ministerial Task Force on Integrated Plant Nutrient Management from

city compost.
 S Shariq Ahmed

Initiatives By Government Of India

• Tax Free Bonds by ULBs permitted by Government of India

• Income Tax relief to Waste Management agencies

• Public-Private Partnership in SWM

• Capacity Building

• Urban Reforms Incentive Fund

• Guidelines for PSP and setting up of Regulatory Authority

 S Shariq Ahmed

Initiatives By Government Of India

• Introduction of Commercial Accounting System in ULBs & other Sector Reforms

• Model Municipal Bye-Laws framed / circulated for benefit of ULBs for adoption

• Financial Assistance by Government of India - 12th Finance Commission Grants

 S Shariq Ahmed

Financing of Infrastructure Schemes

• Budgets of
– Central Government
– State Governments
– Local Governments

• Raising loans from LIC and other Financial Institutions

• Loans from International Funding Agencies like OECF(JBIC), World Bank, ADB,
KfW, USAID, etc.

• Grant funds from Donor Agencies like DANIDA, DFID, CIDA, National Trust/
Missions

“Every One Crore rupees spent in infrastructural provision now, saves Ten Crore
on cost escalation and public health care due to deficient services later!”
 S Shariq Ahmed
Some Innovative ‘User pay’
Instruments
Infrastructure Type Innovative user pay Instruments
Advance registration charges, Connection charges,
Enhancement of water tariff, Water benefit tax/water tax,
Water Supply Betterment charges, Development charges, Utilization
from other sources such as octroi, property tax, sale of
plots etc. and Charges from water Kiosks
Connection Charges, Sewerage Cess Tax, Conservancy Tax,
Sewerage Sale of Renewable waste, Sale of Sludge and Sale of
Nutrient rich wastewater.
Collection Charges, Cess, Sale of Renewable waste, and
Solid waste
Fines for dumping waste.
 S Shariq Ahmed
Increased emphasis on Private Sector
Participation in Urban Infrastructure
• The imperative need for Private Sector Participation for:

– Extended Resources

– State-of-the-art Technologies

– Efficient Project Management / Maintenance

 S Shariq Ahmed

National Urban Renewal Mission

• CENTRAL / STATE GRANTS ARE PROPOSED TO BE PROVIDED FOR SOLID WASTE

MANAGEMENT

Grant Loan
Centre State
Cities with 4 million plus population 35% 15% 50%
Cities with one million plus population
50% 20% 30%
but less than 4 million
Other cities 80% 10% 10%
 S Shariq Ahmed

Route to Private Sector Participation

• The concept of Public-Private -Partnership is generally seen as one of these

models:

– Build-Operate-Transfer (BOT)
– Build-Operate-Own-Transfer (BOOT)
– Build-Operate-Lease-Transfer (BOLT)
– Rehabilitate-Operate-Transfer (ROT)
– Design-Build-Finance-Operate-Transfer (DBFOT)

• In INDIA full blown Private Sector Participation models have not been put into
place, so far
 S Shariq Ahmed
Options for Private Sector
Participation (PSP)
• However, the various options available, in order of increasing Private
Participation in Water Supply & Sanitation Projects being taken up are:

– Service Contracts
– Management Contracts
– Lease
– Concession

• With experience and later on, through

– BOT/BOOT etc.
– Divestiture
 S Shariq Ahmed
Private Sector Participation in Water
Utilities - Manila Experience
• Successful involvement of Private Sector in Power Generation and Distribution;
Largest effort in privatisation of Water utilities.
• Metropolitan Water Works and Sewerage System (MWSS) had covered only
67% population with intermittent water supply and 8 % with sewerage system
in 1994.
• 56 % of 3000 mld supply was non-revenue water
• MWSS privatised in 1997 and split into two.
• Manila divided into two Zones - East and West.
• Two Consortia led by - BENPRES for West and AYALA for east -selected to run
water works on 25 year franchise; Both Groups offered rates lower than the
prevalent rate (8.78 pesos)
 S Shariq Ahmed
Private Sector Participation in Water
Utilities - Buenos Aires Experience
• National Public Company OSN was in charge of water & sewerage.
• Unaccounted-for water was about 45% of production
• Objective of PSP: To reduce Government burden and minimise the price for
service delivery
• Privatised in 1993 - Through Concession, thus effectively keeping the fixed
assets under Public Ownership
• Single private firm to operate on 30 years concession period to be revived by
re-bidding later
• Responsible to operate and maintain fixed assets and expand coverage and
guarantee water quality
• Pricing to incorporate subsidy already existing, first price review after 5 years
 S Shariq Ahmed

