Final Report October 2009 Advisory Study on the Municipal Solid Waste Management in Yerevan 6543P06/FICHT-5006662-v1 The report was prepared under a grant from PPIAF. PPIAF (Public-Private Infrastructure Advisory Facility) is a multidonor technical assistance facility. Through technical assistance and knowledge dissemination PPIAF supports the efforts of policy makers, nongovernmental organizations, research institutions, and others in designing and implementing strategies to tap the full potential of private involvement in infrastructure. The views are those of the authors and do not necessarily reflect the views or the policy of PPIAF, the World Bank, or any other affiliated organization. Sarweystraße 3 70191 Stuttgart • Germany Phone: + 49 711 8995-0 Fax: + 49 711 8995-459 www.fichtner.de Please contact: Dietmar Mettler Extension: 699 E-mail: Dietmar.Mettler@fichtner.de Jeffrey Johnson Extension: 659 E-mail: Jeffrey.Johnson@fichtner.de Rev No. Rev-date Contents/amendments Prepared/revised Checked/released 0 16.10.2009 JNS/DM LIN 1 2 6543P06/FICHT-5006662-v1 Table of Contents 1. Executive Summary 1-1 2. Background and Subject of the Project 2-1 2.1 Project rationale 2-1 2.2 Overall and Specific Objectives 2-1 2.3 Project Tasks 2-2 2.4 Subject of this Report 2-2 3. Municipal Solid Waste Management in Yerevan 3-1 3.1 Introduction 3-1 3.2 Current Execution of MSW Collection and Street Cleaning 3-1 3.3 MSW Generators 3-2 3.4 Waste Characterization 3-2 3.5 Waste Quantities 3-2 3.5.1 Present Waste Quantities 3-2 3.5.2 Forecast 3-3 4. Collection Performance Standards 4-1 4.1 Current Practice of Waste Collection 4-1 4.1.1 Household Waste 4-1 4.1.2 Commercial Waste 4-2 4.1.3 Equipment Utilized in Waste Collection 4-3 4.1.4 Current Recycling Activities 4-3 4.2 Basic Design Requirements for Waste Collection 4-4 4.2.1 Building Structures and Collection System 4-5 4.3 Recommended Improved Collection System 4-9 4.3.1 Transfer Stations for MSW 4-9 4.3.2 Source separation and recycling 4-10 4.3.3 Composting 4-11 4.4 Cost Estimates for the Improved System 4-11 5. Street Cleaning and Winter Services Performance 5-1 5.1 Present Street Cleaning and Winter Services Tasks 5-1 5.2 Shortcomings of the System 5-1 6543P06/Final Report I 5.3 Service Requirements for Street Cleaning and Snow Control 5-2 5.3.1 Definition of Degree of Cleanliness 5-2 5.3.2 Priority of Streets and Cleaning Frequencies 5-3 5.4 Recommended Improved Street Cleaning System 5-4 5.5 Cost Estimates for the Improved Cleaning System 5-5 6. Waste Disposal 6-1 6.1 Present System for Waste Disposal 6-1 6.2 Basic Required Sanitary Standards for the Landfill 6-2 6.2.1 Construction and Operation Requirements 6-2 6.2.2 Number of Future Landfill Sites for Yerevan 6-2 6.3 Recommended Improved Waste Disposal 6-3 6.3.1 Proposals for immediate sanitary improvements at Nubarashen Landfill 6-3 6.3.2 Nubarashen Present and Future Layout 6-3 6.3.3 Future operation 6-5 6.3.4 Evaluation of COeq emission reduction potential 6-6 6.3.5 Closure of Landfills and Dumpsites 6-7 6.4 Cost Estimates for the Improved Disposal 6-7 6.4.1 Investment Costs 6-7 6.4.2 Operation Costs 6-8 6.4.3 Total costs 6-9 7. Configuration Plan 7-1 7.1 Configuration Options 7-1 7.2 The Recommended Configuration Plan 7-6 8. Tariff Reform 8-1 8.1 Current Financing of the SWM System 8-1 8.1.1 Current Waste Tariffs Current Waste Tariffs 8-1 8.1.2 Budgetary Support of MSWM System 8-1 8.2 Level of MSW Tariff and Street Cleaning Tariff 8-2 8.2.1 Proposed Structure of Cost Tariffs and Payment Procedure 8-3 8.2.2 Cost Tariff for Waste Collection Only 8-4 8.2.3 Landfill Tariff 8-5 8.2.4 Estimate of All-in Tariff 8-5 6543P06/Final Report II 8.2.5 Street Cleaning Tariff 8-6 8.3 Willingness to Pay 8-6 8.4 Recommendations on the Tariff Reform 8-7 8.4.1 Improved Fee Collection 8-7 8.4.2 Tariff Level for MSWM and Street Cleaning 8-8 9. Legal Issues and Recommendations 9-1 9.1 The Anticipated PPP Scenario 9-1 9.2 Main Shortcomings 9-2 9.3 Recommendations 9-3 10. PPP Business strategy 10-1 10.1 Base Case 10-1 10.1.1 Neutral municipal budget without cross-subsidies 10-4 10.1.2 Neutral impact on YM budget with cross-subsidies 10-5 10.1.3 Fee collection 10-6 10.1.4 Further results and conclusions 10-7 10.2 Next Steps 10-8 11. Urban Waste Collection Regulations 11-1 11.1 International experience 11-1 11.2 Regulation by contract 11-6 12. Waste Collection Tariff Structure 12-1 12.1 Household waste tariffs 12-1 12.2 International Experience 12-3 12.3 Commercial waste collection fees 12-10 12.4 Tariffs for Commercial Enterprises and Institutions 12-12 12.4.1 Tariff structure alternatives for Type 1: small waste generators 12-12 12.4.2 Type 2: Medium generating enterprises and institutions 12-14 12.4.3 Type 3: Large generating enterprises and institutions 12-17 12.4.4 Who is to collect the waste 12-17 13. Approach for Collection of Waste Fees 13-1 13.1 Collecting waste fees 13-1 13.2 Situation in Yerevan 13-1 13.3 International Experience 13-3 6543P06/Final Report III 13.3.1 Basics 13-3 13.3.2 Sources of information 13-4 13.4 Appropriate recommendation for Yerevan 13-4 13.5 Enforcing Payments 13-6 14. Violations 14-1 14.1 Administrative violations 14-1 14.2 Contractual penalties 14-1 15. Implementation of PPP Arrangements 15-1 15.1 Standard Bidding Documents 15-1 15.1.1 Contents of typical Bidding Documents - Landfill DBO 15-2 15.1.2 Example Invitation to Tender – MSWM Tender with different lots for Landfills and collection services 15-3 15.2 FIDIC draft contracts 15-4 15.3 Guideline for Yerevan SWM Tender 15-10 Annexes 15-1 Table 1: Pre-collection point systems ................................................................................ 4-6 Table 2: MSW collection from MABs with garbage chutes ............................................. 4-7 Table 3: MSW collection from family housing area ......................................................... 4-9 Table 4: Proposed Classification and Cleaning Frequencies............................................. 5-3 Table 5: Result of cost estimate ......................................................................................... 5-5 Table 6: Landfill areas and capacities at Nubarashen Landfill.......................................... 6-5 Table 7: CO2eq reduction potential for Zones 2 and 4 ...................................................... 6-6 Table 8: Costs for closure of landfills and cleaning of informal dumpsites ...................... 6-7 Table 9 Breakdown of construction costs for landfill extension ....................................... 6-7 Table 10 Estimation of operation costs.............................................................................. 6-9 Table 11 Comparison of configuration options ................................................................. 7-3 Table 12: Willingness to pay more .................................................................................... 8-6 Table 13 Results: Base case YM collects, no deficit, no cross-subsidy .......................... 10-3 Table 14 Neutral municipal budget effect ....................................................................... 10-4 Table 15 Neutral municipal budget effect, 50% surcharge to commercial ..................... 10-5 Table 16 Fee collection rates for operator collection of fees........................................... 10-6 Table 17 Financial results – Operator collects waste fees ............................................... 10-7 Table 18 Selected Results ................................................................................................ 10-8 Table 19 “Typical International Experience” Waste Ordinance ..................................... 11-4 Table 20 Design requirements ......................................................................................... 11-6 Table 21 Contractual requirements for different collection types ................................... 11-8 Table 22 Survey results: waste fee paid in February 209 .............................................. 12-11 Table 23 Tariff structure alternative for small businesses............................................. 12-13 Table 24 Tariff alternatives – medium sized waste generators ..................................... 12-15 6543P06/Final Report IV Figure 1: MSW quantity forecast for Yerevan 3-4 Figure 2: Map of Nubarashen landfill. 6-4 Figure 3 Overview of 5 Options 7-2 Figure 4 Base Level Configuration (situation 2018) 7-7 Figure 5 Configuration of Option 5 (situation 2018) 7-8 Figure 6 Short term implementation plan 7-9 Figure 7 : Long term implementation plan 7-10 Figure 8: Structure of tariffs for MSW management and street cleaning 8-3 Figure 9: Payment flows 8-3 Figure 10: Required tariff as function of the invoice collection rate 8-6 6543P06/Final Report V 1. Executive Summary The Yerevan City Government is attempting to improve the present situa- tion by involving the private sector. As the City Government approached a decision making point for tendering long term arrangements for MSWM in Yerevan, the RA Government Ministry of Economy requested the World Bank’s advice and assistance in supporting the process. The World Bank responded by tendering a Study funded by a grant from the Public-Private Infrastructure Advisory Facility (PPIAF) and Fichtner GmbH & Co. KG was selected as the Consultant for the Advisory Study on the Development of the Solid Waste Management System in the City of Yerevan through Private Sector Participation. This is the Final Report of the study. It is divided into two parts. The first part summarizes the results of the project including all task reports submit- ted. The report describes briefly the current situation and the problem analysis carried out. During the project quality standards for all areas, collection, street cleaning, winter services and disposal, were developed and these are presented in brief. The process of evaluating the disposal options and developing a configuration plan is then described and the results shown. Financial, tariff and legal issues are discussed on the basis of the work of Tasks 4 and 6. The recommended structure of the preferred PPP options is shown as a review of the Task 7 work on PPP-options. The financial analysis of the rates for households and commercial sector, the municipality budget conse- quences and the RA Government are presented. The second part of the report provides information for implementation issues identified by the RA Government and above all the Yerevan Munici- pality. Analysis of international experience is provided and a number of examples of specific experience are included in the report. The Report is accompanied by a number of examples illustrating “the international experience” in the form of documents usually provided in PDF format. These include a number of local regulations, which can be compared with the summaries in the report and used by the Municipality to develop its own local government regulation on waste management. The Consultant points out a number of important sources of information regarding the topics: • Rate structures (tariffs and fees) • PPP in municipal solid waste • Contractual penalties • General principles of waste management for local government deci- sion makers • Tendering procedures and contractual issues. 6543P06/Final Report 1-1 The annexes are an important part of part 2 of this report as they contain the selected international experience requested by the Government. There is quite a lot of information provided and the proper use of this information will require some effort on behalf of the Yerevan Municipality. Without this effort, however, it is quite impossible to forecast a successful PPP imple- mentation. 6543P06/Final Report 1-2 2. Background and Subject of the Project 2.1 Project rationale The current Municipal Solid Waste Management (MSWM) System in Yerevan provides poor MSW collection as well as disposal services. Due largely to insufficient funding, the system has deteriorated in nearly all districts of Yerevan. Except in Kentron, almost no investments have been made during the past 10 years, resulting in a vehicle fleet, in which around 70% of vehicles are older than 17 years. Yerevan has reached a point where urgent action for improvements and modernization is required, ensuring proper performance and environmental conditions in the future. The Yerevan City Government is attempting to improve the present situa- tion by involving the private sector. The activities have progressed to a point where a number of local and international private sector firms have ex- pressed their interest. As the City Government approached a decision making point for tendering long term arrangements for MSWM in Yerevan, the Government of RA represented by the Ministry of Economy requested the World Bank’s advice and assistance in supporting the process. The World Bank responded by tendering a Study funded by a grant from the Public-Private Infrastructure Advisory Facility (PPIAF) and Fichtner GmbH & Co. KG was selected as the Consultant for the Advisory Study on the Development of the Solid Waste Management System in the City of Yerevan through Private Sector Participation. This is the Final Report of the study. 2.2 Overall and Specific Objectives The overall objective of the project is to: • improve the MSW management of Yerevan City and • evaluate private sector involvement to achieve this goal. The specific project objectives are to: • Evaluate the current situation respecting MSWM in Yerevan based on existing study work, and updated information as required; • Develop a performance based specification defining an acceptable level of MSW collection service meeting reasonable standards of en- vironmental and hygienic protection, affordability, capacity and local requirements, and identify incremental service enhancements over this basic level of collection service that may be considered; • Determine the most beneficial development approach for future MSW disposal facilities, including the feasibility of upgrading the existing landfill to acceptable environmental and operating standards; 6543P06/Final Report 2-1 • Assess tariff levels and mechanisms for periodic change and collec- tion, inclusive of recommendations related to appropriate reforms ne- cessary to support the basic MSWM system performance levels, provision of environmentally sound disposal capacity; and incre- mental potential refinements to the MSWM system; • Document and justify an overall configuration plan for Yerevan’s MSWM system as it is developed; • Advise on draft enabling legislation that would facilitate tariff re- forms, appropriate assignment of responsibilities within the municipal structure, and provision for public-private partnerships in MSWM sys- tem financing and operation; • Develop a commercial strategy for tendering MSWM services in the city of Yerevan that will optimize financing of required improve- ments, maximize cost benefit to the city and its population, and en- sure a fair and transparent process, all agreed with municipal stake- holders; • Provide advice and assistance as may be required in preparing for public private partnership implementation. The Consultant is aware of these objectives and has carried out the study with a comprehensive approach in realizing them. 2.3 Project Tasks The Study is divided into a number of tasks as follows: Task 1: Evaluation of the current solid waste management system; Task 2: Development of the basic MSWM Collection System Performance Requirements; Task 3: Assessment of near and longer term waste disposal options; Task 4: Assessment of and improvement in the financial means to support the MSWM System; Task 5: Documentation of the recommended MSWM system configuration plan in the city of Yerevan; Task 6: Advice and assistance respecting legislation and regulations; Task 7: Identification of the options for private sector participation in the financing and operation of the MSWM System and develop a busi- ness strategy for the delivery and financing of basic MSWM ser- vices; Task 8: Assistance for implementation of PPP arrangements; Task 9: Public and stakeholder consultation. 2.4 Subject of this Report This document is the Final Report covering the main findings of the Project. This report is meant to give a general overview of the project as well as to reflect its main findings. Each of the Tasks 1 to 7 is covered in more detail in the respective task reports. Results of the roundtables and stakeholder consultations in general were considered in the reports. These reports were 6543P06/Final Report 2-2 made publicly available in English and Armenian languages and distributed among the stakeholders. In addition, the report covers a number of implementation issues which have arisen during the discussions in the Working Group and Steering Committee and with the Yerevan Municipality, which will finally implement the PPP option selected by the RE Government. 6543P06/Final Report 2-3 PART I Project Summary 6543P06/Final Report 3. Municipal Solid Waste Management in Yerevan 3.1 Introduction At the beginning of the project work, the City of Yerevan was composed of twelve district communities having the status of self-government bodies. One responsibility of the self-government bodies was to organize MSW collection and street cleaning. A new Law on Yerevan was prepared and enacted by the end of 2008. The Law came into effect early 2009 and elections were held in the City in May 2009. This new Law on Yerevan changed the status of Yerevan into the status of a self-government body with responsibility for MSW management. Armenia is considered a medium-income country and Yerevan is the largest economic center of the RA. The city has benefited from the strong GDP growth of the Armenian economy. In 2007 a GDP growth of 13.7 % contin- ued a double-digit rate for the sixth consecutive year. Economic growth is primarily driven by the construction and services sectors. However, the worldwide financial crisis will certainly affect Yerevan and reduce the high growth rates of the previous years. The rate of inflation was 4.3 % during 2007 and reached 6.6 % in January 2008. Moody’s rates the government of RA Ba2 for local and foreign currency debt obligations. This rating balances the low government and private sector debt against the country’s weak institutional capacity and modest level of economic development. The population of Yerevan as of January 1, 2008 was 1.1 million accounting for about 35 % of the total population of the RA. The population is divided unevenly among the 12 districts. 3.2 Current Execution of MSW Collection and Street Cleaning Until the Law on Yerevan came in force in the end of the year 2008, the district communities concluded service contracts for street cleaning and snow control to generally community-owned local companies and they paid for these services from the local government budget. There were 14 companies providing the cleaning services, approximately half of the companies privately owned. The other half is JSC or limited liability companies with 100% local government ownership. The contracts for street cleaning and snow removal were renewed annually usually with the same company and without a tender. The services were provided for a total area of public streets, squares, parks, gardens, and bridges etc in 6543P06/ Final Report 3-1 Yerevan of about 10.2 million m². Municipal areas consist of 6.7 million m² and community areas amount to 3.5 million m²1. The same companies also carry out MSW collection and transportation services, which are usually in deficit due to the low fees and low collection rates. Therefore part of the payments for cleaning is used for subsidizing the collection and transport services. This is done with knowledge and tolera- tion of the district communities, although this significantly impacts the quality of the cleaning services. The service contracts for street cleaning as well as the MSW collection services are not seriously monitored by the district communities. 3.3 MSW Generators The following types of MSW generators in Yerevan are differentiated: • Family houses (mainly one- or two-storey detached houses); • Multi-apartment buildings (high- and low-rise); • Public institutions (schools, kindergartens, universities, hospitals and other); • Commercial organizations (restaurants, shops, hotels, offices and other); • Industrial sources. 3.4 Waste Characterization Since 1990 several waste analyses have been carried out in Yerevan. These data are seen as indicative only. The available results of former investiga- tions in different years are quite different, which can only be partially explained by the changes in waste composition in the past 20 years. The most recent analysis of 2006 performed by Shimizu fits well with analyses known from other comparable cities. The largest shares are for food waste (35% – 50%) and paper/ cardboard as well as plastics (both around 10% – 12%). 3.5 Waste Quantities 3.5.1 Present Waste Quantities In Yerevan, few activities have been undertaken to monitor waste genera- tion quantities. None of the 4 larger dumps/landfills has a weighbridge. Thus the existing quantity data are not accurate even with regard to the waste quantity delivered to the landfill, which is only an estimated amount based on the number and payload of vehicles entering the main landfill. 1 These figures were received in September 2008. In the meantime, Yerevan Municipality indicates that they have updated figures. 6543P06/ Final Report 3-2 The Report on Waste by Armenian Statistical Service from 2005 provides data on waste generation in Yerevan from 1985 to 2004. According to local experts, the waste quantity has stabilized since 2004 at about 800,000 m³. For various reasons having to do with the quality of the available data, the Consultant proposes an adjustment of the previously estimated waste quantities. The Consultant’s method results in a quantity of MSW landfilled amounting to 265,000 - 300,000 t/a. A comparatively low MSW generation rate is assumed, i.e. approximately 300,000 - 330,000 t/a, which are gener- ated. 3.5.2 Forecast Comparing the collected data regarding generated MSW quantities in Yerevan, it is clear that the MSW quantity forecast in the Yerevan Munici- pal Master Plan is too low, and thus a new forecast has been developed based on demographic and economic trends as well as international waste management experience. Two Scenarios of MSW development during the next 20 years, basically assuming the 2 different starting quantities as estimated from the baseline data, were postulated. Scenario 3 assumes that the financial crisis will have a long lasting impact and thus a smaller GDP growth rate of average 3 %. • Scenario 1: Start at low quantities (265,000 t/a of disposed MSW – 300,000 includ- ing recycled quantities) • Scenario 2: Start at high quantities (300,000 t/a of disposed MSW – 330,000 t/a in- cluding recycled quantities) • Scenario 3: Start at the same quantities as Scenario 2, however a slower development of the UGR is assumed by the Consultant, given a slower GDP growth. This is reflected in a much slower growth rate of paper waste, i.e. a lower consumption of newspapers and magazines as in Scenario 1 and 2. Addi- tionally a slower growth of plastic and food waste is assumed. Figure 1 shows the result of the MSW quantity forecast. It needs to be mentioned that this forecast does not take into account any influence of future activities with regard to support and increase activities of prevention, recycling etc. 6543P06/ Final Report 3-3 500,000 450,000 400,000 Quantity (t/a) Scen 1 350,000 Scen 2 Scen 3 300,000 250,000 200,000 2007 2012 2017 2022 2027 Year Source: Fichtner own calculations Figure 1: MSW quantity forecast for Yerevan The start at a quantity of about 300,000 t/a seems the more probable sce- nario. However, a development to a UGR of 380 kg/cap/a in the next 20 years seems more realistic, taking into consideration UGRs in Western Europe of around 500 kg/cap/a. 6543P06/ Final Report 3-4 4. Collection Performance Standards 4.1 Current Practice of Waste Collection 4.1.1 Household Waste Although generally a common approach is followed, MSW collection differs from one district community to the other due to different types of urban development and waste generation patterns. The MSW collection and transportation system comprises two interrelated components: • Waste pre-collection scheme (including waste accumulation facilities – garbage chutes, waste bins, pre-collection points and other); • Waste transportation vehicles. The MSW collection schemes and pre-collection facilities determine the type of collection vehicles used for waste collection and transportation as well as directly affect the collection schedule. Manpower plays the central role in waste collection and transportation services. According to the Yerevan City Administration, some 1,400 employees currently work in waste collection, transportation and sanitary cleaning in Yerevan. The overall quality of services differs between districts for several reasons: (1) Financing: some community districts have more resources to support the system then the others and to invest (e.g. city center - Kentron). (2) Fees: some districts manage to raise the waste fees and their collection rate. (3) Location: districts are situated at different distances to the Nubarashen landfill. This affects severely their operational costs. (4) Technical equipment: from the beginning of the operation in the 1990s, some district communities were better technically equipped than others. (5) Management: some community districts find better management than others. At present, the following collection schemes are in use: • “Horning” system; • Waste collection from garbage chutes; • Waste collection from pre-collection points; With the “horning “ system, waste is collected by the households on their own premises, usually in areas with single family units, in plastic bags and is brought out to the collection vehicle when the driver signals with the horn. The collection frequency is about twice per week. 6543P06/ Final Report 4-1 There are in total 3,901 apartment buildings equipped with garbage chute systems for MSW pre-collection. The number of the buildings with garbage chutes varies from one district to another. The MSW from garbage chutes is collected every 3-5 days. Transfer of waste to the collection vehicle is generally labor-intensive and time consuming work. The garbage chutes and the storage rooms at the end of the garbage chutes are a major source of odors, nuisances, hygienic problems and vector propagation. On the other hand, the garbage chutes are entirely inside the building. This means that only building residents have access to the garbage chute. So contrary to the pre-collection points at curb side, neighboring offices and shops cannot use the chutes for disposal of their waste. Solution of the serious hygiene problems connected with the garbage chutes as well as the inefficiencies caused to the operation of the collection companies will require the coopera- tion of the condominiums and other common-property organizations, which are chronically short of funds. The financing of improvement to or elimina- tion of the garbage chutes (if found to be advisable) would require funding, which may hinder the implementation of an optimized collection system. Buildings of up to 6 floors do not have garbage chutes. In these areas a pre- collection point system is used. Pre-collection points are places where one or more open 700 liter containers are located. These containers are locally produced robust metal containers having a slightly reverse truncated pyra- mid form and no lid. The containers are without wheels and are usually placed directly on the ground. Pre-collection points are located along the roads near the family and low-rise buildings, in the streets, near the hotels, restaurants, hospitals, shops. They are equipped with one to 5 containers, depending on the number of people living in the neighborhood. In some areas the containers are placed within visual barriers to hide the containers from sight. The number of containers required is estimated by the collection companies. However, sufficient containers are not placed at the collection points, and the collection is irregular. Therefore the pre-collection points are usually overloaded. This also encourages waste burning; which is common. 4.1.2 Commercial Waste Collection of waste from large commercial waste generators is carried out by communities’ waste companies in accordance with an agreed schedule which, in its turn, is developed considering the amount of waste collected in served waste containers or bins. Waste containers are installed either on the premises of large commercial units (e.g. wholesale markets) or on public territory (e.g. for offices). Most of the waste containers are open metal containers with a capacity of 0.4 – 1.0 m3. 6543P06/ Final Report 4-2 4.1.3 Equipment Utilized in Waste Collection There are two groups of collection trucks used for MSW collection in Yerevan: compaction trucks and dump trucks. Nearly the entire fleet is Russian-made. 87% of the vehicles are between 15 to 20 years old. The age of the fleet highly reduces the availability of the vehicles, which have to be repaired frequently. For the collection of MSW from the collection points preferably specialized collection trucks are used. These collection trucks are equipped with a side- mounted hydraulic grabbing device for the containers. The containers are lifted on top of the truck-body, where they are tipped and the contents falls into the opening of the body. Once inside the body the MSW is compacted hydraulically. However, the companies do not have sufficient compactions trucks at their disposal and waste is also collected from pre-collection points with dump trucks. In this case, waste is loaded with shovels onto the truck. Each collection vehicle with driver and workers is assigned to its own collection route. In general, MSW collection in Yerevan is to be undertaken between five and eleven a.m. When fully loaded, the vehicle transports the waste directly to the disposal site and then returns to finish their route. Given the frequent breakdowns of vehicles, the collection frequency and the collection schedules are not always kept. In any case, a maximum of two round-trips per day from the source to the landfill is possible. 