14.0 Financial and Economic Aspects

14 Financial and Economic Aspects

Content of Lecture
14.1 Costs of solid waste collection, sorting and processing
14.2 Benefits of managing solid waste
14.3 User fees and fee collection
14.4 Benefits of waste reduction and recycling
14.5 Job opportunities in SWM

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14 Financial and Economic Aspects

14.1 Costs of waste collection, sorting & processing

Background
Rising population and MSW:
the globally generated MSW
In 1990, -

1.3 billion metric tons

Presently- 1.6 billion metric tons

Money for managing the MSW:
• In the Early 1990s - Asian countries spent about US$25 billion/yr
• By the 2025-

- this will rise to around US$50 billion/yr.

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

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14 Financial and Economic Aspects

14.1 Costs of waste collection, sorting & processing

MSW management consumes a high percentage of the

municipal budgets, for example:
• In Malaysia, an average of 50% of the municipal budget is spent on
MSW, and of this, 70% is spent on collection.

To develop an integrated and cost-effective MSW management
system, individual components of the system should be:
• chosen so they do not overlap or compete excessively
• sized to handle the portion of the waste optimally
• located so that transportation costs are minimum
• owned, operated, and financed to minimize overall public costs
• administered by appropriate agencies, with adequate public oversight

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14 Financial and Economic Aspects

14.1 Costs of waste collection, sorting & processing

Case Study : costs of MSW management in an Egyptian settlement

Rosetta region, Nile Delta (1/3)
• Total 17 human settlements (one urban and rest are rural)
• total population of the region: 191,686 (2005).
• average household size: 4.5 to 7.4
Municipal authorities have the responsibility for providing SWM service
•one truck and few personnel collects the waste infrequently
•solid waste generated, 32.54 tons/day, either infrequently collected or
just dumped illegally

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14 Financial and Economic Aspects

14.1 Costs of waste collection, sorting & processing

Case Study : costs of MSW management in an Egyptian
settlement Rosetta region, Nile Delta (2/3)
Fleet needed to handle the generated SMW:
• 5-ton trucks working on the main streets : 20 tons/day

• 1.1-ton trucks covering more remote and narrow internal streets (with
transferring loads to larger trucks): 26.4 tons/day
• Landfill: 1.62 ha plot has the capacity to accept 4.77 yr of MSW in the
area.

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14 Financial and Economic Aspects

14.1 Costs of waste collection, sorting & processing

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

Annual costs of this SWM system (including depreciation, sanitary landfill
preparation and rehabilitation, and operational costs) was estimated as
$300,000
•Costs could be totally covered by the locally raised funds.
•The willingness to pay was estimated as- $550,000.

•Profitability of the service: rate of return on investment vary 59.6% to
57.4%.
•MSW service could be financed locally and could represent a
profitable business.
•could be provided either by a small-scale firm, a local cooperative or
an NGO
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14 Financial and Economic Aspects

14.1 Costs of waste collection, sorting & processing

Example: Latin American model for integration of small-scale
waste collection enterprises with the formal waste collection
Enterprises
• paid by the municipal authorities or by a community
• provide collection using man powered or semi-motorized carts
• serve hilly areas marginally or not served et al where collection
trucks cannot reach.

• low cost of equipment and administrative costs are minimal,
• operation and maintenance of the equipment is simple and
inexpensive

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14 Financial and Economic Aspects

14.2 Benefits of managing solid waste

Benefits of managing solid waste are:
 Achievement of local, regional, and state solid waste
reduction/diversion goals.
 Savings on landfill space.
 Savings on energy.
 Reduction of water pollution risks.
 Conservation of natural resources.
 Reduction of landfill disposal costs.
 Production of reusable products.

 Revenue from sale of reusable materials.

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14 Financial and Economic Aspects

14.3 User fees and fee collection

Financial Sources
- municipal taxes
- fees charged for services
- government subsidies
- deposit-refund system for recyclables
(Bangkok, Singapore, Tokyo, and Jakarta)
- several forms of levy
-direct fees based on waste volumes
-indirect fees
(based on property taxes, floor area, water and electric bill)

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14 Financial and Economic Aspects

14.4 Benefits of waste reduction & recycling

Benefits of waste reduction & recycling
- Space saving
- Sustainable use of natural resources
- Resource recovery
- Environmental savings
- Financial benefits
- Health benefits
- Social uplift

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14 Financial and Economic Aspects

14.4 Benefits of waste reduction & recycling

Extracting and adding value processes
Collection
Sorting
Accumulation of volume
Pre-processing
Small manufacturing craftsmanship
Market intelligence
Trading

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14 Financial and Economic Aspects

14.5 Job opportunities in
SWM

Job opportunities in SWM can be found at different levels
For example at Micro-enterprises
•Micro-enterprises are for profit business operations.
•Run by entrepreneurs (focus is on creativity, innovation and the
constant search for new products or process ideas)
•Micro-enterprises enter into SWM activities because they see a gap in
service delivery and existence of a demand for fulfilling that gap.
•The extent of private sector depends on a number factors including
demand for the service, ability to pay, poverty and regulations.

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14 Financial and Economic Aspects

Thank You for Your Kind
attention!

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