Improvements in Water and Sanitation Services

after Awarding the Concession in Buenos Aires

Indicator Before the December 1995 Percentage change

Concession (1992) (%)
Production
capacity (millions 3.4 4.3 27
cum/ day)
Population
served(M)
Water 6.0 6.5 8.8
Sewerage 4.9 5.3 6.4
Employees per
7,450 4,250 -43
1,000 connections
Response time for
180 48 -73
repairs (hours)
Meters in service 30,000 170,000 460
 S Shariq Ahmed
Private Sector Participation in Water
Utilities - Buenos Aires Experience
• Reasons for success :

– Comprehensive and transparent bidding process - Two Envelope System

– Independent Regulatory Agency established by Government to monitor
concessionaire, enforce the terms of contracts and regulatory specifications
and levy fines where necessary
– Contract had provision for adjustment and re-negotiation during
enforcement of concessional period (after 2 years the initial reduction of
tariff partly withdrawn in view of more capital investment on system
improvement, than originally estimated)
– Re-negotiation : transparent and stakeholders involved
– Tariff policy had a fixed portion to cover cost of infrastructure and a variable
part proportional to consumption
 S Shariq Ahmed
Indian Experience in Privatisation of
Water Supply & Sanitation
• Tiruppur Water Supply and Sewerage Project

– Implemented through a SPV New Tiruppur Area Development Corporation

(NTADC) promoted by
• Infrastructure Leasing & Financing Services(IL&FS)
• Tiruppur Exporter’s Association (TEA)
• Tamil Nadu Corporation for Industrial Infrastructure Development (TACID)

• Estimated Project cost - Rs. 900 Crores at 1998 prices (Rs. 1000 crore at
present).

– O&M contract to consortium of

• Mahindra & Mahindra + United Utilities International,
• North West Water +Bechtel
• Attained financial closure with 10% stake by LIC & GIC.
 S Shariq Ahmed
Indian Experience in Privatisation of
Water Supply & Sanitation
• Pune Water Supply and Sewerage Project -
– Developed by Pune Municipal Corporation at a estimated project cost of Rs.
750 crores ($ 187.5 M) later revised to Rs. 392 Crores with HUDCO
assistance
• Private Sector Participation envisaged in Construction, Operation and
Maintenance, Tariff collection
• Financial Participation in addition to HUDCO expected from IL&FS, ICICI,
HDFC, IDFC and Bank of Maharashtra
• Request for proposal sought
• Tie-ups: Anglian Water + Trafalgar House & Shirkes
Binnie Black + Veatch & Thames Water + L&T
Krugger + Generale Des eaux & Shanska Int.
Preussag + Tata Projects
Hyundai + Sundram Chemicals
Hanjin + Krupp and Zoom Development Group
• Political Risk - work re-tendered at RfP level
 S Shariq Ahmed
Indian Experience in Privatisation of
Water Supply & Sanitation
• Bangalore Water Supply Project
– BOOT arrangement for sourcing 500 mld water.
• Establishment of two Tertiary Water Treatment Plants (of total 60 mld
capacity) with HUDCO assistance
• Private Sector (Industries) to undertake laying of feeder mains
• envisages provision of 500 mld of water to the city on a BOT basis with
estimated project cost is Rs. 800 Crores (US$ 173 M).
 S Shariq Ahmed
Indian Experience in Privatisation of
Water Supply & Sanitation
• Chennai Metro Water
– Out of 119 Sewerage Pumping Stations, Operation & Maintenance of 70 by
private sector
– Sourcing of water in 7 wells through private sector
– Construction of 300 mld Water Treatment Plant by - M/s Hindustan Dorr
Oliver Ltd. And O&M by M/s Richardson Cruddas
– New Chembarampakkam WTP of 530 mld capacity (over and above the
existing 600 mld capacity)
• Bid documents for BOT by TCS
 S Shariq Ahmed
Indian Experience in Privatisation of
Water Supply & Sanitation
• Private Sector Participation on the anvil in water supply & Sanitation
– Nagpur - Dewas
– Kolhapur - Cochin
– Vishakhapatnam - Dharwad
– Goa - Alandur

• Karnataka Urban Water Supply and Drainage Board (KUWS&DB) for

Management Contract in Distribution and O&M

• Towns Selected for the initiative are

– Mysore - Mangalore
– Hubli – Dharwad - Gulbarga
 S Shariq Ahmed
Privatisation experience in India in
Solid Waste Management
• ENBEE Infrastructure Ltd. on BOO basis in Nagpur

• M/s Excel Industries –

– Bio-degradation of solid waste in
• Vijayawada, Calcutta, Mumbai, Bhopal, Bangalore, Gwalior, Cochin &
Calicut