4.1.4 Current Recycling Activities The formal system for solid municipal waste collection and disposal does not include separate collection, sorting, or any type of waste treatment. However, waste separation is done in a number of different informal ways. Major waste separation is being done by scavengers at the landfills. The scavengers are mainly collect metals, paper, plastics, food waste and in the winter – combustibles. The sorted out useful fractions are loaded into private cars and brought to the buy-in centers. According to the local experts, there are some 30 to 40 buy-in centers in Yerevan specializing in various fractions of the MSW. Some of the collection points are situated directly near the dumps. Most of the centers, however, are organized rather informally. They are often situated in the private garages, backyards, etc. Another example for the semi-formal separate collection is related to paper and cardboard recycling. A company has established several buy-back centers specializing in paper and cardboard collection. Collected material is then processed into egg boxes and other products. There are also small-scale enterprises for plastic recycling in Yerevan. They organize collection points themselves and process the collected plastic waste into plastic basins, pipes for sewage system, shoe soles, etc. The current recycling efforts, which rely solely on small-scale private initiative, are not adequate to recover a reasonable portion of the most 6543P06/ Final Report 4-3 valuable raw materials and have serious deficiencies with regard to health and safety aspects. Although these efforts could be further developed, some practices should eventually be ceased (scavengers and waste picking from collection points). Waste reduction, recycling and reuse should be part of an overall waste management strategy and concept. 4.2 Basic Design Requirements for Waste Collection In order to perform an appropriate MSW collection service, there are certain general requirements which need to be taken into account when optimizing MSW collection: Cost effectiveness • Rapid and reliable loading of MSW − MSW should be placed in containers or large bags, ready for fast loading; − Manual loading with fork and shovel should be reduced to a mini- mum – it is labor intensive and time consuming; − Vehicles should be reliable, i.e. they should be regularly main- tained and not older than 10 to 15 years. • Appropriate number of containers for the agreed collection frequency − Number of containers and frequency need to be coordinated. If containers are often overfilled, more containers need to be placed; − The number of containers should be designed so that these are mi- nimum 70% full on average, when collected, but they should never be overflowing; − Additional collections may become necessary after special days such as Christmas, if necessary. • Use vehicles optimized for MSW collection − Prefer compaction vehicles and use open dump trucks rarely and in exceptional cases only; − As big as possible vehicles to increase the proportion of collection time against the necessary transportation time of a vehicle, taking into account access road conditions to the garbage chutes and pre- collection points. Cleanliness • Pre-collection points should look clean − Regularly clean the containers and pre-collection points; − Motivate people to always place waste in containers by public awareness campaigns, the tariff structure and other measures; − Determine responsibility for cleanliness of pre-collection points, whether owner, condominium or collection company; • Control odor and animals, i.e. containers should preferably be covered with lids. • Ensure that all MSW is collected from the area. 6543P06/ Final Report 4-4 4.2.1 Building Structures and Collection System In Yerevan there are 4 types of generators, which require different collec- tion structures: • Multi-apartment buildings (MAB) without garbage chutes; • Multi-apartment buildings (MAB) with garbage chutes; • Family housing area, i.e. one and 2 storey houses; • Public institutions and commercial entities. For each of the 4 generator types, the Consultant evaluated the possible options of pre-collection and collection. Given that most of the collection fleet requires replacement, the Consultant also analyzed alternative systems, requiring different containers and vehicles. This situation is a special opportunity, which will not return within the next years. 220.127.116.11 MABs without chutes and large institutions and commercial businesses Presently these generators are served by pre-collection points. This principle also shall be continued in the future. Immediate action (before implementation of PPP) • Extension of the number of containers at those pre-collection points where frequent overloading of containers is observed and • Replacement of broken containers, inappropriate for loading; • Both actions need to be carried out by the district communities, to whom the containers belong; • Frequency of collection at those pre-collection points should be in- creased. Short and medium term • The Consultant evaluated 3 different options for pre-collection points. Besides the existing “Russian system” (open 750 l containers), the Euro-container system (1,100 l wheeled containers with lids) and the system “OMB” (2,400 l containers with lids) have been evaluated. 6543P06/ Final Report 4-5 Table 1: Pre-collection point systems “Russian system” Euro-container “System OMB” system Advantage • Low in investment; • Highly flexible • Nice appearance • Containers can system with regard • Lid is always closed, easily be produced to location of the when not in use – locally; pre-collection point odor and vermin • Vehicles can easily – Pre-condition: prevention. be repaired; paved way from • Low labor require- • Easy access to spare pre-collection point ments – one driver – parts in Yerevan; to the road. one loader - if MSW • Low labor require- • Frequent cleaning is in pre-collection ments – one driver – of container with containers. one loader – if MSW container cleaning • Frequent cleaning of is in pre-collection vehicle. container with con- containers. tainer cleaning vehi- BUT cle. • No lids or covered containers • No container cleaning vehicle available. All three systems are suitable for Yerevan2. As the Consultant understands, collection services shall be tendered in the short term, taking into account recommendations of the Task 5 report. Given that all systems are suitable, it is recommended to leave a system decision open to the bidders. The bidders shall offer their special system, and the most cost-effective system shall be taken. Depending on the number of service areas tendered, several systems could perceivably co-exist in Yerevan, each one in a different collection area. 18.104.22.168 MABs with Garbage Chutes Presently the rubbish chutes are a nightmare of MSW collection. In 90% of the cases, the MSW needs to be manually shoveled from the small garbage chambers onto the truck, which is a labor intensive and time consuming job. Additionally, the working conditions are below any reasonable health and safety standard. 2 If the Russian system can be provided with lids or tightly closing covers. 6543P06/ Final Report 4-6 Immediate action • A remedy of this situation requires serious investments in the garbage chambers at the chutes or in placing pre-collection points in these ar- eas. Given the existing financial situation, there are no funds to carry out such action. • A task force has been constituted to investigate the problem in detail. Short and medium term • The Consultant compared 2 possible solutions to improve the present bad situation: • reconstruct the garbage chutes to be able to place wheeled containers or • to close the chutes and replace them by pre-collection points. Table 2: MSW collection from MABs with garbage chutes Reconstruction of garbage Introduction of pre- chutes collection points Unit costs (average 18,000 – 20,000 AMD/t 10,000 – 12,000 AMD/t for Yerevan) Investments for AMD 3.0 – 3.5 billion AMD 1.0 – 2.1.billion total Yerevan Advantages • Convenient for users, • Rapid access and • MSW is hidden away collection of MSW. Disadvantages • Investment required for • Inhabitant of the MABs reconstruction of gar- have to carry their MSW bage chute chambers; to the pre-collection • Risk that containers may point overflow, if not con- • The pre-collection point trolled by the condo- is visible and if not well miniums janitor; taken care of, it looks • More time needed for ugly after a while. collection than from pre- collection points; • More expensive than pre-collection points; • Chutes are contaminated with asbestos. It was at first recommended to shut down the garbage chutes and to replace them with pre-collection points. This was discussed in various stakeholder meetings and it was recognized that this would not be easy to implement, since it is the decision of each condominium and there is significant resis- tance. Alternatively it might be possible to leave the decision to the condo- miniums, whether to upgrade their garbage chambers or to place pre- collection points. However, this requires that whatever systems are used these must be based on a standardized wheeled container system. 6543P06/ Final Report 4-7 From the point of view of the competent authority, which soon will be the City of Yerevan, there are the following options. • Issue a by-law, requiring the condominiums to close the chutes, recon- struct them to serve for wheeled containers or identify other viable hygi- enic solutions for use. • Introduce an elevated tariff payable by the condominium or by each person living in the respective condominium, charging for the elevated costs and health protection measures for collecting the MSW from the garbage chutes, if these would not be upgraded. 22.214.171.124 Family housing areas Presently the family housing areas are served by a horning system, i.e. the people need to wait with their waste until the collection truck comes by, signaling its appearance. This system is inconvenient for all those, who need to leave for work and cannot wait until the collection truck comes. Often collection is carried out with open dump trucks. Immediate action • The best action would be to use small rear-loading compaction trucks (10 to 16 m³). However, presently such trucks do not exist in Yerevan in sufficient number. Therefore, no immediate action is recommended, because procurement of new trucks would take some time. Short and medium term • The Consultant compared 2 possible solutions to improve the present bad situation: • Improve horning system by using rear-loading compaction trucks or • To distribute individual bins (60 to 360 l) to each house. 6543P06/ Final Report 4-8 Table 3: MSW collection from family housing area Improved horning system Individual bins Unit costs (average 16,000 – 19,000 AMD/t 18,000 – 20,000 AMD/t for Yerevan) Investments for AMD 1.5 – 1.9 billion AMD 1.5 – 2.0.billion total Yerevan Advantages • No waste containers • Inhabitants can leave for needed work • Only one loader needed • MSW is safe against cats, dogs and other animals as well as wind Disadvantages • Somebody needs to be • Scavengers may search at home when the truck the bins passes • Costs are at the upper • If bags are placed at the range compared to the curbside, the bags may improved horning sys- be destroyed by scaven- tem gers, cats, dogs and other animals • More time consuming in collection than bin sys- tem It is recommended to continue with the horning system only until the PPP change over. The improved system would be changed to a standardized bin system. This would require: • Standardizing the bin-types equipped with lid (size 60 to 360 l), which will be procured by the contractor, and • Equipping the collection RCVs with hydraulic loading devices for the standard bins. 4.3 Recommended Improved Collection System In the immediate term the major actions for Yerevan are: • Install a weighbridge at Nubarashen landfill (28,000,000 AMD); • Increase of the number of containers by about 1,000 further containers and replace the outworn containers (estimated 500 to 1000 pcs) – costs: 70 – 90 million AMD. One of the problems of placing sufficient numbers of containers are large cardboard boxes, which rapidly block the contain- ers, while even the design capacity of the container has not been reached. 4.3.1 Transfer Stations for MSW The Consultant evaluated the case that all present dumpsites will be closed and only the landfill of Nubarashen will be upgraded and continue to be operation. In this case MSW might have to be transported up to 25 km to the landfill. Instead of directly transporting the MSW to Nubarashen landfill, 6543P06/ Final Report 4-9 the alternative could be to construct transfer stations in the northern part of Yerevan. The Consultant evaluated the break-even distances of the construction and operation of transfer stations under the conditions of Yerevan versus direct transport. The result was: • If collected with compaction RCV, the break even distance that makes a transfer station more financially viable is at 25 to 35 km. The distance from the different district communities to Nubarashen landfill in general is less than 25 km. • If collected with open dump-trucks the break-even distance is 15 to 20 km. However, it is recommended to reorganize MSW collection and to reduce the use of open dumper trucks to a minimum. The result is that with an improved MSW collection system, and under the condition that only Nubarashen landfill will be continued, the construction of transfer stations is not economically justified. Therefore the construction of transfer stations is not recommended. Costs for transfer are not included in the collection costs in all calculations carried out. 4.3.2 Source separation and recycling There is a widely accepted assumption in Armenia that the people of Yerevan are not prepared for source separation and never will be. Taking into consideration the experience of other countries, this can’t be true. The Consultant knows that the introduction of source separation is a long lasting process over 10 to 20 years, but in the name of resource protection and resource recovery, a pilot project should be started and the buy-back centre system supported. • Buy-back centers Buy-back centers may be supported with public awareness campaigns with regard to MSW management. Additionally, the tariff system for commercial waste might also support the buy-back centre system, if this will be a pay-as-you throw system. Tariffs are subject of the Task 4 re- port. • Pilot project in the short term A pilot project should be started with placing 20 recycling banks at promising places in Yerevan, such as shopping malls, large shopping centers or markets or other highly frequented and easily reachable places by car. The recycling banks should consist of several containers, one for paper/cardboard, one for glass, one for plastic and one for metals. The results of the system should be watched for about 2 years, and conclu- sions be drawn and subsequent actions be decided. 6543P06/ Final Report 4-10 The investment for such system is estimated in • 20 recycling banks with 4 containers each: AMD 8 million • One collection truck: AMD 32 million • Extension of the recycling bank system after 2 years, if successful Depending on the results, the system might be extended to up to 1,200 recycling banks to cover the complete city, serving on average 1,000 people by each recycling bank. • Further extension to a door to door system in the long term (in 10 years) • Depending on the political goals source separation might be extended to door to door systems, in order to further increase separately collected materials. 4.3.3 Composting With regard to composting, also a pilot project is recommended: green waste composting. Although presently green waste is partially burned even within urban areas, this will come to a stop with increasing environmental awareness of the population. Green waste compost usually produces a high quality compost. The pilot project could be used to test: • Whether green waste would arrive at the plant; • Whether composting would work; • Whether there would be a demand for compost. The Consultant estimates the investment for such composting plant to be about 240 million AMD. Such composting plant should be equipped with a mobile shredder, mobile screen, a loader and a small laboratory. The Consultant recommends to start with about 2,000 t/a of green wastes from parks, green along the roads, tree maintenance. It could be located at the Nubarashen landfill site. The collection of source separated food waste for composting is not recom- mended, because source separation of food waste does not work in MAB areas. 4.4 Cost Estimates for the Improved System If a system change should be decided, the required investments are in the range of 4,000 to 8,000 million AMD, depending on the system imple- mented and the number of independent collection companies, which will be employed. 6543P06/ Final Report 4-11 5. Street Cleaning and Winter Services Performance 5.1 Present Street Cleaning and Winter Services Tasks The responsibilities regarding street cleaning generally include: • Street sweeping • Street sweeping and pick up of the litter from the streets; • Watering the streets in summer for cooling purposes as well as to sup- press dust emissions by traffic; • Street flushing (washing) to remove dust and litter ; • Cleaning of the footpaths and sidewalks from dust and litter; • Manual cleaning of subways. • Snow and ice cleaning • Snow and ice removal from streets and sidewalks and spread of the mixture of grit and salt; • Manual removal of snow and ice from the stairs. Street sweeping is mainly performed by flushing (washing) the streets mechanically to move dust and litter towards the curbstone and subsequent manual cleaning of the curbstone. The cleaning frequency is determined by the priority given to different streets depending on the traffic flows. Arabkir employs two modern mechanical suction-sweepers. Cleaning of sidewalks, foot-paths, squares, and similar is mainly performed manually by street sweepers and litter collectors. Furthermore in Summer time the streets are watered, using 0.3 liters per m² in order to cool the town. The frequency may be up to twice per day. Snow and ice removal is done with snow ploughs and old mechanical grit/salt spreaders, spreading dry salt, manually supported. 5.2 Shortcomings of the System The Consultants investigations have identified low standards of urban cleaning. Urban cleaning focuses on the main roads of the city, leaving other areas notcleaned for long intervals. The Consultant has identified the following reasons for this situation. • The major reason for the poor performance is the poor financing, caused by the need to subsidize MSW collection management through payments for street cleaning. • Fragmented organization into 14 operating companies, each maintaining their own maintenance staff and workshops, spare parts store and opera- tions; 6543P06/ Final Report 5-1 • Very short contract duration of only one year; • No competition when the cleaning and collection contracts are extended; • MSW collection and street cleaning contracts do not clearly specify the service and performance standards of MSW collection and street clean- ing. From a more technical-operational point of view, the Consultant identified the following major constraints: • Available vehicles and equipment are old and outdated; • Lack of equipment for manual and mechanical cleaning; • High maintenance costs for existing machinery and an low availability around 50 to 60%; • Consequences of the last years construction boom taking place in Yere- van, causing multiple vacant and unpaved areas contribute to the air pol- lution with dust. Low level of the waste collection services, causing permanent increased littering due to waste not being placed in the pre-collection points. 5.3 Service Requirements for Street Cleaning and Snow Control Generally street cleaning and snow control have to fulfill the following service requirements: • Minimize health risks by preventing insects, vermin and epidemics; • Remove dust, leaves and litter from streets, sidewalks and footpaths as well as greened areas along the roads; • Remove litter and dust from public areas; • Collect waste from litter bins – adjust frequency to velocity of filling; • Optimized cooperation between manual and mechanical cleaning; • Contribute to a better climate through water spraying; • Keep streets clean from ice and snow in winter time, to prevent acci- dents. Major streets and squares are cleaned of snow within 2-4 hours from stop of snow-fall, less important roads should be cleaned within 8 hours. • Provision of timely, cost effective and affordable services; • Provide special services for special or irregular events. The areas to be cleaned include all public areas, usually specified in the contract, such as streets and roads, squares, sidewalks, subways, green areas, and other public areas. Not included are private areas (e. g. owned by condominiums). 5.3.1 Definition of Degree of Cleanliness There is no generally recognized international definition for the degree of cleanliness. However, many German towns have adopted the term “clean to the eye”. An area is then “clean to the eye” if there is no coarse fouling or 6543P06/ Final Report 5-2 littering on the path, in the greened border, on the ground around tree trunks, in the gutter and around litter bins. Furthermore, no overfilled litter bins and waste containers and illegal waste dumps shall be within view. 5.3.2 Priority of Streets and Cleaning Frequencies The Consultant recommends a more differentiated street classification system with cleaning frequencies and priorities as shown in Table 4. Table 4: Proposed Classification and Cleaning Frequencies Street Cleaning Snow control Road Footpath Litter Special Road Pedes- cleaning cleaning bins services cleaning trian over- passes, bus stops Cleaning categories Class Frequency /week Priority National roads A 1x 1x 1x 1x I I Moving traffic District roads B 1x 1x 1x 1x I I Moving traffic Pedestrian zones, public C n.a. 7-14x 7-14x 1x I I spaces Shops, cafés, pubs restaurants, cinemas, theaters, amusement arcades, heavily frequented by public, delivery traffic, trees, seating areas, multi-story buildings Shopping streets D 7x 7x 7x 1x I I Shops, cafés, pubs, restaurants , cinemas, theaters, high fre- quency of people, moving and stationary traffic trees, multi-story buildings Streets with some shops E 1x 2x 2x 1x I I Shops, cafés, pubs, restaurants, pedestrians, moving and stationary traffic trees, multi-story buildings Residential streets F 0.5x 1x 1x 0.5x II II* Pedestrians, moving and stationary traffic, trees, multi- story buildings Service roads G 0.25x 1 to 2x none 0.25x III III* Access traffic, trees, detached houses Industrial zone roads H 1x 1x 1x 0.5x II III* *) with bus service priority I Furthermore the following future approach of footpath cleaning is recom- mended: • cleaning of footpaths/sidewalks along roads of municipal and district importance to be carried out on behalf of the municipality by the cleaning operator. 6543P06/ Final Report 5-3 • Snow cleaning shall be left to the adjacent residents. Only the adjacent residents are able to clean a strip of 1 m width within a few hours from snow, and thus prevent the snow to be compacted and become icy. 5.4 Recommended Improved Street Cleaning System The Consultant carried out a street inventory of those streets, which are presently cleaned and which are required to be cleaned in the future. For this the Consultant visited all the 12 community districts, where data of different quality was received. There is a total road length of approximately 540 km, of which 390 km are equipped with sidewalks. The Consultant analyzed possible improvements of the street cleaning services of today. The following recommendations have been developed: • Street cleaning Modernize the present truck fleet and replace the street flushing (wash- ing) system by 13 modern suction-sweeping trucks. • Footpath cleaning Organize footpath cleaning in teams with 4 sweepers and a chargehead. Equip manual footpath sweepers with hand carts, (costs approximately 180,000 AMD, number required 106), street sweeping equipment and uniforms which could be a specialized cart or a 120l Eurobin. Dispose the street cleaning waste into the pre-collection points for MSW. Where there are no pre-collection points, collect street waste in plastic bags, place the bags along the street and organize separate collection service for the bags at the end of the shift. For the transport of staff and the collection of the sweeping waste 33 small trucks (3.5t) are required. • Litter bins Litter bins shall be collected separately from footpath cleaning. Two drivers with 2 vehicles (2.8 t) will collect the existing 40l bins. • Snow control Introduce snow and ice control with pre-wetted salt. Subcontract snow control activities to companies, such as container services, which have trucks which can be equipped with snow ploughs and salt/grit spreaders. The investments needed for the system are: 2 emergency trucks and 21 salt/grit spreaders and snow ploughs as well as a brine tank. • No modification of other services is required. • Depots Implementation of a minimum of 2 fully equipped service depots for all services of street cleaning and snow control and a depot in Kentron, serv- ing only for manual cleaning and snow control tasks. If more than 3 cleaning operators should be employed further depots become necessary. • Other items • Reduce litter through regulation and public education; • Properly enforce and monitor street cleaning and snow control. 6543P06/ Final Report 5-4 5.5 Cost Estimates for the Improved Cleaning System The Consultant developed a model, which was used to estimate the costs for the future street cleaning. The costs estimated include the following ser- vices: • Road surface cleaning using suction-sweeping machines; • Footpath cleaning; • Collection of litter bins; • Regular special services; • Snow and ice control with pre-wetted salt spreaders; • Snow and ice control of pedestrian overpasses, bus stops and under- passes; • Spreading of ice control agents on footpaths. The estimate was carried out for: • Yerevan as one complete zone and • Yerevan split into 2 Zones: Yerevan West (Arabkir, Ajapniak, Malatia- Sebastia, Shengavit, Davtashen) and Yerevan East (Nork Marash, Nor Nork, Avan, Erebuni, Kanaker-Zeytun, Kentron, Nubarashen), as used in the Task 2 Report. Table 5 shows the result of the cost estimate in investments and annual service costs (including CAPEX and OPEX). Table 5: Result of cost estimate Investment Annual service costs Without VAT With VAT th AMD th AMD/year th AMD/year Yerevan total 2,107,200 1,791,000 2,149,000 Yerevan East 1,206,800 1,092,000 1,310,000 Yerevan West 1,016,800 794,000 953,000 Total Yerevan East and West 2,223,600 1,886,000 2,263,000 As can be seen, there is a slight difference on whether 2 areas would be served or only one, in both, investments and annual service costs, which however, is about 5%. Such difference is within the accuracy of the esti- mate, and thus cannot be accounted for as real difference. Thus both zoning alternatives are supposed to have similar costs. 6543P06/ Final Report 5-5 6. Waste Disposal 6.1 Present System for Waste Disposal The city of Yerevan presently employs 4 landfills for the disposal of their MSW. These are: • Nubarashen landfill in the south (close to Nubarashen district), receiving 70% of the MSW, • Jrvezh landfill in the East (close to Jrvesh village), receiving 15% of Yerevan MSW and only about 3 years old, • Spandarjan landfill in the West, receiving 10% of Yerevan MSW and also about 3 to 5 years old, and • Sasunik in the North-West, outside Yerevan belonging to Ashtarak City, receive about 5% of Yerevan MSW. All landfills are in a bad shape and all of them in principle have the same problems. None of the landfills is an engineered sanitary landfill, i.e. they are not equipped with any lining or functioning leachate and gas capture systems, and are operated in a top to bottom procedure, which triggers enormous environmental problems • Significant leachate outflow from the slopes is polluting adjacent open surface water. • There is no groundwater protection, save the natural ground, creating the risk of leachate polluting the ground waste. • Landfill slopes are close to collapse. • Landfill fires and irregular waste create heavy air pollution and health risks. • Inadequate disposal of slaughterhouse waste creates health risks. • Landfill gas, to the extent it is generated, is not captured, contributing to global warming. • The present costs are almost negligible, about 60 AMD/m³. • They lack weighbridges for measuring the receive waste quantity Thus all landfills would need to be upgraded to international acceptable sanitary standards, if continued in operation or to be closed. 