• M/s CELCO in Hyderabad

• Common hospital waste treatment plant by GJ Multiclave in Hyderabad

• Compost plant by IVR Enviro at Tiruppur

 S Shariq Ahmed
Important issues in a BOT
arrangement
• Who are the parties to the contract ?
• What are the objects and scope of the BOT arrangement?
• What is the duration that might lead to early termination?
• What are the obligations of the BOT operator ?
• What are the obligations of the guarantor ?
• What are the key regulatory provisions ?
• How will the key risks be managed ?
• How will performance be measured and monitored ?
• How will the assets be transferred to the BOT operator?
• What are the consents required ?
• Who will be responsible for environmental liabilities ?
• How will disputes be resolved ?
 S Shariq Ahmed
Countdown Steps for Structuring
Private Sector Participation
• Process Structuring and Stages – countdown

– 09 Expression of Intent by Public Agencies

– 08 Firming up the Project Contours (Consultants)
– 07 Short-listing of Private Parties
– 06 Project Description Report
– 05 Pre-qualification of existing bidders
– 04 Issue of Request for Proposal (RFP)
– 03 Evaluation of Bids
– 02 Negotiations
– 01 Award of the Contract (Financial Closure)
– 00 Commencement of Work
 S Shariq Ahmed
Evolving Appropriate
Organisational/Institutional Mechanisms
• Legal and Regulatory Framework

– Simplification of Legislation
– Techno -Legal Regime (Australian Utilities Commission, U.K. initiatives-
OFTEL, OFWATS)
– over-arching legislation in the line of Federal Law of Philippines (BOT,
BOO,etc)
– State/City Level Regulatory Bodies in India
– CERC / SERC in Power Sector
– TRAI (set to become CCI) in Telecom / ICE sector
– NHAI in highways sector
– Need for similar regulators in Urban Infrastructure
 S Shariq Ahmed
Urban Infrastructure - Regulatory
Authority

Utility & Users

Shareholders

Political
Authorities
 S Shariq Ahmed

The Regulatory Mechanism

• Regulate prices
• Promote operating efficiency
• Specify and monitor service standards
• Control externalities
• Maintain public good functions
• Ensure asset serviceability
• Ensure development of essential infrastructure
• Prevent manipulation of land values
• Prevent unfair trade practices
• Promote efficient use
• Ensure responsiveness to final customer needs
 S Shariq Ahmed

Model BOT Laws

• Gujarat Infrastructure Development Act – 1999

– First State to formulate a separate act
– Draws from the experiences in Philippines

• Authorises the Govt./agencies to enter into concession agreements

• Provides a list of various forms of assistance to be provided to the developer

including exemption of taxes etc.

• Competitive bidding mandatory for ensuring transparency

• The concession agreement to prescribe the user fee to be charged by the

developer

• Need for replication in other States

 S Shariq Ahmed

Infrastructure Authority

• Infrastructure Authority formed under Infrastructure Development Enabling

Act (IDEA), Andhra Pradesh
• Envisaged Roles for Infrastructure Authority:
– Conceptualisation of projects - Processing of the projects
– Mobilising public opinion - Advisory role to the government
– Co-ordination - Monitoring / approval of bidding
– Implementation of P-P-P-P - Prioritisation of projects
– Preparation of schedule. - Approval of TOR for consultancy
– Budgeting / financial allocation - Expedite clearances and permits
– Tariff fixing, user/abuser charges and cost recovery
– Model contract principles
– Supervision over implementation and project management
• Proposes a “Swiss Challenge Approach” for evaluating the single bid for
projects brought by proprietary agencies
 S Shariq Ahmed

Financing Options Matrix

Characteristics of
S. Infrastructure Issue(s) Options/ Alternatives
No
Projects
• Multilateral financing
Scarcity of
1 Capital intensive • Consortium/Syndication
Resources
• Federal Govt. Guarantee with financial support
• Take out financing
Long Gestation Asset Liability
2 • Long Term Borrowing
period Mismatch
• Securitisation of receivables
Working Capital Overlapping of • Flexible financing delinking construction stage
requirements project from
3
based on implementn post-construction phase
Project Phasing schedules • Cash flow financing
• Tax Incentives
• Priority Sector Lending
Inadequate High cost of • Sub-ordinate debt finance
returns and funds,
4 • Firm tariff policy
uncertainty on Defaults/NPA
returns risk • Escrow Accounts
• Power Purchase Agreements
• Sinking funds
 S Shariq Ahmed

Financing Options Matrix

Characteristics of
S. Infrastructure Issue(s) Options/ Alternatives
No
Projects
Interest rate & • Interest Rate Swap
Long Term
5 Currency • Forward Rate Agreements
borrowing
fluctuations • Floating Interest Rates
Multiple debt • Sub-ordinate debt financing
High debt
6 servicing • Equity infusion from strategic partners
equity ratio
obligations
Lack of tangible Realization of • Letters of comfort
7
assets and loan amount • Pari passu charge on Escrow Account
collateral/securi on liquidation • Bank Guarantees
ty or default
Lack of • Joint Ventures
Varied expertise
appraisal & • Special Purpose Vehicles
8 and advanced
operational
technology
skills
Pioneering Risk of • Venture Capital Funds
9 nature / en masse • Project Initialisation Funds
Feasibility risk deployment
 S Shariq Ahmed
Consortium financing /
Group lending
• For capital intensive projects and greenfield ventures beyond lending capacity
of single financial institution
• Pooling of resources for funding the project.
• Ensures sharing of the risks involved.
• Needs rationalisation and standardisation of appraisal procedures, lending
guidelines and legal documentation of the constituent financial institutions
• Need for pari passu charge on the escrow account as security to the partner
institutions.
• Desirable to provide a single window facility based on tripartite or joint
agreements with the borrowing agency.
 S Shariq Ahmed

Takeout Financing

Transfer of Loan Fees / Commitment • Liabilities of primary lender on

Accounts Charges project absolved at the end of a
specified period
• Partner institution transfers
Primary pertinent loan accounts to its own
Partner Institution books, in lieu of an agreed fee or
Lender
commitment charge.
• Both parties bear the project risks
after the take-out based on a non-
Outstanding Loan Amt.
(Principal + Interest) recourse structure.
5 years 10 years • Pari passu charge on the escrow
account as security option.

TENURE OF LOAN
(15 years)
 S Shariq Ahmed

Innovative Financing Mechanisms

• Sub-ordinate (mezzanine) debt financing:

– Internal restrictions on equity participation by financial institutions,
– Lower equity and hence limited debt-equity ratio of new state level bodies
for infrastructure projects restrict them from market borrowing on a large
scale.
– Funding could be considered as deemed equity for a specific period granting
the bodies better financial leverage

• Cashflow financing:
– Institutional funding to be tailor-made to suit the financial requirements at
various stages of the project calling for cash-flow financing.
 S Shariq Ahmed

Securitisation of Receivables
Loan
Lending
Institution Borrower

Repayments

Outstanding
Loan Pass Through
Portfolio Certificates
SPV Investors

Fees

Periodic Cash Flows

 S Shariq Ahmed

Securitisation of receivables

• Conversion of future cash receivables into financial or debt instruments

tradable in capital market

• Role of SPV as intermediary:

– assumes the entire credit risk on the securitised receivables of selected
outstanding loan portfolio
– Insulates the lender from bankruptcy & insolvency risks
– repackages the receivables into pass-through certificates of manageable lots
for onward trading in the secondary market.
– Principal and interest components of the repayments are passed on to the
security owner.
 S Shariq Ahmed

Securitisation of receivables

• Merits to Investor:
– Continuous cash flow on Securitised instruments over the life of the loan
and principal “depletes” over time.

• Advantages to Lending Institution:

– reduces the locking up of funds in a few projects.
– facilitates reduction in borrowings
– ensures better asset-liability management.
– provides efficient exit option for the financial institutions to transfer the
risks of default and prepayment
 S Shariq Ahmed

Municipal Bonds

• In United States, account for nearly 70% of the capital financing for
infrastructure.
– General Obligation Bonds (GO)
– Revenue Bonds

• Ahmedabad Municipal Corporation GO bond issue of Rs. 100 Crores

• Bangalore, Vijayawada and Ludhiana have already raised money through

municipal bonds; Mumbai & Pune have obtained credit ratings; Kanpur
Development Authority latest entrant
 S Shariq Ahmed

Municipal Bonds

• Problems faced:
– Since bonds can be raised over night within a short period and their
utilisation may require 2-3 years, quite often, States/agencies tend to fall
into the debt trap
– On account of the dire financial position, Credit Rating of agencies need to
be enhanced to enable raising funds at lower costs.
 S Shariq Ahmed
Facilitating Urban Local Bodies in
Resource Mobilisation
• Government’s new strategy on the anvil for ULBs :
– Bond Bank
• Varying capacity levels of ULBs in obtaining high credit rating, lower
borrowing costs, optimal resource utilisation & asset management
• Need for financial intermediary to pool the projects of the various
agencies and float a common bond on the merit of the projects setting
apart a reserve fund.
• Bond bank could be at the national level as a special purpose vehicle or as
a subsidiary of the financial institutions.
 S Shariq Ahmed
Facilitating Urban Local Bodies in
Resource Mobilisation
• Government’s new strategy on the anvil for ULBs :
– Credit Line
• Making available requisite loan facilities for Urban Local Bodies and other
agencies