6543P06/ Final Report 6-1 6.2 Basic Required Sanitary Standards for the Landfill 6.2.1 Construction and Operation Requirements Construction requirements • Construction of a bottom liner with leachate drainage; • Leachate to be captured and specifically in case of Yerevan to be re- circulated to the landfill body; • Coverage of landfill with liner and re-cultivation layer; • Installation of LFG wells flaring or utilization. Operation requirements • Bottom to Top placement of the waste (thin layer method); • Prevention of fires; • Minimization of odor emissions; • Prevention of animals and human beings living and scavengers working on the site; • Minimization of wind-blown waste and birds. 6.2.2 Number of Future Landfill Sites for Yerevan The Consultant carried out an assessment of the suitable number of future landfills in Yerevan. As a result, the Consultant recommends to only develop and operate one single landfill site in the future, and to close down and re-cultivate all other sites. There are the following reasons: • The operation of several sanitary landfills for a town like Yerevan is more expensive than one single one, even if taking into account the higher transportation costs. • The amount of 300,000t of waste per year can be disposed easily on a single landfill. • Environmental risks and social impacts exist only at one site. • One landfill consumes less waste than several. • Monitoring is easier at one than at several sites. The Consultant furthermore assessed which site to select as the future sanitary landfill site. Nubarashen landfill was selected as the most suitable: • Most districts are at a distance of less than 25 km to Nubarashen landfill; • There is a good access road; • There is sufficient space for extension of the landfill; • The site is located on a clayey ground; • Groundwater is at 40 to 60 m below, groundwater contamination is low; • The site hosts an already registered CDM project; 6543P06/ Final Report 6-2 • The development of a new landfill site would probably cost considerable more investment and have additional negative impacts. 6.3 Recommended Improved Waste Disposal Based on the recommendations to make Nubarashen landfill the only future landfill of Yerevan3, further assessment of the measures needed to upgrade the landfill were carried out. 6.3.1 Proposals for immediate sanitary improvements at Nubarashen Landfill Immediate action is required to at least limit the heaviest environmental pollution: • The sites should be staffed (guarded) continuously to track down, channel or stop illegal dumping. • Some waste types should be landfilled adequately by burying immedi- ately (slaughterhouse waste) or be banned. • The existing leachate pond4 needs urgent repair. • Leachate re-circulation to the surface of the landfill should be started. • Animals should be removed and basic health protection measures (air pollution control) for landfill staff should be implemented. • The top to bottom landfill operation should be replaced by the thin layer operation. • Install a weighbridge. 6.3.2 Nubarashen Present and Future Layout Nubarashen landfill is located about 12 km south of the center of Yerevan. 5.05 million m3 of waste have been deposited at the site since it was estab- lished in 19605. The existing site (Zone A and B) as well as possible extension areas (Zones C and D) are shown in Figure 2. As can be seen from Table 6, the landfill has a remaining presently devel- oped landfill volume of 1 million m3 in Zone B6 with a lifetime of 2 to 3 years. Further areas proposed to be developed are Zones C for industrial waste and D for MSW, as well as in the long term a further extension to the west 3 Accepted by the Working Group as Government Consultation Body 4 The remnants of a leachate pond were identified, but no information on the date of construction or former uses was available from the City Administration or the operator. 5 The official estimate of the Yerevan City Administration is 8 million m³. 6 Zones are arbitrarily introduced designations of areas of landfill operation or future operation used in the figures to ease identification and understanding of locations. 6543P06/ Final Report 6-3 outside the present landfill plot. Both zones (C and D) will be constructed as sanitary landfill consisting of a double liner system (mineral and geomem- brane), leachate drainage system and degasification. The landfill construc- tion will be carried out in line with mitigation measures for Zone B, particularly stabilizing the slopes and capturing leachate of Zone B, too. Zone C: Industrial Covered area Leachate pond (zone B north) Entrance Possible future Composting extension area area Access road Zone D: MSW Closed Dumping area Zone A (zone B south) Tipping front 500 m Figure 2: Map of Nubarashen landfill. 6543P06/ Final Report 6-4 Table 6: Landfill areas and capacities at Nubarashen Landfill Area Volume Average Estimated ha m³ height lifetime m years Existing areas Zone A 16 2,000,000 12.5 n.a Zone B North 11 2,200,000 20 n.a Zone B South 6.5 850,000 13 n.a Total used 33.5 5,050,000 Remaining Volume 17.5 1,000,000 6-7 2-3 Zone B Extension areas Zone C (industrial 1.5 375,000 25 18 waste) Zone D (MSW) 4.5 3,000,000 45m 9-10 Extension to West 3,000,000 – 9-117 (MSW) 4,000,000 Total MSW 6,000,000 – 18-20 7,000,000 A further extension of Nubarashen landfill to the west, outside the present landfill plot, once Zone D is filled, is possible. Such area could host another 3 to 4 million m³. Establishing such extension will need a new permit procedure. In the report on Task 2 a pilot plant for green waste composting was recommended, and Nubarashen landfill was mentioned as one possible site. Next to the landfill entrance an area of about 1 ha is available to set up this composting pilot plant with a capacity of up to 2,000 t/year, which could be extended later. The costs for construction of Zones C and D amount to approximately AMD1.6 billion (US$ 5 million) 6.3.3 Future operation The operational measures recommended as immediate action also apply to the new Zones. A monitoring program is recommended to track environmental pollution. The monitoring consists of at least four ground water wells, air pollution control devices and an automatic monitoring weir downstream the leachate pond in the adjacent creek. The unit operation costs are estimated to amount to about AMD 1000/t waste (US$ 3.12/t) not including investment costs. These costs do not include the building up of reserves for after care, landfill coverage and LFG collection and flaring/utilization. 7 Lifetime might be longer, subject to the longer term MSWM measures proposed in the report on Task 5. 6543P06/ Final Report 6-5 6.3.4 Evaluation of COeq emission reduction potential The feasibility of landfill gas extraction and flaring or utilization and electricity generation was assessed by the Consultant. Nubarashen landfill is already subject to a registered CDM landfill gas project. The estimate of the project’s CO2eq emission reduction potential through flaring or electricity generation was split between Zone B (subject of the existing CDM measure) which is to be closed in 2010, and the new Zone D to be opened in 2011. It is assumed, that the flare and / or the electricity generator will be used for the gas yield of both zones. The following table shows the results of the estimates. Table 7: CO2eq reduction potential for Zones 2 and 4 Annual average reduction of UNFCCC ap- Practical approach CO2eq proach (First order decay model) t CO2eq /a t CO2eq /a Zone B ~ 61,000 21,000 -43,500 falling tendency, given that no new Even lower potential waste being added after 2011. expected, because Zone B is permanently burning Zone D ~ 100,000 n.a. increasing tendency, due to active landfill As a result it can be deducted that for Zone B little LFG gas yield and thus a low CO2eq emission reduction potential may be expected, which only will be viable with a flare. The expected LFG yield of Zone D is significant, and electricity generation may be feasible. Within the scope of this assignment it was not possible to prepare a full-fledged feasibility study for a CDM LFG capture and utiliza- tion project. In order to do so, the commercial details of such a project would need to be known. However, some exemplary calculations were carried out to illustrate the potential benefits. It should be noted that the benefits accruing to the Municipality or the RA Government from a CDM Project will depend upon the structuring of the project by ownership and investment. A definitive evaluation of the benefits depends upon having a reliable impression of the project structure. Regarding expected benefits to the Yerevan Municipality, it should further- more be noted that without any investment, without know-how in design or operation of the plant and as a consequence without decisively influencing the contractual structures, expectations of benefits to the Yerevan Munici- pality should be kept at a low level, although the monetary values of the CER and electricity revenues are not insignificant. 6543P06/ Final Report 6-6 6.3.5 Closure of Landfills and Dumpsites When Zones C and D of Nubarashen Landfill will come into operation the present landfills of Jrvesh and Spandarian should be closed and re- cultivated. The sites may be further used as C&D waste disposal sites. Furthermore no further MSW shall be delivered to Sasunik landfill. The costs for the re-cultivation measures are shown in Table 8. Table 8: Costs for closure of landfills and cleaning of informal dumpsites Site Measures Costs Jrvesh Recultivation layer, fencing, 20-30 million AMD use for C&D waste (60,000-100,000 US$) Spandarian Recultivation layer , fencing, 100 million AMD use for C&D waste (320,000 US$) Informal dumpsites Removal of waste and trans- 150-200 million AMD in Yerevan port to Nubarashen landfill (475,000-620,000 US$) Also, once the improved collection services start, all informal dumpsites in Yerevan have to be cleaned up by removing the waste and transporting it to the Nubarashen landfill. The informal dump sites host approximately 30,000 t throughout the city. In total 10,000 truck loads will be necessary for the clean up. Enforcement measures must be improved to prevent further informal dumping. 6.4 Cost Estimates for the Improved Disposal 6.4.1 Investment Costs The construction costs for the two extension areas (zone C and D) is ap- proximately estimated. The following table provides an overview on the cost for the various landfill components. The total investment amounts to approximately 1.5 billion AMD equal to US$ 4.7 million. Table 9 Breakdown of construction costs for landfill extension Component unit cost No of units total cost [AMD] [AMD] Landfill construction (incl. liner, dams, roads, pipes, shafts, degasification) • zone C (industrial) 18,000/m2 15,000 m2 270 million • zone D (MSW) bottom 21,000/m2 45,000 m2 945 million • zone D (MSW) slope to 4,000 /m² 21,000 m² 84 million Zone B Leachate pond (dam, li- ner,pipes) 8,000/m3 2,000 m3 16 million 6543P06/ Final Report 6-7 Flare and LFG motor Available from project in Zone B or being brought by CDM contractor for Zone D. Equipment (additional bull- dozer, loader, weighbridge, monitoring devices, pumps, electricity generator) 200 million Logistics (office building, entrance, fence) 80 million VAT not included total 1.595 billion 6.4.2 Operation Costs The Consultant also carried out an operation cost estimate. This is shown in the next table. The operation costs are estimated to some 1000 AMD/t (3.2 US$/t). The increase of operation costs from currently 60 AMD/t to 1000 AMD/t is due to a higher demand in energy (compaction, more machines, leachate circula- tion equipment) and more staff (24/7 operation, environmental monitoring). 6543P06/ Final Report 6-8 Table 10 Estimation of operation costs Item Quantity Unit Unit Total costs costs Fuel 3000 h/a th AMD/a 2 Bulldozers consumption 20l/h 0.4 th AMD/l 48,000 Personal 1 x manager 2,016 th AMD/a 2,016 1 x secretary 691 th AMD/a 691 1 x accountant 1,516 th AMD/a 1,516 2 x dispatcher 1,395 th AMD/a 2,789 2 x drivers 1,516 th AMD/a 3,032 1 x mechanic 1,395 th AMD/a 1,395 3 x entrance 691 th AMD/a 2,074 4 x helpers 691 th AMD/a 2,765 3 x guards 691 th AMD/a 2,074 Electricity 300 kW th 2000 h 0.0192 AMD/kWh 11,520 on invest- Maintenance 5% ment 75,000 Materials during operation 78,000 Administration and Lab. 10% 23,087 Monitoring 8,000 on invest- Insurance/taxes 1% ment 15,000 Contingencies 10% 27,696 Total 304,653 Approx. operation costs per t (OPEX) – 300,000 t/a AMD/t 1000 These costs do not include the building up of reserves for after care, landfill coverage and LFG collection and flaring/utilization. 6.4.3 Total costs The total costs take into account both operation costs (OPEX) and invest- ment costs (CAPEX). In order to give an idea, what “gate fees” might be expected, the Consultant has estimated these fees. Taking into account a discount rate of 20% for the capital investments the “gate fees” arrive at a cost of about 2000 AMD/t. 6543P06/ Final Report 6-9 7. Configuration Plan 7.1 Configuration Options The reports on Tasks 2 to 4 focused on the definition of minimum accept- able and appropriate technical and financing standards for MSWM in Yerevan City and based on these standards the development of a concise “Base Level Configuration”. This Configuration includes improved MSW collection and transportation and a Landfill upgraded to international standards. In order to achieve these minimum standards major efforts will be necessary to improve the technical, legal and institutional situation. Thus until a full implementation of the “Base Level Configuration” it still can be expected that several years will be needed. However, international MSW management goes beyond such minimum MSWM standards (collection and disposal) and integrates different forms of recycling and energy recovery. The Consultant has identified several possible configurations of possible integrated MSWM, implementable in the medium to long term in Yerevan, as shown in the next box. Nevertheless the Consultant believes that such extended MSWM systems should only be envisaged by Yerevan Municipality once MSW collection and landfilling including their funding works satisfactory. a) Option 1: Base Level Configuration This option includes: • Improved MSW collection, including • Upgrading of existing pre-collection points; • Closure of garbage chutes and introduction of pre-collection points; • Stepwise introduction of standardized bins for family housing areas. • Upgrade of Nubarashen Landfill to a sanitary landfill in accor- dance with international standards. • Introduction of small pilot projects for green waste composting and recycling b) Option 2: Base Level + Incineration of MSW Option 2 includes: • Collection in accordance with the Base Level Configuration; • Incineration of the waste and generation of electricity; • Upgrade of Nubarashen landfill to a landfill for slag; • Pilot projects in accordance with the Base Level Configuration. 6543P06/ Final Report 7-1 c) Option 3: Base level + sorting/composting of mixed waste Option 3 includes: • Collection in accordance with the Base Level Configuration; • Treatment plant for separation of recyclable materials and produc- ing compost; • Upgrade of Nubarashen Landfill. d) Option 4: Base level + sorting of mixed waste Option 4 includes: • Collection in accordance with the Base Level Configuration; • Sorting plant for separation of recyclable materials; • Upgrade of Nubarashen Landfill. e) Option 5: Base level + source separation • Collection in accordance with the Base Level Configuration; • Separate collection of recyclable materials (paper, cardboard, glass, metals, plastic) via recycling containers; • Construction of a sorting plant; • Source separation of biowaste from family housing areas; • Construction of a composting plant for biowaste. Figure 3 Overview of 5 Options For the 5 configuration options the Consultant carried out a comparison for technical, environmental and financial criteria. The following Table 11 shows the cost situation of the 5 options. 6543P06/ Final Report 7-2 Table 11 Comparison of configuration options Option 1 Option 2 Option 3 Option 4 Option 5 Capacities of • MSW Collection: • MSW Collection: • MSW Collection: • MSW Collection: • MSW Collection: plants 340,000 t/a 340,000 t/a 340,000 t/a 340,000 t/a 231,000 t/a • Pilot composting: • Pilot composting: • Sort./Comp plant: • Sorting. plant: • Separate collection: 2,000 t/a 2,000 t/a 338,000 t/a 338,000 t/a 109,000 t/a • Landfill: • MSW incineration: • Landfill: • Landfill: • Sorting plant: 338,000 t/a 338,000 t/a 160,000 t/a 280,000 t/a 79,000 t/a • Landfill: • Composting plant 98,000 t/a 30,000 t/a • Landfill: 256,000 t/a Track record of • Long track record. • Long track record. • Long track record • Good track record • Long track record technologies • Problems with • Problems with quality of recyclable quality of recyclable materials and com- materials and com- post post Technical com- • Simple • Highly complex • Medium complex • Little complex • Medium complex plexity technology technology technology. technology Worker skills to • Skills are available • Skills not available • Skills are available • Skills are available • Skills are available operate the plants in Yerevan in Yerevan in Yerevan in Yerevan in Yerevan Participation of • Simple system for • Simple system for • Simple system for • Simple system for • Comparably compli- population and the population. the population. the population. the population. cated system for convenience population, since waste must be sepa- rated at home. Achieveable • Informal Recy- • Informal recycling: • Informal recycling: • Informal recycling: • Informal recycling: quantities in 2018 6543P06/ Final Report 7-3 Option 1 Option 2 Option 3 Option 4 Option 5 cling: 35,000 t/a 35,000 t/a 35,000 t/a 35,000 t/a 35,000 t/a • Electricity: 153 • Recycling from • Recycling from • Recycling from GWh/a plant: 60,000 t/a plant: 60,000 t/a plant: 65,000 t/a • Slag: 82,000 t/a • compost of inferior • High quality com- quality: 60,000 t/a post: 12,000 t/a Markets for • Informal market • Informal market • Informal market • Informal market • Informal market products • Armenian electric- • Restricted market for • Restricted market for • local, regional and ity grid. dirty recyclables dirty recyclables international market. • Difficult market for • • High quality com- compost post Waste quantity • 330,000 t/a • 97,000 t/a, if slag • 160,000 t/a, if sorted • 280,000 t/a, if sorted • 256,000 t/a landfilled cannot be recycled materials and com- materials find mar- • Landfill diversion • Landfill diversion post find market ket rate: 10% • Landfill diversion rate: 31% rate: 74% • Landfill diversion • Landfill diversion • Lifetime of zone D • Lifetime of zone D rate: 57% rate: 26% after 2018: 2 to 3 • Lifetime of zone D after 2018: 3 to 4 years remaining. after 2018: 8 to 10 • Lifetime of zone D • Lifetime of zone D years. Development of Development of years. Development after 2018: 4 to 6 after 2018: 2.5 to Zones E1 and E2. Zones E1 and E2 of Zone E1. years. Development of 3.5years. Develop- Zone E1 ment of Zones E1 and E2 Influence on CDM No influence No CDM possible, No CDM possible, No influence Measures reduce gas in Nubarashen waste is incinerated organics are composted potential by 11 %. Jobs created 450 500 630 580 740 Investment costs8 9.6 66.8 24.4 13.9 16.3 (billion AMD) Unit costs (including revenues for recycling or energy recovery) 9 8 Costs include waste collection costs at Yerevan level, cost bases 2009 6543P06/ Final Report 7-4 Option 1 Option 2 Option 3 Option 4 Option 5 Unit costs 20,000 82,000 37,000 24,000 28,000 (AMD/t) Unit costs 390 1,580 710 460 540 AMD/pers/ month Recommendation There is no alternative Highly complex; Complex; Acceptable costs High quality of prod- to the introduction of Skilled staff not Low quality products Low quality products ucts; the Base Level available; with risk not to find with risk not to find Sustainable option Configuration. Very expensive; markets in times of low markets in times of low Acceptable costs Not affordable. demand; demand a such as now; Recommended Not affordable. Low landfill diversion Recommended for immediately Not recommended 2018 Not recommended Not recommended 9 Unit costs include: costs for collection, sorting, composting, treatment and disposal, revenues for recycling, costs for invoice collection and public awareness, invoice collection rate 90% and VAT, cost bases 2009 6543P06/ Final Report 7-5 The comparison of the different criteria came to the conclusion that for the immediate phase of improvement of the MSWM system in Yerevan, the Consultant sees no serious alternative to the Base Level Configuration. Neither is a lower standard acceptable nor are the additional costs of more “advanced” options affordable at the moment. As a future extension of Yerevan MSWM towards integrated MSWM Option 5 proves to be the most sustainable. 7.2 The Recommended Configuration Plan In principle the recommended configuration plan consists of 3 phases: Phase 1: immediate measures (2009/2010) • Increase collection frequency at pre-collection points which are frequently overloaded; • Replace broken containers at pre-collection points; • Installation of weighbridge at Nubarashen Landfill; • Improve operation of landfills - stop fires, implement thin layer method and bottom to top emplacement; Phase 2: short term measures (2010 – 2018) – Option 1. • This involves the complete implementation of Option 1: Base Level Configuration including mainly the 4 elements: o Improvement of the collection system (closure of chutes, improved collection points, stepwise introduction of bins in family housing areas); o Improvement of the landfill to international standards and operation of one single landfill close to Nubarashen; o Improvement of the invoice collection system to reach 90% and o Improvement of the legal system. • Private-public-partnership contracts with an assumed contract term of 8 years will help to implement part of the improvements. 6543P06/ Final Report 7-6 Option 1: Base Level Configuration Generated MSW quantity: 373,000 t/a Commercial generators MAB w/o Chutes MAB with Chutes Family houses Own pre-collection Street pre-collection Horning system points at larger points and bins businesses MSW MSW MSW Informal Green waste recycling + from parks Pilot project 35,000 t/a Pilot green composting plant 2,000 t/a Recyclables market 35,000 t/a Compost Rejects market 800 t/a Landfill Nubarashen 338,000 t/a Figure 4 Base Level Configuration (situation 2018) Phase 3: medium term measures (2014 – 2026) – Configuration Option 5. This option includes the extension of source separation schemes all over Yerevan territory. Sorting and composting plants will need to be con- structed. In order to have the sorting and composting plants in place at the time of expiry of the first PPP contracts, i.e. by 2018, it is required to already start necessary activities in 2014, such as identification of sites for the plants, updating the configuration plan, preparation of tender documents, tendering, detailed design and construction of the treatment facilities. 6543P06/ Final Report 7-7 Option 5: Base level + source separation Generated MSW quantity: 373,000 t/a Commercial generators MAB w/o Chutes MAB with Chutes Family houses Own pre-collection Street pre-collection Bin System points at larger points businesses Biowaste MSW MSW Recyclables MSW Recycl. Biow. Informal Green and biowaste Sorting plant recycling composting plant 79,000 t/a 35,000 t/a 30,000 t/a Recyclables Compost Rejects market market Rejects 20% 114,000 t/a 12,000 t/a 20% Landfill Nubarashen 256,000 t/a Figure 5 Configuration of Option 5 (situation 2018) The implementation of the recommended 3 phases is shown in the following implementation time schedules. 6543P06/ Final Report 7-8 Figure 6 Short term implementation plan 6543P06/ Final Report 7-9 Figure 7 : Long term implementation plan 6543P06/ Final Report 7-10 8. Tariff Reform 8.1 Current Financing of the SWM System 8.1.1 Current Waste Tariffs Current Waste Tariffs In 1995 the waste fee for households was uniformly set at 100 AMD per person and month10. At that time, according to returns of the Consultant’s questionnaire to the district community administrations and existing reports and interviews, the amount was sufficient to provide the prescribed level of services. The tariff calculation was based on an assumed waste generation quantity (normative) of 1.4 m³ per person annually. Tariffs have been adjusted in different ways in each of the districts and thus current tariff levels for the households vary from AMD 100 per cap- ita/month in Ajapnyak, Erebuni, Kentron, Norq-Marash and Nubarashen up to AMD 200 per capita/month in Avan and Nor-Norq. The average waste fee in 2008 was near AMD 140. In addition to the relatively low waste fees, the fee collection rates are low in many of the district communities. The current fee collection rates for the waste fees vary strongly between 35% and 82% with an average fee collec- tion rate of 56%. Since waste fees are collected in cash and not through banks, there is some doubt about data on collection efficiency and uncer- tainties about the reasons for the low collection rates. One reason is certainly that household waste generators should have direct contracts with the collection companies providing the services (i.e. the companies that are appointed by the district communities for waste collec- tion), but mostly do not conclude one and without contract there is no legal obligation for waste generators to pay the waste fee. Condominiums and economic units are free to contract any company/entity to collect their garbage. 8.1.2 Budgetary Support of MSWM System The existence of new vehicles in Kentron and Arabkir, which is the main capital equipment of waste collection, indicates that some investment in a few districts has taken place although it was not possible to obtain exact information about capital investments from the Municipality, the district communities or the companies involved. The Communal Department of Arabkir Community, for example, informed that they bought trucks under a bank loan, which was paid back over time from the revenues that the company received from the community budget 10 Order of the Minister of Economy N25-36 dated 14 June 1995. 6543P06/ Final Report 8-1 for sanitary cleaning services. In Eribuni vehicles were bought with the proceeds of a bank loan with a term of 5 years. Kentron indicated that new trucks were purchased directly by the commu- nity budget and invested in the company, which is a 100% community- owned company. Lyon municipality donated 7 used Renault and Scania trucks to Yerevan Municipality, which were given to Malatsia-Sebastia. Containers at pre-collection points belong to the communities, thus invest- ments to replace containers are directly funded from the district communi- ties. 8.2 Level of MSW Tariff and Street Cleaning Tariff The current average tariff level for households is approximately AMD 140 per person per month. In order to estimate the level of a future MSW tariff which supports a defined quality of service, a cost estimate and cash flow model and analysis was carried out. The estimation of the costs of the system must be based on an appropriate definition of the system boundaries, i.e. what is included in the costs of the system and what is outside the system and therefore not considered. The system includes: • The collection of MSW from all households and commercial waste generators in Yerevan and subsequent transportation of the waste to the landfill at Nubarashen. • Costs of the landfill (estimated separately and the environmental fee for disposal of MSW is not considered). • Costs for sanitary cleaning and snow removal. • Expenditures of the Municipality for training, public awareness and invoice collection. • Costs of possible (and in some cases recommended) pilot projects for composting and separate waste collection. • VAT where required. The system excludes: • The closing, maintaining or alternation of waste chutes in MAB • Expenditures of the Municipality for enforcement, supervision and contract monitoring • Budgetary expenditures of the Municipality, Ministry of Nature Protec- tion and Ministry of Health for enforcement and environmental or health monitoring • Costs of tendering the services • Costs for closing and rehabilitating old landfills and dumpsites 6543P06/ Final Report 8-2 8.2.1 Proposed Structure of Cost Tariffs and Payment Procedure The possible structure of the different tariffs is shown in the figure below. Legal & institutional framework / supervision mechanism Street Waste Landfill cleaning collection Operation Investment Cost tarriff for Cost tarriff for landfilling collection onky Approx. 2-2.6 bln Approx. 11,000- Approx. 