– Challenge Fund
• For facilitating the States and Urban local bodies implementing the
reform agenda
 S Shariq Ahmed
Project Initialisation Fund/ Project Initiative
Fund /Project Development Fund
• PIF/PDF for creation of well structured projects
– Technically viable
– Financially feasible and bankable
– Environmentally sustainable
 S Shariq Ahmed
Emerging State Level Initiatives for
Financing Urban Infrastructure
• State Level Urban Development Funds like TNUDF & MUDF in Tamilnadu
Maharashtra, for facilitating private sector participation bringing in
commercial orientation, improving financial management , assisting ULBs
accessing capital markets.

• State level urban development Finance Corporations formed

– APUFIDCO - TUFIDCO
– KUDFC - KUIDFC
– Gujarat Municipal Finance Board

• Tax intercept concept introduced in Madhya Pradesh State for urban

development loan servicing fund for local bodies.
 S Shariq Ahmed

FDI in Infrastructure

• Foreign Direct Investment(FDI) could be permitted through:

– Financial Collaborations
– Joint Ventures / Technical Collaborations
– Capital Markets via Global Depository Receipts (GDRs / Euro issues)
– Private Placements or Preferential Allotments

• In India, FDI upto 100% permitted in airports (beyond 74% with approval) and
Mass Rapid Transit Systems.
 S Shariq Ahmed

FDI in Infrastructure

• FDI upto 100 % permitted in

– Integrated township development including housing, commercial premises,
hotels, resorts
– City and regional urban infrastructure facilities
– Manufacture of building materials
– Development of Land with allied infrastructure as part of integrated
township development

• Enabling guidelines required to prevent capital flight (lock in period) and

regulate repatriation of profits in FDI
 S Shariq Ahmed

Special Economic Zones

• Proposal to set up Special Economic Zones (SEZ) in various parts of country as

duty-free zones for industrial, service and trade operations to attract foreign
investment and facilitate expeditious development.

• Proposal for a new SEZ at major Ports

• The policy envisages the treatment of SEZs as priority areas in provision of

infrastructure, convergence in statutory clearances, exemption from duties and
levies as well as liberal regulations.

• SEZs as industrial townships would need priority for integrated provision of

infrastructure facilities.
 S Shariq Ahmed
Imperatives for Sustainability in
Infrastructure Financing
• Development of
– Legal & Regulatory
– Institutional Mechanism
– Fiscal & Financial Framework

• Need for an Integrated Management of Urban Infrastructure & Intersectoral

Co-ordination.

• Creation of a new Breed of Urban Managers sensitised and responsible for

taking on the challenges in urban infrastructure.

• Curriculum up-gradation to provide not only technical inputs (Civil Engg.+

Transportation Engg. + Hydraulic engineering + Public Health Engineering ); but
also Financial Engineering.
 S Shariq Ahmed
Towards Sustainability in
Infrastructure Development
• Development of innovative financing and security mechanisms

• Enabling Public-Private-People’s-Partnerships (PPPP) and Government-Citizen

Partnerships

• General consensus on common national issues

• Role of the media

– creating awareness and disseminating best practices highlighting the
deficiencies and pertinent issues
Towards equitable
– mobilising unified public opinion and balanced
– attracting infrastructural investments Infrastructure
– protecting vulnerable interest groups / environment development and
economic growth.
 S Shariq Ahmed

Vicious Circle to Virtuous Cycle

High Level of
Infrastructure

Higher High Service

Investments Level

High Collection/ Higher level

Recovery Maintenance

Higher Willingness
to Pay
 S Shariq Ahmed
Recommended Approaches To Waste
Processing & Disposal
• Wealth from waste (processing of organic waste)
– Waste to compost
• (I) Aerobic / anaerobic composting
• (Ii) Vermi-composting
– Waste to energy
• (I) Refuse derived fuel (RDF) / Pelletization
• (II) Bio-Methanation

• Recycling of waste

• Sanitary landfilling

• Treatment of bio-medical waste separately

 S Shariq Ahmed
Various Technology Options Recommended
For Waste Processing
• Upto 50 metric tons / day(Mt/day) = Vermi-composting

• Between 50 Mt & 500 Mt / day = Vermi-composting + mechanical composting

• More than 500 Mt / day = mechanical composting + refuse derived fuel(RDF)

from rejects keeping in view the type of the city (industrial or non-Industrial)
or Bio-methanation
 S Shariq Ahmed

Major Industry Players

• Vertical Portals
– www.solidwaste.com
– www.swana.com

• Solid waste management equipment

– Hi-Rise Recycling Systems
– MotorVac
– Waste Connections
 S Shariq Ahmed

Major Industry Players

• Solid waste processing

– Barringer Labs
– Casella
– Safety-Kleen
– Waste Industries
– Waste Management

• Solid waste management consulting services

– Industrial Services of America
– Roy F. Weston, Inc.

(Note: Major players were largely determined by an article found at

www.wasteinfo.com, http://biz.yahoo.com/prnews/000119/ny_wall_st_1.html,
as well as company 1998 revenues)
 S Shariq Ahmed

Targeted Customers

• Vertical Portals
– All industry players
– Waste management professionals

• Solid waste management equipment

– Local government contracts
– Commercial and industrial companies
– Homeowners associations
 S Shariq Ahmed

Targeted Customers

• Solid waste processing

– “Environmental consulting engineering firms, hazardous and low level
radioactive waste treatment/disposal companies, public utilities, industrial
companies (including mining companies) and various Federal, state and local
government agencies.”
– (barringer-labs.com)

• Solid waste management consulting service

– Industrial and government
– Other solid waste processing firms
 S Shariq Ahmed

WTE in India

• First ambitious program to encourage WTE launched in 1995

– To demonstrate that WTE is possible

– Long-term target of producing 1700MW of energy from priority waste
streams
– Operated under the aegis of National BioEnergy Board (NBB), Ministry of
Non-conventional Energy Sources (MNES)
– Has an elevated status due to the contribution to reducing greenhouse gas
emissions and in encouraging the integration of “best practice” waste
collection and transfer to Energy
– 16 cost sharing projects ~ usage of Bio-methanation
– To establish a fiscal and financial regime necessary for WTE
 S Shariq Ahmed

Energy from Waste

• Potential of Power Generation in India from Waste

– Urban and Municipal Wastes : 1000 MW
– Industrial Wastes : 700 MW
(Dairy, Distillery, Press Mud, Tannery,
Pulp and Paper and Food Processing
Industries)
– TOTAL : 1700 MW

• Common perception – WTE is most applicable to India

– Reduces waste by 60 - 90%
– Recovers resources
– Aids safe disposal of waste – avoids pollution of land, water and air
– Reduces Greenhouse gases
 S Shariq Ahmed
Is WTE the answer to India’s waste
problem?

• WTE tech introduced in India so

WTE far are NOT based on a world-
technologies wide tried and tested model
are regarded • Technologies like bio-
methanation, incineration,
as “unused, combustion etc have toxic by-
suspect” products that cause serious
technologies environmental problems like Acid
rain, fog
 S Shariq Ahmed
Is WTE the answer to India’s waste
problem?
Cost of a typical 5MW WTE plant ~ Rs 40 crores
Consumption ~ 150 tons of urban waste for each MW of electricity

Which is an investment of Rs 8 crore per MW i.e., FOUR times cost of

conventional Thermal power!!
And, the subsidy exceeds 50% of total project cost!
 S Shariq Ahmed

WTE Projects in Maharashtra

Municipal Corporation Promoter Capacity

a) MSW Pvt. Ltd,
Mumbai
14.98 MW
b) Waste
Municipal Council of 10.0 MW
Management Ind.
Greater Mumbai
Ltd, Mumbai
21.0 MW
c) EDL India Ltd, New
Delhi
Kalyan Dombivali Municipal
Not Finalised 5.52 MW
Corp
Pimpri-Chinchwad Soundcraft Indus,
3.9 MW
Municipal Corpn Mumbai
TOTAL 51.88 MW
 S Shariq Ahmed

WTE plant ~ Lucknow

• 5 MW Power Generation Project for MSW

– Promoter
• Asia Bio-Energy (A consortium of companies in Austria, Germany,
Singapore and India)
– Technology
• BIMA (Biogas tech) from Austria plus some equipment from Germany
– Capacity
• 5.0 MW (nett), 5.6 MW (gross) power, 80 TPD manure
– Input waste
• About 500 TPD
– Project cost
• Rs 73 crore
 S Shariq Ahmed

WTE ~ major processes involved

• Pre-treatment:
– Removal of inerts / inorganic / non-biodegradable matter and homo-
genisation of feedstock

• Energy Recovery:
– Anaerobic Digestion / Gasification / Combustion

• Post-Treatment:
– Stabilisation of treated / processed material for final disposal / utilisation
 S Shariq Ahmed

Methods Of Disposals

• These are the following methods for disposal of the solid waste.