1,700- AMD/year 16,600 AMD/t 2,500 AMD/t Municipal Waste management fees budget (+ invoice collection, pilot projects, public awareness) households 320 – 480 AMD/pers./month (incl VAT) enterprises: full service: 15,500 – 22,400 AMD/t (w/o VAT) disposal only: 2,400 – 3,600 AMD/t (w/o VAT) Figure 8: Structure of tariffs for MSW management and street cleaning Note: the costs are the results of a prelimary analysis, which was superseded by later more detailed calculations. The procedure of payment and invoice collection is as shown in Figure 9. • The Municipality collects the waste fees from the waste generators, which covers all costs as well as compensates for invoice collection rates. • The collection company (or companies) are paid by the municipality for their services. • The landfill operator is paid by the Municipality for waste delivered to the landfill. Figure 9: Payment flows 6543P06/ Final Report 8-3 8.2.2 Cost Tariff for Waste Collection Only The model is based on the cash flow statement for a potential waste collec- tion contractor who will be responsible for the improvements (including investments) with an expectation of a certain financial return. The model is set up separately for the waste collection and disposal (landfill) for the next 8 years, starting 2010. The waste collection model bases on the following underlying assumptions: • Sanitary cleaning will be a separate service directly funded by the (community/city) budget, • Investments include trucks, facilities and containers/platforms (amount- ing to about AMD 7bn and another AMD 1.9 bln after 5 years for re- placing containers), whereas chute closing/rehabilitation investments are excluded, • Waste quantities are projected based on estimated quantities for 2007 of about 320,000 tons per year, which are expected to grow both due to the increase in population numbers and per capita waste generation levels. • It is assumed that fee collection rate will remain almost unchanged in the first year (around 50%), thereafter will increase in the second year to 90% due to introduction of improved fee collection mechanisms in addi- tion to public awareness campaigns and improved enforcement of tariff collection. As orientation for the cost-tariff level analysis for collection services, the Euro-container system has been used to develop the costs estimates. In a probable international tendering process, the option of the three systems (with reservations regarding the “Russian-Ukrainian” system) would be left up to the bidder. The costs of the three systems are very close and the differences are well within the accuracy of the estimate (+ / - 20%). There- fore, the selection of one of the three options has no effect on the tariff level. Under the Base scenario, required tariff increases are calculated separately for each of the (currently existing) district communities, as well as for two separate zones in Yerevan (East and West) and for Yerevan as a whole. Summarizing the major results for the assumptions enumerated above: • The average cost of collection of the community districts is higher than the cost of either 2 districts (coving the whole city) or of servicing the entire city by one collection contractor • The average required cost-tariff for collection per ton is around AMD 14,000 (between AMD 11,000-16,600 per ton) taking into consideration that 50% in the first year and 90% in the following years of tariffs will be collected • The average required cost-tariff per person with realistic collection rates is between AMD 160-240. Further costs need to be added to this to de- termine the effective tariff. • The impact ratio for the improved collection system compared with the current tariff level is around 1.1 to 1.6, i.e. tariffs will need to be in- 6543P06/ Final Report 8-4 creased by this factor to meet the basic cost of collection without street cleaning, landfill costs, Municipal administration and invoice collection from waste generators, pilot projects, clean-up and VAT . 8.2.3 Landfill Tariff Landfill tipping fees were projected using the same methodology and basic assumptions. Total investments estimated for the landfill are AMD 1.6 billion, in addition to the operating costs. Based on similar assumptions of return expected by a landfill operator (IRR 20% on investment) and total waste quantities to be delivered to Nubarashen, the tipping fee is estimated to be in the range of AMD 1,700 – 2,500 per ton or about 30 to 45 AMD per person per month. It can be assumed that 100% of the tipping fee will collected from the Municipality. However, since the tipping fee becomes part of the tariff, it also becomes subject to invoice collection rates (i.e. waste generators paying to the Municipality). In the case investments are not financed by the landfill operator, but spon- sored by the municipal/national budget, the tipping fee would be equal to about AMD 1,000 – 1,200 per ton or around AMD 20 to 30 per person per month. 8.2.4 Estimate of All-in Tariff The Consultant also carried out an all-in tariff estimate, including the following cost items: • MSW collection costs See Section 8.2.2 • MSW disposal costs See Section 8.2.3 • Pilot projects for composting and Investments about 400 million AMD recycling Operation 43 million AMD • Public awareness, training 200 AMD/t • Invoice collection 8% of collections • VAT 20% (for household tariffs) The resulting costs for the scenario 50% collection rate in the first year and 90% in the remaining years are as shown in Figure 8. The costs for enter- prises are shown without VAT because enterprises usually can compensate VAT. These figures were later superseded by new calculations carried out in connection with developing the PPP business strategy (see Section Error! Reference source not found.). In the more recent calculation all costs of collection and landfill were included. 6543P06/ Final Report 8-5 The following figure shows the large impact of the invoice collection rate on the tariff. Household tariff versus invoice collection rate 550 500 Tariff (AMD per person per month) 450 400 350 300 60% 80% 100% Invoice collection rate Figure 10: Required tariff as function of the invoice collection rate 8.2.5 Street Cleaning Tariff Street cleaning usually is a municipal task. Given that the fees for MSWM are already at the affordability limit, the Consultant recommends to keep the present tradition to finance the street cleaning from municipal budget. The annual costs range between AMD 1.7 and 2.6 billion per year (incl. VAT). 8.3 Willingness to Pay The Consultant carried out a socio-economic survey with a special focus on willingness to pay. The results are as follows: Table 12: Willingness to pay more 6543P06/ Final Report 8-6 The results show that the households in single-family or small units would be willing to pay more for the suggested improvements. For multi- apartment-buildings the survey shows 2 broad trends: 1. Considerable efforts will have to be undertaken to carry out public awareness campaigns to inform the households of the advantages of any changes made to the system. It appears that the households did not comprehend the briefly sketched improvements presented to them by the interviewers as improvements to their benefit. This is especially so for the households in buildings with garbage chutes. These households do not see closing of the chutes and replacement with containers outside the building as an improvement. 2. The strict disapproval of the suggestion to close the garbage chutes categorically (as presented by the interviewers) by the households means that a more differentiated approach must be considered. This re- consideration has already taken place as a result of the Roundtables and the Working Group Meetings, and the recommendation has now been revised to be more flexible. 8.4 Recommendations on the Tariff Reform 8.4.1 Improved Fee Collection According to the Consultant’s preliminary assessment of the legal situation (Task 6), the single most critical factor influencing the collection rate may be the lack of a legal basis for the collection of fees. This is being investi- gated in the framework of Task 6 and will be addressed in the report. In accordance with the polluter pays principle waste fees paid by the MSW generators should cover the operation and maintenance costs as well as capital costs (investment and financing costs) of collection, transport, treatment and disposal of waste, as well as costs for indirect costs such as public awareness and invoice collection. More precisely, the received revenues should cover the costs of providing the services. If the Govern- ment requires lower tariffs, the government should subsidize the difference. Should a private waste operator be responsible for collecting, the expected collection rate is extremely important for the decision to participate in the tender and for the price. Invoice collection risk is an important risk compo- nent and it is of advantage to minimize the risks of the collection compa- nies. Waste fee collection from households by the municipal authorities appears ultimately to be the preferable solution. The legal changes needed to enforce the municipal collection of the waste fees are minimal (cf. Task 6 Report). 6543P06/ Final Report 8-7 Based on the analysis of the current practice for waste management fees collection from the households, payments in cash are seen as a major problem. In this regard, collection via a bank transfer has some clear advantages and is recommended. 8.4.2 Tariff Level for MSWM and Street Cleaning The Consultant recommends that the MSWM tariffs be oriented on the overall costs of providing the services (including the costs of collection of waste and disposal at the landfill, pilot projects, public awareness and invoice collection). 6543P06/ Final Report 8-8 9. Legal Issues and Recommendations 9.1 The Anticipated PPP Scenario This task 6 requires the design of a viable PPP option for the MSW sector in Yerevan. It requires the full effectiveness of the Law of Self Governing in the City of Yerevan. Otherwise, Yerevan will not have the status of one municipality. As an outcome of the review of applicable laws and regula- tions, several rounds of public consultation and interviews carried out with high level public stakeholders11, the following preliminary PPP scenario has been identified as most viable and has been used as the basis for testing the legal issues: 1. The entire City of Yerevan, being “one” municipality according to the Law on Yerevan, will be split into two approximately equally attrac- tive waste collection service areas and the landfill at Nubareshen; 2. For each one of these service waste collection areas, “one” permit will be granted by the Mayor of Yerevan together with one permit for (parts of) the landfill; 3. The “waste collection service” consists of the collection, transporta- tion (storage) and disposal of waste for the two Yerevan service areas, including (but still needing further review) the sanitary cleaning ser- vices12, these being the street cleaning and snow removal; 4. The landfill service consists of the construction and operation of (parts of) the landfill at Nubareshen; 5. The duration of the waste collection service contracts will be 8 years each, allowing for full amortization of the respective investments and for an attractive profit margin; 6. Each one of the waste collection service providers (Operator) enjoys a period of full (first five years) and a period of partial exclusivity (sec- ond five years), where each Operator can contract with commercial customers in the other service area; 7. The billing and collection is done by the municipality and the munici- pality has a political choice to either recover all costs or to subsidize certain customer groups; 8. The Operator receives a service fee from the municipality of Yerevan. The Service fee is for the provision of waste collection (and sanitary cleaning) services and will be determined by the financial bid (incen- tive to keep the burden low, since the lowest service fee will score highest) and by the performance of the Operator. The achievement of the level of service will impact the periodic service fee payment to the Operator. 11 The interviews and meetings conducted for this task 6 are shown in Annex A. 12 Clear instructions were received to include sanitary services (street cleaning / washing and snow removal) from Ministry of Economy and Mayor of Yerevan. 6543P06/ Final Report 9-1 This is the first phase of a more comprehensive overhaul of the MSW sector in Yerevan and in Armenia. In the medium and long term, sector specifi- cally, a further approximation to the applicable EU acquis commaunitaire should be initiated, with the introduction of modern principles and require- ments (polluter pays, after care, etc) and a dedicated regulatory regime should be established. If and to the extent Armenia embarks on a wider PPP policy, a PPP Agency and a dedicated PPP law could accommodate any further market liberaliza- tion in the waste sector. Alternatively, the contractual and sector specific regulation efforts could be furthered and with the respective services contracts regulating the relationship between the parties involved. 9.2 Main Shortcomings Currently, the applicable legal and regulatory regime does not allow for the PPP scenario described above. There are severe shortcomings, with the most important ones concerning: (a) Payment of bills: If the municipality decides to outsource waste collection services, then the waste collection services provider has to conclude individual contracts with each and every customer. As a consequence, the service provider can invoice for its services only based on these contracts and enforce payment through the (private ju- risdiction) courts. (b) Permitting: currently, there is no coherent permitting or licensing system in place, at least not to the extent that all the value chain activi- ties of MSW are concerned. Whilst it might not be necessary to sub- ject all activities to “licensing”, some type of permitting or registration is required. This is necessary to ensure coverage of service, quality of service and appropriate returns for the investors. (c) Waste Definition: at this moment, there is no coherent definition of MSW and it is not clearly set apart from dangerous (hazardous) waste categories. For reasons of tariff determination and the application of different regimes, MSW should be split into household refuse and commercial / industrial waste. At this given moment, a potential investor would face an environment, where the remuneration would be the collected fees, which have to be based on civil law contracts with each and every customer. There is also no guaranteed (exclusive) service area and any income derived from big commercial customer is thus not secure. And, in the absence of a clear definition and (in- or) exclusion of certain waste categories in MSW, a potential investor from abroad cannot ring-fence the service provision as such. If the Yerevan MSW sector wants to appear on the radar screen of potential investors, the above scenario will need to be changed dramatically. 6543P06/ Final Report 9-2 9.3 Recommendations In order to change this investor and PPP unfriendly environment, two changes in law are required. These concern changes in the Law on Local Duties and Fees and in the Law on Waste. The Law on Local Duties and Fees needs to be amended to introduce a payment obligation for waste collection services. Individual contracts are therefore no longer required. The other change in law concerns the Law on Waste, in particular a clearer definition of household refuse and industrial (commercial) waste. This is necessary for the different regimes to address the correct recipients (regard- ing tariffs and waste stream specific obligations). Also, the permitting system in the Law on Waste needs to be reviewed to allow for clear defini- tion of the anticipated waste collection (and sanitary cleaning) services provision. On a policy level, the City of Yerevan will need to provide clarity on the monitoring and supervision competencies, details of which will be regulated (for now) in the service contracts. A clear policy statement demonstrating Yerevan’s commitment to private sector participation and an outline of the cornerstone of the envisaged future PPP environment would be helpful for the private sector having to assess the entire ten year period in their calcula- tions. The tariff determination and collection remains with the City of Yerevan. Any surcharges for the condominium management’s efforts in the participa- tion of the waste collection (on their side) can either be factored into the tariff, a discount for condominiums can apply or the condominiums receive an extra remuneration under a different title. 6543P06/ Final Report 9-3 10. PPP Business strategy 10.1 Base Case We can summarize that PSP tendering for collection should definitely go beyond service contracts and should be done on the basis of a comprehen- sive waste collection concession for each of the two collection areas in Yerevan. It is further recommended that the private sector be involved both as owner of the vehicles and equipment and operator of the collection system. Therefore, two full-fledged waste collection contracts shall be tendered for Yerevan. It shall not be allowed in the tendering process that a company can win both collection contracts at the same time, as it is the expressed objective to have two separate private companies that perform the collection activities in order to allow a comparison of their performance and a benchmarking process. One approach to achieve this can be a phased tendering process. However, this would lead to a very lengthy tendering process, as one would have to wait until the complete tendering process for the first package would be completed before the second package is tendered. It is therefore better to tender two separate collection contracts at the same time with the clear provision in the Instruction to Bidders that a bidder cannot win both con- tracts at the same time. It is then left to the bidders, whether they bid only for one or for both collection contracts. The evaluation procedures will have to be worked out such that the overall minimum cost is the guiding princi- ple, should by coincidence the same bidder emerge as the first ranked bidder in both cases. To make the bidding a successful undertaking, it has to be a solicited bid in any case and has to apply international standards in terms of RFP docu- ments, sequence of steps in the bidding process, transparency of the process, etc. As concrete bidding processes have been completed successfully in Armenia in the past with the assistance of international transaction advisors (in the water / wastewater sector), such a process can certainly be repeated successfully also in the waste management sector. The term for the waste collection contracts has to be commensurate with the lifetime and depreciation periods of the equipment (vehicles, etc.) that is used by the private operator. This generally means a term for the contract of some seven to eight years. Shorter contract periods would lead to higher costs, as assets would have to be written off faster than technically required. Longer periods would reduce the level of competition, which is anyway only competition for the market occurring each time when the contracts are tendered, rather then competition in the market. The Consultant is recom- mending a contract term of 8 years. For all cases considered in the following, the calculations are carried out for Yerevan City as a whole and for the quantity scenario 3. The collection business case is viable with an internal rate of return (IRR) of slightly under 6543P06/ Final Report 10-1 20%. At this rate of return, the cost per ton to be paid to the operator amounts to AMD 9800. As the base case, we first look at the case of bill collection being done by the Yerevan Municipality (YM), i.e. the costs of collecting fees and the deficits of the collection rate need to be covered by the YM. Furthermore, we assume no cross-subsidies and we assume that there is no budget deficit to the YM in any year. In this case, the results are as follows: • The household fee rate is AMD 495 / person / month • The commercial fee rate (level) is AMD 9800 / ton13 • Due to the requirement that there is no budget deficit for the municipality in any year, the total budget surplus is AMD 16 bn over the 8 year period • In addition, around AMD 4 bn in VAT is collected The results are shown in Table 13. Although the collection contract is moderately priced since the collection company has no revenue risk, the requirement that there be no deficit to the Municipality and no cross-subsidies from the commercial waste generators raises the tariff level above the level considered to be generally affordable and acceptable. This result is considered non-viable, so the next variant involves reducing the YM surplus. 13 This is a reference to the level of the fees not to the fee or commercial tariff structure, which we recommend to be based on container volumes. 6543P06/ Final Report 10-2 Table 13 Results: Base case YM collects, no deficit, no cross-subsidy Operator Viability indicators Number of years 8 years Discount rate Not relevant IRR of Collection Operator 19% free equity cash flow - real 17% Investment amount First year AMD 7.1 bn Replacement in year 3 AMD 1.3 bn Municipal budget Impacts (th AMD) YM 8-year budget effect 16,062,460 lowest values in 8 years 0 Sum of VAT and budget 21,096,539 Government Budget Impacts (th AMD) VAT collected (8-year) 5,034,079 Subsidies paid 0 VAT paid by end-users 0 Fee collection by whom? YM collects fees User Fees Household waste fee AMD 495 VAT AMD 0 Total AMD 495 Commercial fee level Same as paid to contrac- tor (no cross-subsidy) commercial waste fee level AMD 9800 /ton14 VAT AMD 0 Total AMD 9800 /ton Collection of fees Households – first year 50% Households – 2nd to 5th years 80% Households – 6th to 8th year 90% Commercial - throughout 90% 14 The Consultant is not proposing that the commercial tariff itself be a weight-based tariff, which would require weighing the waste from each waste generator at pick-up. Instead our recommendation for the tariff structure for commercial customers is presented in Section 12.4. Three it is explained that a container-based (volume-based) tariff is recommended. 6543P06/ Final Report 10-3 10.1.1 Neutral municipal budget without cross-subsidies In the next variant calculation, the condition that there be no municipal budget deficit in any year is abandoned in favor of an assumption that the 8- year budget effect is neutral, i.e. that the total of all 8 year deficits and surpluses be “0”. This implies that the end-users carry the full costs of the services provided without municipal support but also without municipal budgetary benefits. The result of this variant are shown below in Table 14. Over the term of the contract the overall budget effect is neutralized. However, the municipality must manage a deficit in the first year of AMD 1.2 bn. The households pay a greatly reduced waste fee, i.e. AMD 313 as opposed to the amount of AMD 495 in the base case. This amount is considered acceptable and affordable. Overall the RA government profits by AMD 5 bn in additional VAT returns. Since there is no cross-subsidies commercial waste generators pay the same fee as in the base case, AMD 9800 / ton. Table 14 Neutral municipal budget effect Municipal budget Impacts (th AMD) YM 8-year budget effect 0 lowest value in 8 years -1,224,039 Sum of VAT and budget 5,034,079 Government Budget Impacts (th AMD) VAT collected (8-year) 5,034,079 Subsidies paid 0 VAT paid by end-users 0 Fee collection by whom? YM collects fees User Fees (AMD per person per month) Household waste fee AMD 313 VAT AMD 0 Total AMD 313 commercial fee level pass-through pricing Commercial surcharge 0% commercial waste fee level AMD 9800/ton15 VAT AMD 0 Total AMD 9800/ton 15 The commercial tariff would be volume-based (see Section 12.4 for details). This is only an indication of the level of charges. 6543P06/ Final Report 10-4 10.1.2 Neutral impact on YM budget with cross-subsidies The Yerevan Municipality is considering using cross-subsidies between commercial waste generators and households to reduce the burden on the households. In a further variant, we study the effect of a 50% surcharge to the contract price of the waste collection operator for the commercial waste fee. This is based on the assumptions of the previously investigated variant with neutral budget impact. Since the criterion of a neutral budget impact is still imposed, the shift in burden from households to the commercial waste generators has little impact on the municipality’s budget. The 50% surcharge increases the commercial fee from AMD 9800 / ton to AMD 14700 / ton, which is arguably still within a reasonable range16. The effect on the household tariff is a reduction from AMD 313 to AMD 293, i.e. AMD 20/person/month. This would appear to be a minor benefit with regard to affordability and acceptability of the tariff. Table 15 Neutral municipal budget effect, 50% surcharge to commercial Municipal budget Impacts (th AMD) YM 8-year budget effect 0 lowest value in 8 years -1,110,787 Sum of VAT and budget 5,049,759 Government Budget Impacts (th AMD) VAT collected (8-year) 5,049,759 Subsidies paid VAT paid by end-users Fee collection by whom? YM collects fees User Fees (AMD per person per month) Household waste fee AMD 283 VAT AMD 0 Total AMD 283 commercial fee level cross-subsidy price Commercial surcharge 50% commercial waste fee level AMD 14700 /ton VAT AMD 0 Total AMD 14700 /ton 16 This is only a reference to the level of charges which will need to be translated into a volume based tariff structure based on standard containers (See Section 12.4). 6543P06/ Final Report 10-5 10.1.3 Fee collection An alternative option for waste fee collection which has been discussed is the option to delegate the collection to the operator. In a further calculation, the financial impact of this option was investigated. It was assumed that the operator collects the fees through its own billing system and must therefore accept the risk of non-payment by a certain share of the waste generators. Furthermore, it is assumed that the acceptance of the private collection is at first below the acceptance of municipality services implementing the fee collection. The assumed collection rates are shown in Table 16. It is as- sumed that the private company reaches a high collection rate in the later years but that there is a decrease in collection in the first year and a more gradual improvement than in the case of municipality collection. Table 16 Fee collection rates for operator collection of fees Collection rates assumed Households year 1 30% years 2-5 70% years 6-8 90% Commercial collections year 1 50% years 2-5 70% years 6-8 90% The financial results for the case of the operator collecting the waste fees are shown in Table 17. The results are based on the same assumptions as the previous case, but instead of the municipality collecting fees, the operator collects them. For the municipality, this means assuming the costs of monitoring the operator which is assumed to be in the order of AMD 100 million per year. Since the operator collects directly from waste generators, the operator must charge VAT to the customers. This brings in AMD 6.5 bn to the RA Government. The cost covering waste fee for households is AMD 238 per person per month, but VAT must be added which increases the bill to the household by AMD 48 leading to an increased waste fee of AMD 286 per person per month as opposed to AMD 283 in the previous case. The commercial waste fee level is increased to AMD 17640 per ton due to the VAT. 6543P06/ Final Report 10-6 Table 17 Financial results – Operator collects waste fees Municipal budget Impacts (th AMD) YM 8-year budget effect -800,000 lowest value in 8 years -100,000 Sum of VAT and budget -800,000 Government Budget Impacts (th AMD) VAT collected (8-year) Subsidies paid 0 VAT paid by end-users Fee collection by whom? 6,525,810 User Fees (AMD per person per month) Household waste fee AMD 238 VAT AMD 48 Total AMD 286 commercial fee level cross-subsidy price Commercial surcharge 50% commercial waste fee level AMD 14700 /t VAT AMD 2940 /t Total AMD 17640 /t 10.1.4 Further results and conclusions Further results are shown in Annex 3. From the above mentioned examples, it is obvious that there are a number of parameters, which determine the final outcome, beside the basic assumptions. Whether the municipality can accept a budget deficit, whether the RA Government would consider subsidizing the Yerevan Municipality to avoid deficits (which could par- tially or completely be paid from additional VAT returns), and whether cross-subsidies will be considered determine the household and commercial waste fee and the effect on the municipality and government budgets. The model used to make these calculations has been turned over to the MOE. It is strongly recommended that the different options be evaluated together with the YM in order to develop the policy decisions necessary to proceed with regard to the tariffs. The financial model is capable of support- ing this decision making process. Finally, however, the RA Government and the Yerevan Municipality will have to make the necessary decisions. 