– LAND FILLS
– INCINARATION
– BIOLOGICAL REPROCESSING
– RECYCLING
– OCEAN DUMPING
– PLASMA GASSIFICATION
 S Shariq Ahmed

Solid Waste Management Hierarchy

 S Shariq Ahmed

Land Fill

• It is the most traditional method of waste disposal.

• Waste is directly dumped into disused quarries, mining voids or borrow pits.

• Disposed waste is compacted and covered with soil to prevent vermin and
wind-blown litter.

• Gases generated by the decomposing waste materials are often burnt to

generate power.

• It is generally used for domestic waste.

 S Shariq Ahmed

Advantages

• Landfill site is a cheap waste disposal option for the local council.

• Jobs will be created for local people.

• Lots of different types of waste can be disposed of by landfill in comparison to

other waste disposal methods.

• The gases given off by the landfill site could be collected and used for
generating power.
 S Shariq Ahmed

Disadvantages

• The site will look ugly while it is being used for landfill.

• Dangerous gases are given off from landfill sites that cause local air pollution
and contribute to global warming.

• Local streams could become polluted with toxins seeping through the ground
from the landfill site.

• Once the site has been filled it might not be able to be used for redevelopment
as it might be too polluted.
 S Shariq Ahmed

Land Required For Disposal Of MSW

 S Shariq Ahmed

Emmision Of Methane From Landfill

S Shariq Ahmed
 S Shariq Ahmed

Incineration

• Incineration is a waste treatment process that involves the combustion of solid

waste at 1000C.

• Waste materials are converted into ash, flue gas, and heat.

• The ash is mostly formed by the inorganic constituents of the waste and gases
due to organic waste.

• The heat generated by incineration is used to generate electric power.

 S Shariq Ahmed

Advantages

• Minimum of land is needed compared to other disposal methods.

• The weight of the waste is reduced to 25% of the initial value.

• No risk of polluting local streams and ground waters as in landfills.

• Incineration plants can be located close to residential areas.

• Gases are used to generate power.

 S Shariq Ahmed

Disadvantages

• Expensive

• Required skilled labour.

• The chemicals that would be released into the air could be strong pollutants
and may destroy ozone layer (major disadvantage).

• High energy requirement

 S Shariq Ahmed

INCINERATION PLANT OBERHAUSEN, GERMANY

 S Shariq Ahmed

Ocean Dumping

• Ocean dumping is the dumping or placing of materials in the ocean, often on

the continental shelf.

• A wide range of materials is involved, including garbage, construction and

demolition debris, sewage sludge, dredge material, waste chemicals, and
nuclear waste.

• Sometime hazardous and nuclear waste are also disposed but these are highly
dangerous for aquatic life and human life also.
 S Shariq Ahmed

Advantages

• Convenient

• Inexpensive

• Source of nutrients for fishes and marine mammals.

• Vast amount of space is available.

• All type of wastes are disposed.

 S Shariq Ahmed

Disadvantages

• There are three main direct public health risks from ocean dumping:

– Occupational accidents, injuries, and exposures

– Exposure of the public to hazardous or toxic materials washed up on beach

sand.

– Human consumption of marine organisms that have been contaminated by

ocean disposal.

– Highly dangerous for aquatic life.

S Shariq Ahmed
 S Shariq Ahmed

Biological Reprocessing

• Materials such as plants, food scraps, and paper products can be decomposed
into the organic matter.

• The organic matter that is produced from this type of recycling can then be
used for such things as landscaping purpose or agricultural uses.

• Usually this method of recycling is done by putting the materials in a container

and let to stay there until it decomposes.
 S Shariq Ahmed

Recycling

• It is basically processing or conversion of a waste item into usable forms.

• Recyclable materials include many kinds of glass, paper, metal, plastic, textiles,
and electronics.

• But recycling is not a solution to managing every kind of waste material.

• For many items like plastic bags, plastic wrap, yogurt cups, margarine container
etc. recycling technologies are unavailable or unsafe.
 S Shariq Ahmed

Advantages

• Reduction of air and water pollution.

• Reduction in the release of harmful chemicals and greenhouse gases from

rubbish.

• Saves space required as Waste Disposal Landfill.

• Reduce financial expenditure in the economy.

• It helps in conserving a lot of energy resources like petroleum and coal

deposits.
 S Shariq Ahmed

Saving Through Recycling

• When aluminium is recycled - considerable saving in cost.

• Making paper from waste saves 50% energy.

• Every tone of recycled glass saves energy equivalent to 100 liters of oil.

• Recycling about 54 kg of newspaper will save one tree.