6543P06/ Final Report 10-7 Table 18 Selected Results 10.2 Next Steps Given the ambitious goal of the public administration to launch the tender in August or September 2009 and to conclude the (first) contracts before the end of this year, the road map to achieve this goal is in question. Any time schedule made would be based on a number of variables. These concern the duration of the changes in law required. This, according to information received from the Government, could take anything between two and five months. Then, there are multiple decision making points along this process which would have to be issued in a timely manner. Any serious delay in any one of these activities will have a knock-on effect on the timing of the others. Therefore under the current circumstances it is not considered useful to present a time schedule for implementation at this time. Nevertheless, a list of activities which the Government needs to complete in order to proceed with the PPP can be prepared and is presented below. • Carry out the immediate measures recommended for collection, street cleaning and landfill • Legislative amendments i.e. payment obligation, exclusivity of solid waste management services in the areas, definition of municipal solid waste 6543P06/ Final Report 10-8 • Local Government Ordinance • Install a temporary weighbridge and carry out a weighing campaign to cover all MSW brought to the various landfills / dumps • Landfill site investigations, Hydro-geologic studies of the Nubareshen landfill site. • EIA of the landfill • Tender the Transaction Advisor i.e. detailed structuring of the PPP, the drafting of the tender documents and the service agreements, tender and negotiation assistance () • Solve the problem of waste chute repair and upgrading or closure for all MABs with waste chutes • Municipality preparations for PPP: • Develop fee collection system (internal organizational setu-up and agreements with Haypost) • Develop monitoring capabilities for contract management RA Government to deliberate and decide on possible subsidy mechanisms for Yerevan Municipality 6543P06/ Final Report 10-9 PART II Implementation Issues 6543P06/ Final Report 11. Urban Waste Collection Regulations 11.1 International experience In this section, we provide a short overview of the issues which could be covered by local government ordinance and some examples of the structure of such ordinances as found in different countries. There are a number of concepts about waste management which vary in their usage between countries or regions. Some of the most general, widely- used concepts include: The waste hierarchy refers to the "3 Rs" reduce, reuse and recycle, which classify waste management strategies according to their desirability in terms of waste minimization. The waste hierarchy remains the cornerstone of most waste minimization strategies. The aim of the waste hierarchy is to extract the maximum practical benefits from products and to generate the minimum amount of waste. Extended producer responsibility - Extended Producer Responsibility (EPR) is a strategy designed to promote the integration of all costs associ- ated with products throughout their life cycle (including end-of-life disposal costs) into the market price of the product. Extended producer responsibility is meant to impose accountability over the entire lifecycle of products and packaging introduced to the market. This means that firms which manufac- ture, import and/or sell products are required to be responsible for the products after their useful life as well as during manufacture. Polluter pays principle - the Polluter Pays Principle is a principle where the polluting party pays for the impact caused to the environment. With respect to waste management, this generally refers to the requirement for a waste generator to pay for appropriate disposal of the waste17. Depending on the extent to which these concepts are implemented, the collection, fee collection, fee system and other details of MSWM will differ. Not all details of systems based on the above concepts will be transferable to Yerevan, which is in a very low level of solid waste management. Three levels of solid waste management policy frameworks can be identi- fied: cleaning, environmental and integrated policy frameworks18. Under the “cleaning approach”, priority is placed on the removal of wastes from immediate areas of human activity in order to protect human health, while the final phase of waste management is of lesser importance. Waste man- agement services are delivered as a public sector function and are largely financed from general public sector revenues. This is the approach that currently can be observed in Armenia. 17 Source: US EPA 18 See also the Report on Legal (Task 6) 6543P06/ Final Report 11-1 Although this approach is generally based on protecting citizens’ health and improving their quality of life, the lack of attention to where and how waste is ultimately disposed of in fact results in serious health and environmental risks and this model is the least protective of human health. Thus, countries like Armenia trying to improve MSWM need to re-orient their policy frameworks with the objective of ensuring progressive transition from the “cleaning approach” to the “environmental approach” and the “integrated approach”. This is the stage that Armenia should be entering into today. Under the “environmental approach”, increased focus is placed on protect- ing human health and the environment from the consequences of the way solid waste is managed, particularly at the point of disposal. The main change is the concern for the environmental impact of waste management through the establishment of environmental standards for treatment plants and landfills, environmental impact analysis and authorization, etc. To improve the goals of reduction, reusing, and recycling waste, the active participation of all public and private stakeholders is needed. Integrated waste management has to co-ordinate all actions: from the National Au- thorities to the citizens, from the consumable goods producers to the private companies who can deliver more complex systems of collection, treatment and landfilling. Strong financing and cost recovery structures are needed to match the high costs of investment and operation of the waste services, and the application of the polluter- pays principle is needed to give producers of goods and waste generators an economic incentive to minimize their waste. There are several essential issues ensuring the financial sustainability of SWM which the process must take must take into account. In many coun- tries, there is a lack of legal grounds to permit Municipalities to claim waste collection fees and oblige residents to pay them, which into would enable the public or private waste collection service providers to secure their operational expenses and achieve cost recovery (as is the case in Armenia). The legal restrictions also act as a constraint to further expansion of the participation of private companies in SWM. Gaps also exist in the present laws and regulations concerning measures for source separation and the allocation of waste disposal sites. These legal issues must be addressed to provide a legal basis for integrated sustainable waste management. Just as Armenia has, many countries have started a process of legislative and institutional changes in order to improve their solid waste management policy. This new policy framework has direct implications for municipal waste management, mainly concerning the prioritization of actions (intro- ducing the goals of waste reduction, reuse and recycling of materials, for ex- ample), the financing and management frameworks (improving PPP and municipal taxing capacity and applying the polluter-pays principle), and planning treatment and disposal facilities (site selection, technical and environmental standards, EIA, technologies, prioritization, etc.). For these reasons, it is important that local authorities be in agreement with national policies and legislation in order to optimize solid waste management. As the process of legal and institutional changes to the Integrated Waste Manage- 6543P06/ Final Report 11-2 ment System, co-ordination between local and national authorities covers the crucial scope of medium and long term decisions. National policies, regulations, plans and programs on municipal solid waste issues that will greatly affect the relevant future municipal actions will be decided through this process. Normally in developed waste management systems there are mandatory waste management plans which are developed by local or regional government in line with national policy and legislation. These plans are the basis for the local government decisions and finally on local gov- ernment regulations. Municipalities At the local level, the municipalities most frequently have the responsibility of implementing a solid waste management system. Each municipality is responsible for waste collection in its own area, and the municipalities own and maintain collection equipment. The following is a list of possible municipal responsibilities: • Cleaning the area • Maintaining an adequate level of hygiene • Collecting, treating, and disposing of waste including if applicable hiring the service provider (private or public) • Preventing the accumulation of waste in any public or private area • Providing public waste containers where they are needed and maintain- ing their cleanliness • Preventing the illegal transport of waste • Setting and collecting collection fees from residents Households, shops, industries and restaurants can be charged a special fee for having their waste collected by the municipality. This waste collection fee is often established by the municipality council and depends on the type of the premises served. Each municipality has to be responsible for deter- mining the charges, but this occurs within the national legislative frame- work. Good practice in each municipality is to establish a complaint mechanism, where the public can make complaints related to SWM. Each complaint should get a response and be reviewed for possible improvements to the system. Setting up local regulation Local authorities should set up regulation related to waste management regarding the protection of human health and the urban environment. The responsibility of municipalities to set up regulation is established by the national legal framework. This framework determines if the municipality is able to levy taxes for waste management services, establish public enter- prises, delegate the responsibilities of service delivery to the private sector, determine the duties of waste producers, etc. 6543P06/ Final Report 11-3 The following is a list of possible items to include in local regulation: • Waste definition and classification (with reference to national legislation) • Residents’ responsibilities • City’s duties and responsibilities • Classification and definition of collection • fees for municipal waste • Classification and definition of penalties. • Frequency and schedule of waste collection and city cleaning. • Regulation concerning containers: placement, types and identification • Functions of citizen information services • Collection procedures for special waste (bulky, hazardous, etc.) • General restrictions in waste treatment to prevent environmental con- tamination • Types of waste that cannot be disposed of. The prime objective of proper MSW collection and sanitary cleaning is to secure public health, to keep the public area clean and to environmentally safe remove the MSW generated to appropriate disposal facilities. MSW collection and sanitary cleaning are two of the most visible compo- nents of MSW management. Visible improvements are required in order to build up the image of the city and to provide quality of the services to the residents. Furthermore efficiency improvements are required to improve the services. It is important that the MSW management services provided are affordable and the financing scheme is sustainable. In order to provide an efficient and effective operation of the MSWM system, the system has to cope with a number of design and performance requirements. A review of a number of international examples of waste management ordinances, bylaws, local regulations has resulted in a suggestion for a typical “international local waste regulations”. It should be noted that these legal instruments vary greatly and the following “averaging” of these ordinances gives perhaps the impression of uniformity which is stronger than it in reality is. Table 19 “Typical International Experience” Waste Ordinance Section title Contents definitions/interpretation/policy Definitions are almost universal, even though they often can refer to national legal acts General provisions -Principles Such as avoidance and recycling - industrial waste (special permis- sions) - responsible authority for collection This specifies that the local govern- ment body issuing the regulations is 6543P06/ Final Report 11-4 the authority specified by law responsible for waste management or waste collection - Types of waste which type of waste will be col- lected Quantities of waste (which quantity Refers to individual collections, of waste will be collected limits of weight of bins, for example other restrictions on waste Preparation/collection/transportation of waste Preparation of waste Not acceptable Waste which kind of container is allowed, container size, how to use the container, location of the container, who is responsible for preparation Separation Requirements (hazardous waste, domestic, commercial…) collection days and times special collection programs bulky waste, Transporting of waste Contracting to private, who is collecting scavenging Usually a prohibition Waste fees and charges Levying of charges for utilization of General rules facilities Value added tax application Parties liable for charges Which party (usually the property owner) Factors determining amount of Basis for waste fees, container size, charges paid volume, weight etc. Rates which charges are levied (Usually tables of fees and charges) Charges for delivering refuse To landfill or treatment facility Obligation to pay charges Reference to legal basis for charging waste fees Notification of charges levied When and how notices will be delivered Advance payments If required Due date for payments Reimbursement of charges "Reduction of charges in the event of interruption of facility operation" Validity Of the regulation Final provisions Offences Penalties 6543P06/ Final Report 11-5 This report is accompanied by a collection of waste regulations from different countries, which should be reviewed in detail to see the actual way the ordinances are written and how they differ. 11.2 Regulation by contract In a PPP structure, the responsibilities of the contractor or operator are spelled out in the contract. The contract may repeat existing regulations (at the municipal, regional or national level) or add more stringent requirements or details of the legal requirements. Having requirements in both local regulations and the contract does no harm so long as they are not contradic- tory and excluding the possibility that the local regulations could later be changed resulting in contradictions. Typical regulations found in collection contracts refer to: • Frequency and schedule of waste collection and city cleaning. • Regulation concerning containers: placement, types and identification • Types of waste that cannot be disposed of. • Collection procedures for special waste (bulky, construction, etc.) There are a number of general design requirements, which are applicable to any collection system, and there are specific requirements, which apply to the specific structure of the area, where the waste is collected. The following listing shows the general design requirements, while Table 21 shows the design requirements which depend on the building structure of the collection area. The general design requirements are as follows19: Table 20 Design requirements Design Requirements • System based on containers The system should allow rapid and reliable loading of the waste • Waste should be placed in containers or bags, ready for direct and fast loading into the collection vehicle, i.e. the chosen system should be based on bins, con- tainers or bags. • Manual loading should be exceptional to situations such as removing fly-tipped waste, badly placed waste after special holidays and to some extend sanitary cleaning waste; any other waste should already be placed in bins, containers or bags. • The number of containers placed (and their available volume) should be adjusted to the collection frequency and the collection schedule; As a rule containers should be min 70% full on average, when collected, but never overfull • Specified frequencies of collection shall be observed • On days of exceptionally high waste generation (e.g. New Year), the collection may be enhanced by additional collections 19 The design requirements were already presented in Task 2 Report. 6543P06/ Final Report 11-6 Design Requirements • Collection containers and pre-collection points • Containers, except in detached housing areas where bins are related to the houses, should be placed in pre-collection points • Pre-collection points shall be placed that the containers placed are easily accessi- ble for the collection team, i.e. best along the road or easily accessible places. • Pre-collection points shall be located no further than 100 m from any entrance to buildings they serve. • Pre-collection points should look neat, and clean. Regular washing should be carried out. After collection the points shall be left without littered waste. • Containers shall be placed on hardstandings. In case of wheeled containers, the path to the vehicle should be paved and suitable to roll the container. • Containers shall be equipped with lids, in order to reduce odor emissions and discourage straying dogs and cats. • Containers should be robust, long living and dense and should to not leak leachate. • Containers should regularly be washed by a container washing vehicle. Bins at areas with detached houses may be washed by their users. • Containers at pre-collection points shall regularly be maintained and damaged containers replaced. • Vehicles for collection • In order to use the vehicle as long as possible for collection, and as little as possi- ble for transportation, the body capacity should be as big as possible. • Compaction vehicles should be preferred for MSW collection to open dumper trucks, because these have a much larger capacity. • Dumper trucks should only be used for exceptional cases, e.g. for removal of rehabilitation waste (C&D) or sanitary cleaning waste. • When determining the size, the access road conditions to the garbage chutes, pre- collection points and detached houses need to be taken into account. • The vehicles should be equipped with a leachate holding system, in order to pre- vent spilling of liquids. • Vehicles should be reliable, i.e. they need to be either new or nearly new and maintained regularly • Vehicles should have low emission levels (exhaust, noise) • Other Requirements • The introduced collection system should take into consideration the maximum loading capacity of a worker. This is especially the case when discussing a bag collection system, where heavy bags may damage health, especially to the back • In general, worker safety laws must be observed. • Take into account traffic constrains to avoid time losses in traffic jams (Consider night collection of certain areas, in order to avoid daytime heavy traffic as well as influence on traffic flow) • Public awareness campaigns, tariff structure and especially the quality of services should motivate people to always place waste in the containers. As already mentioned before, the following table shows performance requirements and indicators for monitoring, as these become necessary for the proper and efficient monitoring of a MSW collection contract, based on the different collection methods for Yerevan. These requirements would be written into the contracts and at least partially assigned penalties for non- compliance. . 6543P06/ Final Report 11-7 Table 21 Contractual requirements for different collection types Multi-apartment build- Multi-apartment build- Family housing area Public institutions and ings without garbage ings with garbage chutes large commercial entities chutes MSW generation (indica- 0.82 kg/inh/d 0.82 kg/inh/d 0.95 kg/inh/d tive) 7 l/inh/d20 incl 15% 7 l/inh/d incl 15% reserve 8 l/inh/d incl 15% reserve reserve Pre-collection Pre-collection type Pre-collection points Pre-collection point with standardized bins Small/medium: included in wheeled containers, if pre-collection for area chute is continued, or any Large: Containers, special- type of container, if chute ized collection points on is closed premises Container specification Size: Depending on pre- Size: Depending on pre- European standard bins of Size: Depending on pre- collection system: collection system: the size of 60 to 360 l or collection system: • Existing bins: 750l • Existing bins: 750l similar. • Existing bins: 750l • Euro containers: 1,100l • Euro containers: 1,100l Lid: yes • wheeled containers: • OMB type cont: 1,600, • OMB type cont: 1,600, Materials: plastic or metal 800l to 2,200 l 2,400, 3,200l 2,400, 3,200l • OMB type cont: 1,600, Lid: preferably with lid, if Lid: preferably with lid, if 2,400, 3,200l it is ensured, that lid is it is ensured, that lid is • Lid: preferably with lid, usually closed usually closed if it is sure that lid is Material: preferably metal Material: preferably metal closed • Material: plastic or metal For large commercial: skip or other large volume containers Size and number of Sufficiently large to store Sufficiently large to store Sufficiently large to store Sufficiently large to store containers the volume of the MSW the volume of the MSW the volume of the MSW the volume of the MSW 20 Considering a density of 0.15 kg/l of waste and rounded up 6543P06/ Final Report 11-8 between collections between collections between collections between collections Distance to generators Max 100 m from building Decision of condominium Not applicable, bin is Not applicable, container entrance located close to house is located close to entity Underground Hard-standing Hard-standing - Hard-standing Location Close to road Close to road or access Curbside – door to door Close to access way for road collection truck Collection Vehicles Side or rear loading Side or rear loading Rear loading compaction Rear loading compaction compaction truck (up to 16 compaction truck (up to 16 truck (up to 16 m³) with truck (up to 22 m³) with m³) with loading device m³) with loading device loading device for bins loading device for contain- for containers for containers ers or other vehicle appropriate to the type of container (skip loaders) Collection frequency Every day or every 2 days Decision of condominium Every 3 to 4 days Upon call of company or / legal requirements institution 6543P06/ Final Report 11-9 Item Requirement Indicator for non-performance Collection Collection schedule and frequency Non-emptied containers and non-collected Collection is carried out in accordance with waste agreed schedule - collection frequency • Blocks: Every day or every 2 days (as contracted) • Detached houses: Twice per week Extra collections Overfilled containers and waste placed Extra collections after special days such as around containers is not collected within 1 Christmas, if necessary; day of appearance. Containers Overfilled containers Overfilled containers per pre-collection Overfilled containers shall appear only in point more often than 1 to 2 times per month exceptional cases, on average per pre- and after important holidays. collection point 1 to 2 times per month and after important holidays. Frequently overfilled containers require the placement of additional containers. Ideally: Containers should be min 70% full on average, when collected, but never overfull. View of containers • Labeling is damaged or unreadable; • Containers shall be easy to identify and • Painting of container destroyed by more contain address or name or code number than 10%; of the collection company; • Graffities and advertising is not re- • Containers must look properly painted. moved. Maintenance • Container is unliftable, due to damages; Containers have to be properly maintained • Container leaks leachate; and, where necessary, replaced. • Container is damaged more than 10% at parts, uncritical for functionality. Washing Containers are not washed according to 6543P06/ Final Report 11-10 Item Requirement Indicator for non-performance Regular washing of containers every 8 schedule weeks according to schedule Pre-collection points Prepared terrain Containers placed on unsuitable ground, e.g. The terrain shall be prepared for the contain- soil. ers and washable – i.e. the pre-collection point shall have a hardstanding Cleanliness of pre-collection points Pre-collection point is left with waste and Pre-collection points must be free of MSW litter spread in the area and litter in an area of 2 m around the points after each collection of MSW Washing of pre-collection points Pre-collection points are not cleaned in Regular cleaning of pre-collection points accordance with schedule from dirt every 8 weeks according to schedule Vehicles Leakage holding Leaking of collection vehicles Any vehicle has to be equipped with a leakage holding tank; Availability • Monthly reports disclose a lower avail- Ensure an availability of vehicles of more ability than 80% • Regular checks of the employer show lower availability Identification Damaged, dirty or unreadable display of Vehicles shall be easily identifiable and information. display address or name or code number of the collection company; No spillage and littering Vehicles littering while loading without Avoid spillage and littering during loading direct cleaning, and loosing waste while and transport. The load on open trucks shall driving. be covered by tarpaulins when transporting. Washing Dirty vehicles, where the number plates and Vehicles shall be regularly washed the hauler information cannot be read, or which have only cleaned these parts. 6543P06/ Final Report 11-11 Item Requirement Indicator for non-performance Odor and animal control Odor and animal control • Containers to be covered with lids and lids being closed • Containers are not washed according to • High frequency of collection schedule • Regular washing of containers 6543P06/ Final Report 11-12 12. Waste Collection Tariff Structure 12.1 Household waste tariffs Selecting the method of charging fees and collecting the charges is a key step in developing a solid waste collection system. The goal is to generate the funds necessary to pay for collection services. In addition, a well- designed funding method can also help a community achieve its waste reduction and management goals. Cost recovery mechanisms are the structure through which all or a portion of the costs of collection, treatment, and disposal systems, as well as the associated financial, environmental and social costs of waste generation, are recovered from waste generators. Waste management systems that rely entirely or largely on fees collected from users to meet the costs of service are those most likely to be able to operate on a sustainable basis over the entire economic life of the system. Those cost recovery mechanisms which are most likely to be successful in providing for longer term sustainability are those that have been designed on the basis of their ability to meet specific objectives determining or signifi- cantly affecting longer term sustainability. Therefore, the design of cost recovery mechanisms for waste management sector needs to be done on the basis of economic, financial, social, and administrative objectives. The following objectives are of particular importance in the setting of waste tariff structures and tariffs: • financial sustainability and full cost recovery • economic efficiency and marginal costs • price equity and the polluter pays principle • administrative efficiency and good governance • affordability and universal access The tariff system proposed is based on the following principles- (i) reflect- ing actual costs and (ii) being feasible in terms of applying it to Armenian context (i.e. the practical side of collection) In the report on Tariffs (Task 4), the issue of waste tariffs for both house- holds and commercial was already covered and was addressed again in the Report on PSP Options. The model which has been turned over to the MOE allows the analysis of the tariffs and effects on Municipal budget. We have recommended main- taining the per person reference for household tariffs, as this is a usual and reasonably cost-oriented tariff structure. 6543P06/ Final Report 12-1 Household tariffs should be equal for both collection areas i.e. uniform for the entire city, even if the costs of service vary slightly which will inevitably be the case since the financial proposals will be different. Waste tariffs paid by waste generators are by law determined by the mu- nicipal council either as firm or as upper limit. Legal opinions differ as to how the law is to be interpreted in this aspect. The payments to the operator must be detached from the political decisions of the municipal council, or it must be clearly guaranteed that the municipal council follows the results of the tender and the contractual conditions. There is a wide variety of waste tariff options used throughout the world. The different options reflect different waste management strategies and policies, different historical backgrounds and different emphasis on cost- orientation vs. incentives for waste reduction and recycling. In all countries which could serve as a model for Armenia, the trend is toward more com- plex tariff systems with the intention to encourage waste reduction and recycling. Nevertheless, systems still exist with hardly any reference to the costs of waste management and subsidization is still known if not wide- spread. The household waste tariff in Yerevan based as it is on a per capita charge still fits into the overall scheme. As elaborated in the Task 2 Report there are basically 3 different waste collection forms in Yerevan • Collection from high-rise residential21 buildings with more than 6 stories and being equipped with waste chutes of 3 different types • Collection from multi-family residential buildings with publicly accessi- ble pre-collection points • Collection from small single-family or duplex residential areas currently using the so-called horning system of bag collection as the collection truck drives through the neighborhood. The per capita tariff system can be used for all three collection types. Some examples of other possible tariff systems that appear to be promising for Yerevan are: • Flat rate charged together with a property tax (which would need to be introduced) • Flat rate per household charged to all registered households • The flat rate per household could be enhanced with a variable component based on number of household members • Variable rate per household based on floor area of the house or apartment • Waste charge per property charged according to the total floor area (charging per property to the registered owner would put the burden of payment first on the property owner. For condominiums or multi-family 21 The socio-economic survey showed that a significant number of small commercial enterprises are also located in residential buildings and use the public pre-collection points. 6543P06/ Final Report 12-2 buildings – which are probably mostly in Municipal ownership – the overall charge would have to be distributed to the individual apartments according to some allocation rule, such as per capita, per m² of floor area, per apartment). The advantage would be in billing since the number of billed customers would be greatly reduced. • Waste charge per property charged according to the ordered container. There would have to be a minimum container size mandated to avoid evasion measures. For condominiums or multi-family buildings – which are probably mostly in Municipal ownership – the overall charge would have to be distributed to the individual apartments according to some allocation rule, such as per capita, per m² of floor area, per apartment). The advantage would be in billing since the number of billed customers would be greatly reduced. For practical application, the bins at public pre-collection points would have to be allocated to individual properties. • Single-family residential areas could be switched to bins or containers allocated to each property and charged per volume of the container. Col- lection would be done on the basis of a firm collection schedule • In accordance with the cost-orientation principle, rates could be differen- tiated between the different collection areas proportional to their different cost structures for collection. Container based tariff system are used internationally and have proven to be viable. 12.2 International Experience The three principal alternatives for funding solid waste services are (1) property tax revenues, (2) flat fees, and (3) variable-rate fees. Property tax system A traditional way of funding solid waste collection is through property taxes, especially in communities where collection has been performed by municipal workers. A principal reason for this method is its administrative simplicity; no separate system is necessary to bill and collect payments, since funds are derived from moneys received from collection of personal and corporate property taxes22. Despite its ease of administration, however, communities are increasingly abandoning this funding method, at least as their sole funding source. Many municipalities have shifted to covering part or all of their costs through user fees, largely because of caps to tax in- creases. In addition, municipal officials realize that funding from property taxes provides no incentives to residents to reduce wastes through recycling and source reduction. While this was generally tolerated when disposal was relatively cheap, the increased cost to properly manage wastes has caused many communities to find ways to give meaningful pricing signals and incentives to residents. 22 Which usually exist in municipalities, but apparently do not exist with the Yerevan Municipality, although administrative systems must exist in the 12 local city districts 6543P06/ Final Report 12-3 Flat rates Flat fees are a common method for funding collection in many communities served by private haulers and in many municipalities where a separate authority or special purpose fund is used for solid waste services. Although this method does a better job than property taxes in communicating the real cost of solid waste services, it still does not provide an incentive for reduc- ing wastes. Variable rate systems With a variable-rate fee system, generators pay in proportion to the amount of wastes they set out for collection. Variable rates are also called unit rates and volume-based rates. Variable-rate systems typically require that resi- dents purchase special bags or stickers, or generators are offered a range of service subscription levels. When bags or stickers are used, their purchase price is set high enough to cover most or all program costs, including costs for bags and stickers and for an accounting system. Systems that offer generators a range and choice of subscription levels have less administrative complexity than systems that use bags and stickers. However, when generators use bags and stickers, they may be more aware of how much waste they are producing and, therefore, have more incentive to reduce it. In addition, by using smaller or fewer bags or fewer stickers, generators can realize savings from their source reduction efforts immedi- ately. Sometimes communities combine various elements of the above funding methods to form a hybrid system specially tailored for their com- munities. Many variable-rate programs are adapted to mute the potential negative impacts of such systems. For example, a basic level of service offering a certain number of bags or one can per week could be provided to all residents and paid for from property taxes. Generators could then be required to place any additional wastes in special bags sold by the munici- pality. Municipalities that choose to provide collection, either on their own or through a municipal contract with a hauler, might find it advantageous to segregate solid waste funds in an enterprise account. With this method, costs and revenues for solid waste services are kept separate from other municipal functions, and mangers are given authority and responsibility to operate with more financial independence than when traditional general revenue departments are used. Some local governments have found that this ap- proach increases the accountability and cost-effectiveness of their solid waste operations23. Overall the most commonly-used methods of variable rate charging for house- hold waste collection and disposal services can be classified into four types: 1. Bag or Tag/Sticker Schemes: under this system the waste collector only picks up waste that has been placed in specially identified bags or containers. Householders may purchase either special bags or tags/stickers which must be fixed to the regular bags or containers used by householders. 23 Source: US EPA Decision Makers’ Guide to Solid Waste Management, Chapter 4 6543P06/ Final Report 12-4 2. Volume-based schemes: whereby householders choose a waste container or bin of a certain volume and an annual charge is based on the container volume, and often the collection frequency as well. 3. Frequency-based schemes: the main characteristic of these schemes is that householders choose the frequency (within limits) of their waste uplift service and are charged accordingly for this service. 4. Weight-based schemes: involve the use of collection vehicles fitted with automated weight-recording equipment these record the mass of the waste during the collection operation at each household. Bins are fitted with electronic identification transponders for logging of the household data relating to each waste uplift. 5. In addition many authorities have implemented ‘hybrid’ systems comprising different components of the above systems. In addition many charging schemes comprise a fixed fee component (i.e. for a ba- sic level of service provision) and a variable fee component (i.e. for a more frequent collection service or for the collection of additional containers of waste above the specified minimum limit). The results of recent research on MSWM tariffs can be summarized as follows24: • The main driver behind the development of household waste charging schemes internationally appears to have been the introduction of new waste legislation (either at a national or local level) that has required a reduction in household waste arisings or a reduction in the waste dis- posed of at landfill. The use of fiscal measures by national or regional governments to require municipalities to implement waste charging schemes does not seem to be widespread. All of the schemes imple- mented successfully have benefited from strong political support. • International experience appears to indicate strongly that the introduction of variable charging for household waste has been successful in encour- aging the reduction in waste for final disposal, increasing recy- cling/diversion rates, and to a more limited extent, encouraging waste minimization. However, these results have been achieved in conjunction with the introduction/further development of recycling and composting schemes to handle the diverted wastes. • It appears from the results of the study that charging schemes have been successfully applied under a wide range of national cultures and local conditions (i.e. urban, rural, mixed). This suggests that in principle there are no particular reasons why such schemes could not be applied success- fully in other places, provided that sufficient account is taken of local conditions during the development and operational management of the schemes. • A number of different types of charging scheme (and combinations of schemes) have been implemented. Volume and frequency based systems appear to be the most popular; however bag and tag/sticker systems are also popular in North America. While weight-based systems are used less extensively (due to perceived technical limitations and opportunities for 24 Source: non-published document reviewing waste charging best practice dated 2000. 6543P06/ Final Report 12-5 errors to occur in the weight measurements) in North America and Aus- tralia, they have been successfully implemented as part of a hybrid weight/volume measurement system in parts of Belgium, Denmark and Switzerland. • Implementation of charging schemes has encouraged householders to decide on the level of service (weekly or fortnightly collections) and the type and size of containers they require. It is possible that less frequent refuse collections could pose a health hazard, but no problems were re- ported in the responses obtained. • While the waste charging strategies used by municipalities range from full cost recovery (common) to a partial costs recovery system; both types of system appear to provide an equally effective incentive to householders to reduce the quantity of household waste for disposal. Waste charges are primarily applied through the councils’ annual prop- erty tax (or rates demand), which may include a visible waste charge; however, nonpayment of the charges does not appear to be an issue for municipalities as in most cases they already have significant powers to recover unpaid debts from residents. For flat annual fees and volume- based systems, payment is normally requested in advance (either annu- ally or bi-annually), while for other charging systems, retrospective pay- ment is used. • In some locations concerns over social exclusion have been countered by providing free tags or reducing the charges for those members of the community receiving benefits. However the number of case studies which reported specific measures to address social inequalities (e.g. through the provision of subsidies to low income households) was very small. This may be due in part to the additional complexity in administer- ing the charging system and also that in most cases, the annual cost of the waste collection service for each household is not high (compared to other utility charges) and typically less than €200 per annum. • Many of the case studies reported problems during the initial implemen- tation of the charging schemes due to a combination of adverse commu- nity reaction and also lack of understanding about specifically what behavioral changes were required of individual householders. In some instances this resulted in a short-term increase in illegal waste tipping; however all of the studies indicated that this phenomenon was relatively short lived. Once the schemes gained community acceptance they were successful in ensuring a high degree of participation by local communi- ties and in achieving reductions in household waste quantities. However, country-specific cultural, social and organizational factors are considered likely to have a strong influence in this respect. • The level of the charge does not appear to be a dominant factor in determining the success of any scheme and low-charge schemes report a similar degree of success as schemes with higher charges. • Many of the case studies, but particularly highlighted by North American experience, emphasized the importance of a carrying out an effective public education campaign prior to and during the implementation of the charging scheme. In some cases the public education campaign was con- tinued for a significant period during the operation of the scheme. 6543P06/ Final Report 12-6 It would appear from the results of this review that a number of factors need to be considered in designing and introducing such variable charging schemes; these include: • strong political support at all levels is essential for the successful imple- mentation of any type of User Pays waste charging scheme; • the type of existing waste management systems (including local avail- ability of recycling facilities) and the general level of awareness of waste management issues amongst residents, including the need to restrict the rising costs of waste disposal and reduce dependence on disposal to land- fill; • given that the major impact of variable charging appears to be to increase diversion of waste from landfill its introduction needs to follow or be in tandem with the development and introduction of recycling infrastructure and services; • considerable promotional effort and awareness raising is required; • local authorities need to have the flexibility to adopt schemes which suit their individual circumstances and requirements; • administration of the system needs to be reliable and cost effective; for this reason there would seem to be advantages in linking it to the current billing system for local taxes/rates; North America Canada A survey conducted in February 2000, found that approximately 200 communities in Canada have fee-for-service residential waste management programs. In Canada, the fee-for-service approach to financing municipal waste management services is most popular in British Columbia and Ontario however there are some programs in place in nearly all provinces. USA Users pay systems have been more widely implemented in the United States than in Canada. This is in part a result of the fact that many U.S. communi- ties have always been charged for waste disposal (i.e., it was never a part of the tax base). A 1999 report published by Duke University identified more than 4,000 U.S. communities implementing unit-based pricing systems. In December 1999, another source reported that this number was in fact 6,000. As of 1999, approximately 67% reported having variable pricing systems, 10% had multi-tier systems and 23% had additional base tax/variable systems. The U.S. Environmental Protection Agency (EPA) reports that pay-as-you- throw (PAYT) communities in the U.S. were on average reducing waste disposal by between 14 to 27 percent and increasing recycling rates from 32 to 59 per cent4. Evidence that PAYT programs work has encouraged both state and federal governments to support communities in developing their own programs. In addition, the EPA considers PAYT programs to be an important component of their Climate Change Initiative. 6543P06/ Final Report 12-7 More than 1,800 communities in Minnesota alone have implemented PAYT pricing systems. This is largely a result of a 1994 Minnesota statute that requires communities to implement weight or volume pricing programs in order to obtain a solid waste collection license (with a few exceptions). Other states are implementing varying levels of mandates and funding support to encourage communities to adopt pay-as-you-throw programs. The EPA supports the development of PAYT programs by providing comprehensive support materials for municipalities (including a video, tool kit, rate setting booklet, case studies, fact sheets and bulletins) and a exten- sive web site (www.epa.gov/payt/index.htm). The EPA also provides communities and states with funds to help develop their PAYT programs. In the past they have funded programs to evaluate various weight and volume based systems. European Union Denmark In Denmark the responsibility for waste management (including household waste) rests with the municipalities. However, waste collection is usually carried out by private contractors under contract to a municipality; about 80% of household waste in Denmark is collected by private waste collection companies. Under Danish legislation, local councils may fix waste charges to cover all the costs associated with the provision of the service (e.g. including plan- ning, administration, collection, recycling and disposal operations). In almost all municipalities in Denmark, the waste management costs are fully covered by the income from these fees. The obligation for payment of these charges rests with the party having a registered right on the property. The waste fee is typically included on the same bill as the Council’s real estate tax - although a small number of municipalities have recently introduced a separate system for billing for waste charges. The Danish government has set initial targets for recycling and incineration of domestic waste. It is common for Councils to calculate a general waste fee which covers all single family houses that use one bin or sack for household waste. Unit fees for multi –storey buildings are often lower, as the cost per household collection is lower. The waste charges vary significantly between munici- palities, however, on average this is around 1,200 DKK per year for a single family house and is typically in the range of 800-2,500 DKK (excluding VAT). Municipalities must be able to document how the waste fee has been calculated, but there is no prescribed calculation method. Weight-based charges for household waste collection are currently imple- mented in less than 10% Danish Municipalities; two of these schemes are in operation since 1992. 6543P06/ Final Report 12-8 France Funding of waste management services in France is carried out primarily through landfill charges that are levied by local authorities and paid to ADEME, the national agency with responsibility for waste management. Currently households throughout much of France are charged through the property taxation system. There is only a limited number of variable waste charging schemes in France. Germany In Germany, responsibility for waste management rests with the municipali- ties which also have the power to impose heavy fines for illegal waste tipping. Variable waste charging schemes are common in some parts of Germany, particularly in the western part of the country where the separate collection of dry recyclables has been carried out since the 1980’s (as part of the country’s ‘Green Dot’ recycling system). Typically these include volume- based schemes combined with extensive curbside collection of recyclables. Netherlands Household waste payment schemes are widely used by municipalities in the Netherlands and some of these date back to the early 1990’s. Typically local authorities contract the collection services out to a private waste contractor. The types of waste charging schemes used in the Netherlands include: • volume (bin or sack) only; • combined volume & frequency (most common type); • weight-based. It was reported that waste collection schemes that use plastic sacks are becoming outdated in the Netherlands, as a result of new health and safety legislation, and also that the relatively small number of weight-based systems are more difficult to operate on account of less reliable systems and technology. Sweden Municipalities have the power to implement their own waste management operations and charging schemes, provided that they are self-funding. A range of different variable household waste charging schemes are used by municipalities across the country. Schemes include volume, frequency and weight based systems, with the costs often charged directly to individual households (along with other environmental charges, e.g. water sewage etc.), rather than through local taxation (as is often the case in other countries). New EU countries New EU countries are at different stages. Poland, Czech Republic, Slovakia and Slovenia have been in longer and have introduced most EU standards. However, the sub-national legislative structure is not complete. An example is Romania, where not one council has developed new appropriate waste ordinances or bylaws. 6543P06/ Final Report 12-9 All have received massive aid from EU to introduce modern waste man- agement systems based on and completely compatible with the EU Legisla- tion. Newer entrants having similar former government systems, Romania, Bulgaria, Estonia, Latvia, Lithuania are also revising their waste manage- ment systems with massive aid from the EU. These countries are not comparable to Armenia for the following reasons: • Massive subsidies from EU • Necessity to fully implement EU legislation. 12.3 Commercial waste collection fees In many countries, commercial (and sometimes household) waste generators may choose their own waste collection, i.e. there is competition among waste collection companies for providing services to commercial waste generators. The waste generators must provide a proof of disposal certificate from a registered and licensed waste management company. In some countries this can include the option of self-transportation of waste to the disposal facility (landfill) by the waste generator. The waste fee is then the tipping fee for commercial waste generators charged at the landfill. This option is especially attractive for larger waste generators. The tipping fee can be differentiated to encourage recycling or separation of waste types (such as inert waste, which can be landfilled without leachate treatment). In the following we assume that this option will not be allowed in Yerevan. In the Report on Tariffs (Task 4) we came to the following conclusions regarding commercial waste generators. “It appears that the commercial sector already pays rather high waste fees. In addition, there is the impres- sion that the fees are not justly distributed according to waste generation. However, this conclusion is not based on a review of the actual quantities of waste disposed, but rather on a superficial comparison with household tariffs. Therefore, the Consultant suggests that the fee structure should be left unchanged (if they are indeed above the AMD/ton level determined to be cost covering) for the time being and the surplus over costs should be utilized to cross-subsidize household waste fees if necessary. There is currently no information made available to define an alternative tariff structure.25 The collection companies should be required to carry out a quantities survey of the commercial sector and propose a revised tariff structure based on per ton amounts equivalent to the fees charged to households.” 25 It has been reported that Kentron Community (or collection company) carried out some evaluations of the amounts of waste generated by different commercial entities. However, the data was not made available to the Consultant. Also, it is not certain from the reports whether the information gathered by Kentron is representative and could be applied to all commercial customers. 6543P06/ Final Report 12-10 This is a viable way of proceeding and could be successfully implemented in Yerevan however, after further discussions with the Working Group and Steering Committee, we would now tend to recommend another approach. As an indication of the starting point for commercial tariff reform, the results of the commercial survey regarding payments made by three differ- ent types of commercial entities depending upon their premises are shown in Table 22. Table 22 Survey results: waste fee paid in February 209 Last payment rates (in AMD, per organization per month) Enterprise type Average per Maximum Average Minimum one payment monthly fee A: In blocks with 1,000 6,100 15,000 3,470 chutes B: By public pre- 500 14,250 50,000 3,500 collection point C: Separate building 400 7,000 24,000 2,120 Note: average per one payment indicated that payments are collected for more than one month at a time. Three conclusions are obvious: • There is a wide range between minimum and maximum reported pay- ments • There is no apparent connection to waste volume • The fees are relatively high compared to household fees. The following is a selection of alternative commercial waste fee systems used internationally • Bin systems are the most prevalent for commercial waste generators. A minimum volume of container is specified for different commercial branches. • The same types of systems with bags / tags can be used for (small) commercial waste generators (for MSW) as was described above for households. It should be noted that the information given here only refers to MSW, i.e. waste that is from commercial or industrial sources but has the same charac- teristics as household waste. It does not cover any hazardous or problematic waste types, which must be separately handled and for which different regulative framework exist or should exist. 6543P06/ Final Report 12-11 Lacking any data on the waste generation of different types of commercial companies in Yerevan, it appears that a container based system would be preferable. In this way the equity of charges to different waste generators can be maintained. 12.4 Tariffs for Commercial Enterprises and Institutions In principle, commercial enterprises need to be divided into three types, where different technical solutions of waste collection are possible. Type 1: small waste generators These are enterprises which generate small quantities of waste, as a rule small shops and workshops, which usually is dealt with within the normal waste collection system for residential waste, Type 2: medium waste generators Enterprises and institutions which generate considerable amounts of waste, such as larger companies, larger offices, schools or public administration, which already may have their own larger sized waste containers, however their waste is collected within the normal collection schedule and Type 3: large waste generators Enterprises and institutions which generate that large amounts, that they fill large waste containers (e.g. skips) within a few days to up to 4 weeks, and whose waste is collected outside the residential waste collection system and with separate schedule. The possible tariff structures shall be discussed separately for each of the three generator types. 12.4.1 Tariff structure alternatives for Type 1: small waste generators For small enterprises such as bakeries, butchers, small shops, small offices etc. there usually is no separate waste collection system, but these are integrated into the waste collection system for residential waste. For the system in Yerevan this means that the same collection system would be applied as recommended for residential waste, which is: • In areas of blocks of flats or city centre areas the waste would be brought to the next pre-collection point. • As there are substantial numbers of commercial enterprises located in MABs with waste chutes, these must also use the waste chutes. • In areas of family housing the waste would be in the individual small bins for each house or premise, which are put out on the sidewalk on the regular announced day of collection. • Tariff structure alternatives for this waste generator type have also to take into account the tariff structure for residential tariffs. 6543P06/ Final Report 12-12 126.96.36.199 Collection through pre-collection point or horning system Both, the pre-collection system is no personalized systems, i.e. the waste is brought anonymous to the point of collection. This makes the control of the waste from enterprises difficult, because pre-collection points are obviously also open for enterprises, to place their waste there uncontrolled (Free rider principle). In a personalized system, such as is suggested for single family areas, the collection containers would be related to the generators, i.e. houses or apartments, which would pay a tariff with relation to the volume of contain- ers related to them. In such system the “owners” of the containers, i.e. the house owners would take care that enterprises would not place their waste in their containers without payment, and thus enterprises would be forced to organize their own containers. For the collection system in Yerevan there are three possible alternatives for setting tariffs, which are compared in Table 1. A charging on the basis of property tax, as applied in France, Spain or Bulgaria, was not taken into account since in Yerevan there is no such taxation. Table 23 Tariff structure alternative for small businesses ALTERNATIVE 1: ALTERNATIVE 2: ALTERNATIVE 3: DETERMINATION OF FIX A TARIFF EQUIVA- ESTABLISH 3 TO6 TARIFF CHARGE BASED ON NORMS LENT TO 500 KG/MONTH GROUPS UP TO (PRESENT SYSTEM) 2,000 KG/MONTH Basic assump- The charge is determined per Tariff is fixed, Determine group on basis of tions ton according to a production maximum size of enter- the existing or improved norm prise needs to be deter- production norms, but charge mined. tariff in accordance with the The enterprise is free to group. change to container The enterprise is free to system (see medium change to container system quantity generators), also (see medium quantity in cooperation with other generators), also in coopera- enterprises. tion with other enterprises. Present Most former USSR countries Colombia, Romania application in other countries Unit Dram/t Dram/month Dram/month Invoice Bank Bank Bank collectors Advantages Seemingly relatively exact Low administrative costs, Relatively fair system, since determination of charge, since all small enterprises there is a certain adjustment since size of organization is pay the same. to the actually generated taken into account. However, No monitoring of changes quantity. present norms are outdated, at the enterprises neces- Relatively low administrative and even similar enterprises sary. costs in determining the produce different quantities tariff, since grouping allows of waste. for less monitoring of changes at the enterprises and an easier reclassification if changes happen. 