 S Shariq Ahmed

MATERIAL ENERGY SAVING

ALLUMINIUM 95%
CARDBOARD 24%
GLASS 5-30%
PAPER 50%
PLASTIC 70%
STEEL 60%
 S Shariq Ahmed

Process Of Recycling

• COLLECTION: The first step required for recycling is collecting recyclable

materials from communities. Today many major cities and larger communities
offer a curbside pick up service for recyclable materials.

• SORTING: The second step involves processing the recyclable materials. This
includes sorting the materials into groups, cleaning them and getting them
ready to be sold to manufacturers who will turn the materials into new
products.
 S Shariq Ahmed

Process Of Recycling

• MANUFACTURING: It is the third step in the recycling process. The collected

material is sent to industries those convert them into new products.

• PURCHASING: The last step involves the purchasing of recycled products.

When consumers purchase products that have been made with post consumer
material the recycling process has been completed and then can be repeated.
 S Shariq Ahmed
Recycling Not A Solution To All
Problems!
• Recycling is not a solution to managing every kind of waste material

• For many items recycling technologies are unavailable or unsafe

• In some cases, cost of recycling is too high.

 S Shariq Ahmed

What Should Be Done?

 S Shariq Ahmed

Plasma Gassification

• Plasma gasification is a new garbage disposal solution using plasma

technology.

• Uses electrical energy and the high temperatures (4000°C to over 7000°C)
created by an plasma torches.

• Almost completely breaks down the waste into syngas which are used to
generate electricity.

• The remaining material (slag) is used to produced material for building

projects.
 S Shariq Ahmed

What Is Plasma?

• Fourth state of matter.

• It is an ionized gas at high temperature,

capable of conducting current due to free
electrons.

• Created by applying an electric arc to a low-

pressure gas.

• Lightning is an example from nature.

 S Shariq Ahmed

Plasma Torches

• Consists of a tungsten rod (cathode) and a

water-cooled copper (anode).

• Shaped in the form of a nozzle.

• Gas is introduced in the electrode gap and a dc

arc is established between the electrodes to
create plasma.
 S Shariq Ahmed

How Plasma Gassifire Works?

• CONVEYER SYSTEM:
– Garbage is loaded on the conveyer belt.
– Pushes into the pretreatment system by means of plunger.

• PRETREATMENT MECHANISM:
– Use to make the entire system more efficient.
– Use grinders or crushers to reduce the size of the pieces of waste.
– Plasma torch can break down the smaller pieces faster.
 S Shariq Ahmed

How Plasma Gassifire Works?

 S Shariq Ahmed

Furnace

• Furnaces have an airlock system to allow garbage to come in while preventing

the hot gases from escaping into the atmosphere.

• Have multiple torches to break down all the matter into gases and slug.

• Also features a drainage system to tap off the slag and a vent system to vent
out the gases.

• To withstand the intense heat, furnaces are lined with refractory material and
often have a water-cooling system as well.
 S Shariq Ahmed

Furnace
 S Shariq Ahmed

Slug Drainage

• Molten slag at the bottom of the furnace and helps in maintaining the high
temperature inside the chamber.

• Occasionally slag must be drained from the furnace.

• Slag drains away from the furnace and cools in a separate chamber.

• Slug is also used to produce some building materials.

 S Shariq Ahmed

Slug Drainage

MOLTEN SLAG DRAINING FROM A PLASMA FURNACE

 S Shariq Ahmed

After Burning

• Gases can pass through a secondary chamber where natural gas flames
combust any remaining organic material in the gases.

• These extremely hot gases then pass through a Heat Recovery Steam
Generator (HRSG) system.

• Where they heat water to form steam.

• This steam then turns a steam turbine to create electricity.

 S Shariq Ahmed

After Burning
 S Shariq Ahmed

Byproducts Of The Process

• SYNGAS:
– A mixture of several gases but mainly comprises hydrogen and carbon
monoxide.
– Can be used as a fuel source.

• SLUG:
– Solid byproduct from the gasification process.
– The weight of the slag is about 20 percent of the weight of the original
waste.
– The volume of the slag is about 5 percent that of the original waste volume
 S Shariq Ahmed

Conclusion

The key to healthy communities is to redirect the millions of

dollars in investments slated for incineration systems into waste
prevention and reduction and zero waste systems that

maximize return on investments

both

and economic development opportunities

 S Shariq Ahmed
www.allied-group.co

Plot No.293,Kehar Singh Estate

West end Marg, Opp.”D” Block Saket,
Saidula Jab, New Delhi-110030
Contact No. - 011 40506600
Facsimile - 011 40506636
Website – www.allied-group.co

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