6543P06/ Final Report 12-13 ALTERNATIVE 1: ALTERNATIVE 2: ALTERNATIVE 3: DETERMINATION OF FIX A TARIFF EQUIVA- ESTABLISH 3 TO6 TARIFF CHARGE BASED ON NORMS LENT TO 500 KG/MONTH GROUPS UP TO (PRESENT SYSTEM) 2,000 KG/MONTH Disadvantages There is a permanent need Unfair system especially System only works, if for updating the data about for very small enterprises enterprises are honest with the size and activity of the employing only one or their declaration of size and enterprises, due to changes of two persons. waste generation. However, size enterprise or number of enterprises will try to pay as employees. less as possible, i.e. they will System only works, if not properly declare their enterprises are honest with data. Therefore there is an their declaration of size and increased need waste generation. There is a need of updating Furthermore the norms need the enterprise data about to be reassessed every few once a year. years, to update to changes in generation habits. Assessment If well maintained, relatively Relatively unfair system, Relatively fair system with fair system, but requires but it has a low need for reduced need for monitoring. permanent monitoring and monitoring of the enter- However, difficult to updating, i.e. causes high prises’ economic devel- determine the correct group costs of administration. opment. Recommenda- Recommended for its tion simplicity, although it is unfair to some extent The comparison of the possible tariff structure alternatives shows an advan- tage for tariff Alternative 2. Although it is unjust to very small enterprises, it is a very simple system and does not need large administrative efforts to determine norms, or to determine and maintain enterprise data. 188.8.131.52 Collection from family housing areas with bin system This collection system is similar to the system applied for medium waste quantity generators. Therefore the tariff structure is being discussed in the next chapter. 12.4.2 Type 2: Medium generating enterprises and institutions Due to the quantity of waste generated, this type of waste generator is getting their own “pre-collection points” on their own premises. These containers may have the size of 240 l bins, or the type of containers as used for the street pre-collection point. If waste collection in family houses is carried out based on a bin system, also the small commercial and institutional waste generators in this area get bins. Collection of the waste from these containers is carried out with the same RCVs and on the same trips as for the residential waste. However, it might 6543P06/ Final Report 12-14 be agreed with the generators, that their containers may be collected in a lower frequency. For this type of generators the tariff alternatives as shown in Table 24 are of relevance. As mentioned in above, a tariff structure using the property taxation system was not taken into account. Table 24 Tariff alternatives – medium sized waste generators ALTERNATIVE 1: ALTERNATIVE 2: ALTERNATIVE 3: ALTERNATIVE 4: DETERMINATION CHARGE BASED ON TARIFF PER BASIC TARIFF OF CHARGE BASED ACTUAL QUANTITY CONTAINER PER CONTAINER; ON NORMS COLLECTED PLACED ADDITIONAL (PRESENT SYSTEM) TARIFF PER VOLUME COL- LECTED Basic assump- The charge is The charge is Each container By a basic tariff, tions determined per ton determined per ton in placed is charged a which covers the according to a accordance with the monthly fee at a fixed costs, each production norm container size, fixed number of container placed number of liftings liftings, no matter is charged per month and the whether full or monthly. filling degrees noted empty. Additionally from in the service form The change of the the number of and a predetermined container number is liftings and the density of the waste. possible once a volume of the year. containers the Additional liftings collected waste is are charged on a charged. Collec- per lift basis. tion is only carried out upon call of the generator. Present applica- Most former USSR Tashkent/Uzbekistan Bogota/Colombia, Some county tion in other countries Sofia/Bulgaria councils in countries Germany Unit AMD/t AMD/t AMD/container/ AMD/container/ month month + AMD/t Invoice collectors Bank Bank Bank Bank Advantages Seemingly rela- Exact determination Less administrative Allows for tively exact of charge, since the costs, since charge coverage of fixed determination of waste volume is can easily be costs and still charge, since size measured. determined. includes compo- of organization is More reliable nent for waste taken into account. system for tariff quantities However, present calculation, since measured. norms are outdated, the container space Most fair system and even similar is constant. for both parties, enterprises produce since it reflects different quantities most closely the of waste. real cost situation. Disadvantages There is a perma- High changes in Partially unfair Incentive to nent need for waste quantities system, since it prevent waste updating the data throughout the year does not consider quantities by 6543P06/ Final Report 12-15 ALTERNATIVE 1: ALTERNATIVE 2: ALTERNATIVE 3: ALTERNATIVE 4: DETERMINATION CHARGE BASED ON TARIFF PER BASIC TARIFF OF CHARGE BASED ACTUAL QUANTITY CONTAINER PER CONTAINER; ON NORMS COLLECTED PLACED ADDITIONAL (PRESENT SYSTEM) TARIFF PER VOLUME COL- LECTED about the size and cause that often only the real waste disposing the activity of the part of the containers quantity collected, waste to street enterprises, due to is filled, whereas the however, the pre-collection changes of size tariff calculation was number of contain- points. enterprise or based on the capacity ers is variable in number of employ- available. the long term and ees. Permanent changes thus the generators System only works, make cost recovery can adjust their if enterprises are of fixed costs number of contain- honest with their difficult. ers to their needs. declaration of size High incentive to and waste genera- prevent waste tion. quantities by Furthermore the disposing the waste norms need to be to street pre- reassessed every collection points. few years, to update to changes in generation habits. Assessment If well maintained, Highly fair system Good system for Fair system for this seems to be a for the producer, but tariff setting and both sides, relatively fair difficult for planning charging. The however, includes system. However, of tariffs. Too strong producer can adjust incentive for the many different incentive for dispos- the container disposing the types of enterprises ing the waste capacity (number waste produced at and their size and produced at public of containers) once public pre- activities make it pre-collection points. a year to his real collection points almost impossible need. to calculate the actually generated waste. Recommendation The application of this system is recommended, since it combines in sufficient way the possibility to reduce the con- tainer capacity with more stability for cost recovery. It is recommended that all enterprises and institutions, which obviously produce more than 500 kg/month and which do have sufficient space for placement, will be equipped with their own containers. Furthermore enter- prises with less than 500 kg production may also choose to have containers. 6543P06/ Final Report 12-16 The charging system should be simple at the beginning and thus Alternative 3 is recommended. This system is a compromise between a lumpsum system, which allows the Municipality a secure income, and variability by modifying the container volume once per year. In order to prevent that this flexibility in container volume is used to dispose the waste illegally to the street pre-collection points, a minimum volume per employee is to be maintained at all times. 12.4.3 Type 3: Large generating enterprises and institutions These generators generate that much waste that it becomes financially feasible for them to have even direct haulage to the landfill organized. This means that these generators could fill a skip or a roll-on-roll-off container of 5m³ or even more volume within 1 or 2weeks. In principle, the same systems could be applied as for Type 2 generators. However, since the skip or roll-on-roll-off container is weighed at the landfill and its load can be attributed to one single generator, the following tariff would probably be more suitable and thus is recommended for this type of generators: • Fixed amount for the collection, transport and rent of the skip or con- tainer • Variable amount depending on the weighed quantity. This system of charging is a common system in many countries of the world for large generators. 12.4.4 Who is to collect the waste In order to stabilize the system and to ensure an improved waste manage- ment service, there should only be the officially contracted waste collection companies, which provide the collection and transportation services. Enterprises should not be allowed to choose their own collection and haulage company, at least not in the next few years. This situation would also allow the municipality to charge higher fees to commercial enterprises to some extend in order to cross-subsidize the residential MSW management. In the case an enterprise could chose their own service providers, the prices for the services would become subject to market demand and the municipal- ity could not further influence them nor charge higher fees for the purpose of cross-subsidies. 6543P06/ Final Report 12-17 13. Approach for Collection of Waste Fees 13.1 Collecting waste fees With respect to the international experience on tariff collection this section provides some experience as to how the local government bodies (in our case the municipality) typically collect waste fees. First of all, one can say that cash payments made door-to-door have been widely discontinued in developed countries in favor of bank payments. In many countries still waste fees are collected similar to tax collections (see above examples), which is also done by bank transfers, checks etc. Waste fees are generally property related fees and the fee is charged to the owner of a property. For private residences this is practically a household fee. Condominiums on the other hand are treated as a unit, since the collec- tion is also carried out as a unit, i.e. for the entire condominium in large containers. The Condominium administrator adds the waste fee to the other costs of common property and uses a distribution key such as number of persons or floor area of the flat to distribute this cost to the owners of the apartments in the condominium. In more and more countries waste fees are being charged on a cost-covering basis and increasingly tariffs contain incentives for the 3Rs. The issue of different methods of fee collection was already covered in the report on Tariffs (Task 4, Section 5), which was submitted in April 2009, approved by the World Bank and discussed in both a working group meet- ing and a steering committee meeting. Next to a description of the current ways of collecting waste fees, there is a comparison of three options: • Collection with property taxes • Collection by the Municipality (cash collection, similar to current practice) • Collection by the contractor / operator. 13.2 Situation in Yerevan The situation in Yerevan is characterized as: • The Yerevan municipality has only recently taken over new responsibili- ties resulting from the new Law on Yerevan, for which until now no rec- ognizable organizational changes in the municipality administration have been made • The Yerevan Municipality collects no other revenues such as property taxes 6543P06/ Final Report 13-1 • The Yerevan communities, formerly responsible for waste collection, have some administrative structures or experience for collecting waste fees • Currently collection companies collect waste fees, sometimes based on contracts that they have concluded with condominiums (above all) • According to the Law on Local Government Duties and Fees, the fees chargeable by the local governments (also Yerevan municipality) are limited to those enumerated in the law. Only mandatory fees can be charged • Yerevan municipality has communicated lack of knowledge of how to organize collection of waste fees • There is no institutional structure implemented for collection of munici- pal fees • Collection of waste fees based on individual civil law contracts is not a viable solution for a PPP structure in Yerevan. The Consultant recommended an amendment to the Law of Local Govern- ment Duties and Fees to make the waste fee to a mandatory fee. This would give the legal basis for collection and enforcement of collection of the waste fees. Regardless of whether there are any other legislative amendments, the basis for charging fees must be according to the established structure of the RA Law by amending the Law on Local Government Duties and Fees. BOX 1 The Law of the Republic of Armenia on Local Duties and fees Article 1 Subject of the Law 1. This law defines the concept of local duties and fees in the Republic of Armenia, the payers of local duties and fees, the terms and procedures for setting and charging of local duties and fees, regulates other relations connected with local duties and fees 2. The relations connected with the fees charged according to the civil law contracts by the Self-Governing bodies and (or) organizations estab- lished by them are regulated by other laws and legal acts of the Republic of Armenia Article 4 Payers of Local Duties and (or) Fees Payers of local duties and fees are deemed to be physical persons, legal entities and enterprises without the status of a legal entity paying against the exercise of powers mentioned in the article 7 and the activities mentioned in the article 8. Article 7 Types of Local Duties (not applicable for waste fees) Article 8 Types of Local Fees 6543P06/ Final Report 13-2 In the communities of the Republic of Armenia the following types of local fees can be set: a) Compensation fee against the services of Self-Governing bodies related to developing and approving technical-economic criteria regarding to the implementation of works of construction or external-image-changing reconstruction of a building in the territory of community, b) Compensation fee against the services of Self-Governing bodies related to measurement and other works alike, necessary in cases of grant- ing, withdrawing and renting out of the lands under the disposition and use of Self-Governing bodies, c) Participation fee for compensating expenditures related to competi- tions and auctions organized by Self-Governing bodies. The question remains, how to collect the fees since the municipality has no capacity or experience. 13.3 International Experience 13.3.1 Basics Some basic information about what determines how the collection of waste fees is carried out in different countries. • Historical backgrounds differ • Banking practices differ, i.e whether bills are generally paid per check or bank transfer, whether banks provide a service of automatic transfers of regular payments etc. • Waste fees are connected to attempts to introduced integrated waste management, since paying waste fees provides the incentive to reduce waste and recycle • Cash collection is generally something connected with developing countries not developed countries. • Properties are very often the basis for the waste fee liability • In Germany (Europe), for multifamily buildings (based on the fact that the property is the basic unit) the charge is to the owner of the property or for commonly owned property (condominiums) the condominium itself (represented by the agent). The condominium allocates the waste charge along with other common property expenses to all apartment owners (members of the condominium). A problem in Yerevan for implementation of a polluter pays concept is the widespread use of public pre-collection points. The public pre-collection points are not allocated to one particular building or property. Therefore it is more difficult to allocate a waste volume to a particular building. The current concept of a charge per person per month is based on average waste amounts. This concept gives no incentive to reducing waste quantities. 6543P06/ Final Report 13-3 13.3.2 Sources of information International experience is that local governments have the capability and know-how to manage and administer their sources of revenue. In Yerevan this experience is apparently lacking for historic reasons. Starting from a position in which the Yerevan Municipality is experiencing challenges to develop the capacity for the collection of tax revenues, it can be concluded that an essential prerequisite is missing which does not support the applica- tion of international experience. There are a number of resources, which could be used by the Yerevan Municipality to understand international experience. Because these are very useful and provide information targeted for local officials, these are pre- sented here for the information of the relevant authorities. • US EPA website for waste management • US EPA website contents on Pay as You Throw • World Bank Strategic Planning Guide for Municipal Solid Waste Man- agement. 2001 • UNEP. Developing Integrated Solid Waste Management Plan: Training Manual, 2009 US EPA. Decision maker’s Guide to Solid Waste Management, Volume II. 1995. US EPA. Rate Structure Design. Setting Rates for a Pay-As-You-Throw Program. 1999. 13.4 Appropriate recommendation for Yerevan Based on the results of the in-depth analysis of the local situation and a review of the international practices, the Consultant makes a recommenda- tion for waste fee collection based on the system currently employed in Yerevan for other utilities such as electricity, gas, water, telephone and mobile phone. Due to its widely developed branch network (the company has offices in all urban and major rural communities of the RA) HayPost CJSC is a very convenient partner in terms of provision of billing and payment collection services. At the moment, via HayPost it is possible to make payment not only for basic utilities like electricity, water, gas and phone, but also for installation of electricity and gas meters, payment of administrative fines (agreement with state police), taxes, etc. The same services are provided by the majority of local banks. Cooperation with HayPost and banks is beneficial for the applicant utility companies, because they can significantly increase the level of payment collection due to increased comfort of payment for customers and decreased level of violations and free-riders effect (due to elimination of formerly widespread practice of payment collection via corrupted inspectors). 6543P06/ Final Report 13-4 HayPost and banks, in their turn, receive additional income for the provided service, thus, improving their financial flows. The basic principal of cooperating is as follows. The applicant company (e.g. Electric Company – EC or the Yerevan Municipality) signs a service provision contract with Service Provider (HayPost CJSC). According to the contract, EC has to provide HayPost with information on consumed electric- ity (in kWh) and the appropriate payments for all served customers. Gener- ally, this information is submitted to HayPost once per month. However, some companies have already initiated activities aimed at increasing the frequency of data submission up to twice per month (e.g. ArmRusgasprom CJSC). The information on all Armenia is submitted by the applicant company to the HayPost head office in Yerevan in electronic form and uploaded into central computer (in this case for Yerevan only, of course). Unfortunately due to lack of technical capacities and qualified personnel in regional branches and offices, HayPost is not able to disseminate this information to its branches vie Internet or local network. That is why; the information is being disseminated by drivers and IT specialists and uploaded into branch computers manually. There are several branches without PC support. For these branches information is registered in logs. Currently, HayPost is working on development of its network, so hopefully in the future there will be a single high-capacity server to which all regional branches will be connected. However, this is internal technical issue, which is not a concern of Applicant Company, since services are provided anyway. We have no information about the banks offering such bill collection services, but it seems that they have better information exchange network among their branches; however, on the other hand, no bank can compete with HayPost in terms of number of branches in Armenian settlements26. Once data is installed, HayPost (or bank) offices have to accept payments from the population and keep Applicant Company posted on the results of collection. Frequency of information update as well as all technical issues are subject to individual contracts with various utilities and might differ. But the general principal is the same. Each utility company signs separate contract with HayPost and banks. It worth to mention that there is no unified database network among Hay- Post and banks. So that, if one makes payment for electricity for May in HayPost, he can make the same payment for the same month let’s say in Armeconom Bank (because Armeconom Bank will not be posted on his payment in HayPost until the next moth when information on payments is updated). This is of course not convenient, however common sense says that one would never make same payment for the same month twice. However, 26 This issue is only marginally relevant, since the head of most households will be in Yerevan, where the network is surely existent. 6543P06/ Final Report 13-5 if that is the case, the money will not be lost but stay on a customer account at the particular utility and be used for payment for the next month. As far as I understood, HayPost as well as various utilities and banks prefer to work in such separate way because of information safety reasons. Anyway, so far there was no any major conflict or problem because of this. Neverthe- less, sooner or later they will go for unified payment and data collection system. According to Mr. Sahakyan, HayPost will be happy to cooperate with Waste Collection Operator(s) in the field of payment collection, should the Opera- tor(s) express such a desire. It is interesting to note that HayPost performs collection of payments for waste collection services in Meghri City (Suynik Region of RA). According to our information, this is a part of USAID Local Government Project (LGP) initiatives. (visit this site: http://globalarmenia.am/en/news/2008-11- 05/37/ ) Accordingly, HayPost already has experience of bill collection for waste management services, even though this service is provided outside of Yerevan. The Public Services Regulatory Commission (which main function is to balance companies and customers interests and rights), with regard to other (regulated) utilities, obliges utilities to inform the population in a timely manner on availability of payment accounts (in other words date when information on payment for a particular month is already available for population in HayPost, banks, payment terminals, etc.) as well as payment deadlines, after which service provision will be stopped by the utility company. It appears that this would be the most promising means of collecting the waste fees. The Yerevan Municipality would only need to maintain the database of customers (households, commercial, institutional) and transmit to the service provided this information on a monthly basis. 13.5 Enforcing Payments As calculations have shown, the fee collection rate has a large impact on the fees that must be charged to all waste generators, since in the end the Municipality wants to collect enough money to pay all related expenses. Therefore, a deduction would be made for non-collections when estimating the required tariffs and fees and these would be increased as a result. Therefore measures to enforce payment are very important, first, for thesus- tainability of the system and second for equity reasons: those that pay are being made to pay also for those who don’t pay. 6543P06/ Final Report 13-6 Enforcing payments requires several basic measures: • Provision of quality services • Having the proper legal basis for demanding payment, which is the intention of the recommended legal revisions • Making the payment easy for the waste generators so that the pure process of paying does not discourage payment • Public information about the importance of the solid waste management system and information about the consequences of not paying. This can be accompanied by a period of leniency until people can see that the ser- vices have improved. This should, however, be explained and a deadline named from which point in time all payments will be followed-up and prosecuted • Following up on non-payments, if necessary, all the way to the courts. The Municipality should also budget legal council for collections and cases should be vigorously pursued • Non-payments should be penalized to pay for the need to follow-up. The penalties should be strong enough to discourage people from delaying payments. 6543P06/ Final Report 13-7 14. Violations 14.1 Administrative violations The issue of penalties or remedies for violations of regulations or contrac- tual violations covers two different issues which must be separated. One issue is the introduction and enforcement of fines or other punishments for violations of law (littering, illegal dumping, etc.) and these refer to the penal code or to local government code of violations. The Law on Administrative Violations and its relevance to the MSWM was briefly discussed in the Report on Legal Issues. This is where administrative violations for waste related offenses should be regulated. Providing advice on legal issues of levels and application of fines or other punishments for administrative violations is outside of our TOR. These are issues that need to be decided by the Armenian authorities. However, in some of the examples provided, there are also examples of penalties. The authorities must decide if these are appropriate for use or orientation in Yerevan. 14.2 Contractual penalties Another issue is the issue of possible breaches of the waste collection agreement regarding quality of services to be provided by the operator. These issues are subject of the agreement itself. An example of Liquidated Damages is shown in the Sample Standard Bidding Documents for DBO Waste Management Facility referenced above. An example of penalty arrangements in contracts is provided below, but finally this must be addressed by the transaction advisor. Example of Contractual Penalty Arrangement based on notices The penalties arrangement has basically two parts. The first part (below in 4.1) is the determination of the value of the penalty and the deduction amounts based on the severity of the performance failure. The second part (below 16.9) determines the types of faults which are penalized and the monitoring of the performance. 4.1 PERFORANCE DEDUCTION FACTOR for LANDFILL SER- VICES For each Billing Period m of an Operating Year n the Performance Failure Points for Landfill services (PFPL) shall be accumulated and the Perform- ance Deduction Factor for Landfill services (PDFLm,n) for the Contractor’s failure to perform shall be determined in accordance with Table 9- 2. 6543P06/ Final Report 14-1 The Employer will issue Notices of deficiencies as per Part 2 – SECTION VI Employer’s Requirements, Appendix 4: Operation Management Re- quirements, sub-section 16.9. The Employer shall be entitled to apply a Performance Financial Deduction from the Service Payment for each Notice upon the Contractor in Part 2 – SECTION VI Employer’s Requirements, Appendix 4: Operation Manage- ment Requirements, sub-section 16.9. For each Default Notice Performance Failure Points (PFP) shall be applied as follows: Table 4-1: Performance Failure Points and Rectification and Default Notices Type of Notice PFP equivalent Rectification Notice (each 10 1 PFP notices) Serious Rectification Notice (each 1 PFP Notice) Default Notice (each notice) 1 PFP PERFORANCE DEDUCTION FACTOR for LANDFILL SERVICES For each Billing Period m of an Operating Year n the Performance Failure Points for Landfill services (PFPL) shall be accumulated and the Perform- ance Deduction Factor for Landfill services (PDFLm,n) for the Contractor’s failure to perform shall be determined in accordance with Table 4- 2. Table 4-2: Determination of the Performance Deduction Factor PDF Performance Failure Points (PFP) Performance Deduction Factor accumulated during a Billing Period (PDF) m In % of the current OSPmn 0 – 10 No deduction 11 - 20 0.01 (= 1%) 21 – 30 0.03 (= 3 %) 31 - 40 0.05 (= 5 %) >40 0.100 (= 10%) Note: OSP is Operation Service Period 6543P06/ Final Report 14-2 16.9 PERFORMANCE MONITORING BY THE EMPLOYER’S REPRESENTATIVE 16.9.1 Monitoring The Employer’s Representative will constantly have representatives on Site who will carry out monitoring and other activities. The Employer’s Repre- sentative will regularly monitor the Operation Service of the Contractor. The Contractor shall co-operate fully with the efforts of the Employer’s Representative to monitor and control the Operation Service and at all times shall allow the Employer’s Representative to inspect all records and docu- ments maintained by the Contractor regarding the Operation Service, and to inspect the Works, vehicles and equipment, including spare parts invento- ries, stores, and workshop repair facilities. The basic quality criteria for the assessment of the Operation Service are: • Compliance with all standards and rules; • Appearance of the facilities and their environment; • Absence of complaints and claims; • Observance of the reporting requirements; • Satisfaction of reasonable Notices of the Employer’s Representative no later than 24 hours from notification, either through solving the problem or submitting a schedule on how to solve the problem. The Employer’s Representative shall be informed on and will attend any scheduled inspection by other authorities. In order to monitor the service performance the Contractor shall ensure that any waste and/or fractions thereof, will be weighed and registered. 16.9.2 Service Deficiencies The following types of Operation Service deficiencies shall cause Operation Service Rectification Notices. Each single element of Operation Service deficiency, if identified, shall be counted separately: • Workers not wearing protective clothing (per each event); • Unsafe working practices (per each event); • Misuse of vehicles and equipment (per each event); • Unacceptable behavior of Contractor’s Staff (per each event); • Failure to maintain the Operation Services DataBase updated (per each day); • Restrict access of Employer’s Representative to the Operation Servises DataBbase below agreed standards (per each day); • Failure to prepare and keep updated the Operation & Maintenance Plan (per each day of delay); • Failure to submit reports and documentation (per each day and re- port/documentation); 6543P06/ Final Report 14-3 • Maintenance of equipment not carried out in accordance with manu- facturers requirements (per each case); • Leachate breakouts or seeps (per each day); • Failure to meet monitoring requirements (per each event); • Failure to comply with odor requirements (per each day); • Failure to meet noise requirements (per each day); • Failure to meet proper disposal requirements, e.g. non-placement of daily cover, improper interim cover, etc. (per each day and area); • Failure to meet any other environmental and operation requirements (per each event); • Violations of laws by the Contractor’s Staff (per each event); • Any other non-compliance with any requirement of the Contract, not mentioned above or below (per each event). The following serious Service deficiencies shall result in a Serious Rectifi- cation Notice: • Non-attendance to services management meetings without reason- able excuse (per each case) • Failure to supply vehicles and equipment in accordance with the Contract (per each case and per each Billing Period of failure); • Frequent breakdowns of equipment and works due to Contractor’s negligence; • Unsafe working conditions for workforce operating the Landfill area, including unhygienic conditions, poor atmosphere, unguarded equipment (per each case and per each Billing Period of failure); • Disposal of waste, rejects or Green Waste to locations other than the Landfill Area (per each case); • Unsafe disposal of hazardous and untreated medical waste (per each case) • Repetitive appearance of a Service deficiency, which already had been rectified after a Rectification Notice – per each repetition in a Billing Period. 16.9.3 Operation Service Default Notices If the Contractor fails to complete the Services in accordance with its obligations under the Contract, which adversely affects the performance of the Services, the Employer’s Representative shall have power acting reasonably and in accordance with the spirit of the Contract: • to require the Contractor to complete the Services not performed in accordance with the Contract immediately and at no cost to the Em- ployer at within a certain period, by issuing Performance Notices; • to withhold payment for those Services not performed in accordance with the Contract until these have been completed; or • to withhold payment and make arrangements for the Employer, on notice to the Contractor, to provide and perform by its own or the staff of another contractor those Services in default and deduct the extra cost incurred by the Employer in so doing from any payment due to the Contractor. 6543P06/ Final Report 14-4 Rectification, Serious Rectification and Default Notices If, at any time, the Employer’s Representative determines that in any particular case the Contractor has failed to perform the Services in accor- dance with the provisions of this Contract, it shall be entitled to issue to the Contractor a Notice instructing the Contractor to rectify the failure (“Recti- fication or Serious Rectification Notice”). The Contractor shall immediately proceed to rectify such failure at it’s own cost and expense within forty eight (24) hours of receipt of Notice or within such other longer period as may have been stipulated by the Employer’s Representative in writing, such that the Services comply with the provisions of this Contract or submit to the Employer’s Representative a plan as to how to rectify such failure including a time schedule giving an outline of the reasons of such prolonged rectification needs, subject to the approval of the Employer’s Representa- tive.. Reasons for such prolonged rectification needs could be: • Extenuating circumstances reasonably considered to be beyond the control of the Contractor such as civil emergencies, disputes or in- dustrial action in organizations other than the Contractor's; • Adjustments being made to the Operation Services by agreement with the Employer’s Representative in the interests of better effi- ciency and standards of service; • Adverse weather conditions; • Force Majeure; • Any other circumstances considered to be reasonable to the Em- ployer’s Representative. If the Contractor fails to rectify the failure the subject of a Rectification or a Serious Rectification Notice in accordance with above, the Contractor shall be deemed to be in breach of his obligations under the Contract and the Employer shall be entitled to issue a Default Notice (“Default Notice”). Further failure on the part of the Contractor to rectify the failure shall entitle the Employer to terminate the Contract. Each Rectification and Serious Rectification Notice shall refer to one deficiency, each of which shall be rectified by the Contractor and may, at the Employer’s sole discretion, provide for recommendations on how to, or by what means the Contractor shall, rectify the Services. All Rectification, Serious Rectification and Default Notices shall be re- corded and used by the Employer in determining the Contractor’s overall performance of the Services. Deduction for Default The Employer shall be entitled to make deduct ions from the Service Payment for each Rectification, Serious Rectification and Default Notice upon the Contractor as specified in Appendix 5, Financial Memorandum. During the (6) months following the Commissioning Date, the Deduction shall not be applied. 6543P06/ Final Report 14-5 Irrespective of the deductions applied, the Contractor shall remain under an obligation to complete all the Operation Service in accordance with the Contract, including remedying all the omissions or deficiencies notified, before any payment becomes due to him. 6543P06/ Final Report 14-6 15. Implementation of PPP Arrangements 15.1 Standard Bidding Documents This section of the Final Report fulfills the requirements of Task 8 “Assis- tance for implementation of PPP arrangements”. The best systematic and proven way to prepare a tender is to use as a starting point (at least) the available standard bidding documents. Standard bidding documents can be found from the donor agencies websites, for example: • World Bank (www.worldbank.org) • Interamerican Development Bank (www.idb.org) • Asian Development Bank (www.adb.org. procurement guidelines) • EBRD (www.ebrd.org) For example see World Bank Procurement Guidelines. Guidelines: Pro- curement under IBRD Loans and IDA Credits. Website: www.Worldbank.org The World Bank has produced and made available specifically for a solid waste management facility sample standard bidding documents: World Bank: Sample Standard Bidding Documents. Design-Build-Operate Documents for a Solid Waste Facility. August 2005 Also available on the website: www.worldbank.org. 27 These describe all aspects of the tendering process and give a clear outline of the tender documents themselves. Since the project will not be Bank funded, it is not mandatory to use these standards, but it is advisable. The standards are structurally very similar. These standard bidding documents are provided with instructions to the tendering body which lead through the documents and explain the usage of the standard bidding and contract forms. One example for the Consultant’s practice is a DBO tendering of a landfill using the FIDIC standard contract for DBO and standard bidding documents of a donor bank. Another is a project tendered in several lots for collection and landfill carried out for a sovereign government. The contents are reproduced below, as examples only28: 27 Entering the name of these documents in Google leads directly to a downloadable file. 28 Due to copyright and confidentiality issues, it is not possible to give the full details. Details are generously available for publicly accessible World Bank documents. 6543P06/ Final Report 15-1 15.1.1 Contents of typical Bidding Documents - Landfill DBO PART 1 – Bidding Procedures Section I. Instructions to Bidders Section II. Bid Data Sheet Section III. Evaluation and Qualification Criteria Section IV. Bidding Forms Form of Letter of Bid Form of Bid Guarantee Section V. Eligible Countries PART 2 – EMPLOYER’S REQUIREMENTS SECTION VI. EMPLOYER’S REQUIREMENTS Appendix 1 Technical Specifications Appendix 2 Drawings Appendix 3 Bill of Quantities (BOQ) Appendix 4: Operation Management Requirements Appendix 5: Financial Memorandum Appendix 6: Environmental and Social Management Plan Appendix 7: Environmental Impact Assessment Appendix 8: Schedules PART 3 – Conditions of Contract Section VII. General Conditions (GC) Section VIII. Particular Conditions (PC) Part A - Contract Data Part B – Specific Provisions SECTION IX: Annex to Particular Conditions – Contract Forms Letter of Acceptance Contract Agreement Agreement of Dispute Adjudication Board Performance Security Advance Payment Security Maintenance Retention Guarantee PART 4 - Additional Information Annexes 6543P06/ Final Report 15-2 15.1.2 Example Invitation to Tender – MSWM Tender with different lots for Landfills and collection services Table of Contents 1. Introduction 1.1 Overview 1.2 Contractual and Commercial Conditions 1.3 Technical Description of Project 1.4 Alternative Proposals 2. Definition of Terms 3. Key Project Features 3.1 Description of Existing and Future Collection and Disposal Services 3.1.1 Present System 3.1.2 Future System 3.2 General Technical Requirements 3.2.1 Collection Services 3.2.2 Disposal Services 3.3 Implementation Schedule 4. Legal, Contractual and Commercial Information 4.1 Legal Form of Bidder and Contractor 4.2 Insurance 4.3 Laws and Regulations 4.4 Permits and Licenses 4.5 Service Agreement 5. Proposal Preparation 5.1 Pre-Bid Meeting 5.2 Proposal Submission Requirements 5.3 Compliance with Instructions 5.4 Request for Clarifications 5.5 Addenda to RFP 5.6 Deadline for Submission of Proposals 5.7 Late Proposal 5.8 Period of Validity of Proposal 5.9 Confidentiality 5.10 Language of Proposal 5.11 Letter of Conveyance 5.12 Bid Bond 5.13 Content of Proposal 5.14 Alternative Proposal 5.15 Cost of Bidding 6. Selection of Proposals and Agreement Award Procedure 6.1 Clarifications of Proposals 6.2 Eligibility and Qualification of Bidder 6.2.1 Annual Turnover 6.2.2 Experience / References 6.2.3 Joint Venture / Consortium Requirements 6.3 Determination of Responsiveness 6.3.1 Substantial Responsiveness 6.3.2 Rejection 6543P06/ Final Report 15-3 6.4 Evaluation of Proposals 6.4.1 Procedure 6.4.2 Technical Criteria 6.4.3 Price Evaluation 6.5 Agreement Award Procedure 6.5.1 Right to Accept any Proposal and to Reject any or all Proposals 6.5.2 Selection of Preferred Bidder 6.5.3 Negotiations 6.5.4 Notification of Agreement Award 6.5.5 Signing and Effectiveness of Agreement 6.5.6 Notification to Unsuccessful Bidders 6.6 Performance Security 7. Disclaimer 8. Bid Forms Besides the standard bidding documents there are aids (toolkits) explaining the processes involved and a complete example published by the World Bank showing a tender process for "waste treatment facilities" see reference above. World Bank Guidance Pack Private Sector Participation in Municipal Solid Waste Management Part II: Guidance Note Part III: for preparing for private sector participation29 Available from World Bank Website: www.Worldbank.org. http://rru.Worldbank.org/Toolkits/SolidWasteManagement/ The toolkit contains valuable information for preparing PPPs. The EU has also prepared Guidelines for Successful Public-Private- Partnerships, March 2003, which is generally available on the web (enter title in Google and a downloadable file is returned). This guideline explains many aspects of PPP processes and principles, but must be read carefully to understand what is valid for EU countries and what is generally valid everywhere. (ec.europa.eu/regional_policy/sources/docgener/.../ppp_en.pdf) These toolkits and guidelines are useful for involved parties to understand what is required and how things are done. Some of these references were already handed over to the MOE during the last mission, which was basi- cally support and assistance to the RA Government. 15.2 FIDIC draft contracts Further, the International Federation of Consulting Engineers (FIDIC) publishes draft contracts which can be utilized with the above standard bidding documents. These draft contracts cover the recommended services and contract forms. We will briefly describe these draft contracts and how they are used in the context of an international tender. 29 Already delivered to MOE on file for use and distribution. 6543P06/ Final Report 15-4 The most relevant are called: FIDIC red book for construction FIDIC yellow book for mechanical electrical FIDIC gold book for Design-build-operate FIDIC Orange book for design-build and turnkey Also FIDIC publishes a guide for tendering procedures. These documents can be purchased for a reasonable fee from FIDIC (see: www.fidic.com). FIDIC contracts are generally the backbone of the donor standard bidding documents and there are special multi-donor harmonized (MDH) versions of the contracts. The Consultant recommends that the RA Government and the Yerevan Municipality make themselves familiar with these standard contracts and the way they are used for international tendering processes. The documents can be purchased as PDF-File or hardcopy from FIDIC online. The charge is nominal (around € 20) for each document. The FIDIC contracts are pro- tected by copyright, however, and cannot be reproduced in this report. 6543P06/ Final Report 15-5 FIDIC DBO General Conditions of Contract These general conditions are not modified according to Procurement Rules. Modifications if necessary are done in Specific Conditions 1. General Provisions 1.1 Definitions 1.2 Interpretation 1.3 Communications 1.4 Law and Language 1.5 Priority of Documents 1.6 Contract Agreement 1.7 Operating License 1.8 Assignment 1.9 Care and Supply of Documents 1.10 Errors in the Employer’s Requirements 1.11 Employer’s Use of Contractor’s Documents 1.12 Contractor’s Use of Employer’s Documents 1.13 Confidential Details 1.14 Compliance with Laws 1.15 Joint and Several Liability 2. The Employer 2.1 Right of Access to the Site 2.2 Permits, Licences or Approvals 2.3 Employer’s Personnel 2.4 Employer’s Financial Arrangements 2.5 Employer’s Claims 3. The Employer’s Representative 3.1 Employer’s Representative’s Duties and Authority 3.2 Delegation by the Employer’s Representative 3.3 Instructions of the Employer’s Representative 3.4 Replacement of the Employer’s Representative 3.5 Determinations 4. The Contractor 4.1 Contractor’s General Obligations 4.2 Performance Security 4.3 Contractor’s Representative 4.4 Subcontractors 4.5 Nominated Subcontractors 4.6 Co-operation 4.7 Setting Out 4.8 Safety Procedures 4.9 Quality Assurance 4.10 Site Data 4.11 Sufficiency of the Accepted Contract Amount 6543P06/ Final Report 15-6 4.12 Unforeseeable Physical Conditions 4.13 Rights of Way and Facilities 4.14 Avoidance of Interference 4.15 Access Route 4.16 Transport of Goods 4.17 Contractor’s Equipment 4.18 Protection of the Environment 4.19 Electricity, Water and Gas 4.20 Employer’s Equipment and Free-Issue Material 4.21 Progress Reports 4.22 Security of the Site 4.23 Contractor’s Operations on Site 4.24 Fossils 5. Design 5.1 General Design Obligations 5.2 Contractor’s Documents 5.3 Contractor’s Undertaking 5.4 Technical Standards and Regulations 5.5 As-Built Documents 5.6 Operation and Maintenance Manuals 5.7 Design Error 6. Staff and Labour 6.1 Engagement of Staff and Labour 6.2 Rates of Wages and Conditions of Employment 6.3 Persons in the Service of Employer 6.4 Labour Laws 6.5 Working Hours 6.6 Facilities for Staff and Labour 6.7 Health and Safety 6.8 Contractor’s Superintendence 6.9 Contractor’s Personnel 6.10 Records of Contractor’s Personnel and Equipment 6.11 Disorderly Conduct 7. Plant, Materials and Workmanship 7.1 Manner of Execution 7.2 Samples 7.3 Inspection 7.4 Testing 7.5 Rejection 7.6 Remedial Work 7.7 Ownership of Plant and Materials 7.8 Royalties 8. Commencement Date, Completion and Programme 8.1 Commencement Date 8.2 Time for Completion 8.3 Programme 6543P06/ Final Report 15-7 8.4 Advanced Warning 8.5 Delays Damages 8.6 Contract Completion Certificate 8.7 Residual Life 9. Design-Build 9.1 Commencement of Design-Build 9.2 Time for Completion of Design-Build 9.3 Extension of Time for Completion of Design-Build 9.4 Delays Caused by Authorities 9.5 Rate of Progress 9.6 Delays Damages relating to Design-build 9.7 Suspension of Work 9.8 Consequences of Suspension 9.9 Payment for Plant and Materials in Event of Suspension 9.10 Prolonged Suspension 9.11 Resumption of Work 9.12 Completion of Design-Build 9.13 Failure to Complete 10. Operation Service 10.1 General Requirements 10.2 Commencement of Operation Service 10.3 Independent Compliance Audit 10.4 Delivery of Ray Materials 10.5 Training 10.6 Delays and Interruptions during the Operation Service 10.7 Failure to Reach Production Outputs 10.8 Completion of Operation Service 11. Testing 11.1 Testing of the Works 11.2 Delayed Tests on Completion of Design-Build 11.3 Retesting of the Works 11.4 Failure to Pass Tests on Completion 11.5 Completion of Works and Sections 11.6 Commissioning of Parts of the Works 11.7 Commissioning Certificate 11.8 Joint Inspection Prior to Contract Completion 11.9 Procedure for Tests Prior to Contract Completion 11.10 Delayed Tests Prior to Contract Completion 11.11 Failure to Pass Tests Prior to Contract Completion 11.12 Retesting Prior to Contract Completion 12. Defects 12.1 Completion of Outstanding Work and Remedying Defects 12.2 Cost of Remedying Defects 12.3 Failure to Remedy Defects 12.4 Further Tests 12.5 Removal of Defective Work 6543P06/ Final Report 15-8 12.6 Contractor to Search 12.7 Unfulfilled Obligations 13. Variations and Adjustments 13.1 Right to Vary 13.2 Value Engineering 13.3 Variation Procedure 13.4 Payment in Applicable Currencies 13.5 Provisional Sums 13.6 Adjustments for Changes in Legislation 13.7 Adjustments for Changes in Technology 13.8 Adjustments for Changes in Cost 14. Contract Price and Payment 14.1 The Contract Price 14.2 Advance Payment 14.3 Application for Advance and Interim Payment Certificates 14.4 Schedule of Payments 14.5 Asset Replacement Schedule 14.6 Payment for Plant and Materials intended for the Works 14.7 Issue of Advance and Interim Payment Certificates 14.8 Payment 14.9 Delayed Payment 14.10 Payment of Retention Money 14.11 Application for Final Payment Certificate Design-Build 14.12 Issue of Final Payment Certificate Design-Build 14.13 Application for Final Payment Certificate Operation Service 14.14 Discharge 14.15 Issue of Final Payment Certificate Operation Service 14.16 Cessation of Employer’s Liability 14.17 Currencies of Payment 14.18 Asset Replacement Fund 14.19 Maintenance Retention Fund 15. Termination by Employer 15.1 Notice to Correct 15.2 Termination for Contractor’s Default 15.3 Valuation at Date of Termination for Contractor’s Default 15.4 Payment after Termination for Contractor’s Default 15.5 Termination for Employer’s Convenience 15.6 Valuation at Date of Termination for Employer’s Conven- ience 15.7 Payment after Termination for Employer’s Convenience 16. Suspension and Termination by Contractor 16.1 Contractor’s Entitlement to Suspend Work 16.2 Termination by Contractor 16.3 Cessation of Work and Removal of Contractor’s Equipment 16.4 Payment on Termination 6543P06/ Final Report 15-9 17. Risk and Allocation 17.1 The Employer’s Risks During the Design-build Period 17.2 The Contractor’s Risks During the Design-build Period 17.3 The Employer’s Risks During the Operation Service Period 17.4 The Contractor’s Risks During the Operation Service Period 17.5 Responsibilities for Care of the Works 17.6 Consequences of Employer’s Risks of Damage 17.7 Consequences of Contractor’s Risks resulting in Damage 17.8 Limitation of Liability 17.9 Indemnities by the Contractor 17.10 Indemnities by the Employer 17.11 Shared Indemnities 17.12 Risk of Infringement of Intellectual and Industrial Property Rights 18. Exceptional Risks 18.1 Exceptional Risks 18.2 Notice of an Exceptional Risk 18.3 Duty to Minimise Delay 19.4 Consequences of an Exceptional Risk 18.5 Optional Termination, Payment and Release 18.6 Release from Performance under the Law 19. Insurance 18.1 General Requirements 18.2 Insurances to be provided by the Contractor during the De- sign-Build Period 18.3 Insurances to be provided by the Contractor during the Op- eration Service Period 20. Claims, Disputes and Arbitration 20.1 Contractor’s Claims 20.2 Appointment of the Dispute Adjudication Board 20.3 Failure to Agree Dispute Adjudication Board 20.4 Avoidance of Disputes 20.5 Obtaining Dispute Adjudication Board’s Decision 20.6 Amicable Settlement 20.7 Arbitration 20.8 Failure to Comply with Dispute Adjudication Board’s Deci- sion 20.9 Disputes Arising during the Operation Service Period 20.10 Expiry of Dispute Adjudication Board’s Appointment 15.3 Guideline for Yerevan SWM Tender In this section following the general form given by the standard bidding documents, a guide for the tendering of SWM services in Yerevan is given. The guide gives some instruction about contents of the sections of such a tender document which contain specifics of the project to be tendered, i.e. headers with some content. The content reflects the Consultant’s earlier 6543P06/ Final Report 15-10 recommendations for the PPP arrangements. This guide is, however, not intended to substitute for the work of the transaction advisor or to predis- pose the work of the transaction advisor. Other sections of the tender documents remain unchanged, so it is considered that they need not be reproduced here. It should be noted that the General Conditions of FIDIC contracts are never revised or modified. Any changes made to FIDIC contracts are made in the Specific Conditions. Therefore, in this section, we also do not reproduce the General Conditions. Likewise the standard bidding documents are meant only to be modified in specific sections, so that the integrity of the standard is maintained. Assuming that the tender would include the collection services, the street cleaning and winter services as well as the design-build-operate contract for the landfill a combined tender could be issued. In this case the above indicated sample tender with different lots could be specified in the follow- ing manner. 1. Introduction 1.1 Overview 1.2 Contractual and Commercial Conditions 1.3 Technical Description of Project 1.4 Alternative Proposals The introduction contains a short description of the tendered services and works. In this case it would explain that there are 3 lots to the tender cover- ing 2 exclusive areas in Yerevan for collection and street cleaning (includ- ing winter services) for 8 years and the design, build and operation for 8 years of the sanitary landfill. It would state that one bidder can bid for all lots but will not be awarded more than one. Contractual and commercial conditions will state that the contract will be signed with the Yerevan Municipality and that contractors will be paid by the Municipality, who will collect the waste fees. It will mention any guarantees provided. The technical description will contain, for example, the waste quantity estimate, the size of the City and the areas to be covered. A basic quick description of the services can be given here. It would describe the size of the site for the landfill and the circumstances, i.e. existing site being used by third party for gas extraction, 2 cells, one for MSW and one for industrial inert waste. Here it will be stated whether alternative proposal are allowed and if yes for which services. 6543P06/ Final Report 15-11 This part is similar to the brief project description which is generally provided for the pre-qualification and in the announcement. 2. Definition of Terms This is self-explanatory. All of the important terms will be defined here and these definitions should agree with the definitions in the draft contract. However, the definitions must still be included here since this part of the tender documents does not become part of the contract. 3. Key Project Features 3.1 Description of Existing and Future Collection and Disposal Services 3.1.1 Present System 3.1.2 Future System This is self-explanatory. Parts of the reports (Task 1, 2 and 3) describing the present system can be modified and included here. The future system is described briefly based on the general technical requirements. 3.2 General Technical Requirements 3.2.1 Collection Services 3.2.2 Disposal Services The general requirements to be presented here are reflected in Section 4.2 and Section 5.3 above for collection and street cleaning (and winter ser- vices) and, of course, the respective reports in full. The requirements of the landfill would be described with the basic features described in Section 6 above. Requirements are given in Table 20 Design requirements and Table 21 Contractual requirements for different collection types. 3.3 Implementation Schedule This is also self-explanatory. An implementation schedule showing the tendering period, the scheduled date for signing the contract and the terms for mobilization, construction of the landfill and start-up of the services is given. 4. Legal, Contractual and Commercial Information 4.1 Legal Form of Bidder and Contractor 4.2 Insurance 4.3 Laws and Regulations 4.4 Permits and Licenses 4.5 Service Agreements 6543P06/ Final Report 15-12 In this section it can be stipulated whether the operator will have to be a local company. The tender documents specify what the minimum requirements for insur- ance coverage will be. The relevant laws and regulations of the RA Gov- ernment and any Municipal ordinances can be mentioned here for the information of the bidders. There will be three service agreements and 2 different types of agreements. The draft contracts are part of the tender documents, so that the bidders know what the contractual requirements will be. 5. Proposal Preparation 5.1 Pre-Bid Meeting 5.2 Proposal Submission Requirements 5.3 Compliance with Instructions 5.4 Request for Clarifications 5.5 Addenda to RFP 5.6 Deadline for Submission of Proposals 5.7 Late Proposal 5.8 Period of Validity of Proposal 5.9 Confidentiality 5.10 Language of Proposal 5.11 Letter of Conveyance 5.12 Bid Bond 5.13 Content of Proposal 5.14 Alternative Proposal 5.15 Cost of Bidding This is all self-explanatory. If in doubt the standard bidding documents referenced above give exact instruction on these issues. 6. Selection of Proposals and Contract Award Procedure 6.1 Clarifications of Proposals 6.2 Eligibility and Qualification of Bidder 6.2.1 Annual Turnover 6.2.2 Experience / References 6.2.3 Joint Venture / Consortium Requirements The eligibility of bidders is recommended to be determined before the actual tendering by a pre-qualification process. However, it is also possible to evaluate the eligibility and qualification of the bidders during the tender evaluation. The eligibility and qualification criteria to be fulfilled will be different for the landfill DBO part of the tender and the Collection / street cleaning part. Usually the qualification criteria are divided into financial / commercial and technical experience requirements. The financial criteria are necessary to ensure that the bidder is able to manage the size of project being tendered. Therefore the criteria such as annual turnover will be measured to be in 6543P06/ Final Report 15-13 relation to the tendered project. The tendered project should not be so large in relation to the annual turnover of the company that it would cause financial strains on the bidder. The experience required should also be in relation to the services and works tendered. For example, if a landfill for 300,000 t of waste per year is to be constructed and operated, the bidder should have at least one earlier landfill of similar size, i.e. greater than 150,000 t per year, for example, in its reference list. These projects must be documented and the tendering authority may want to question some of the references. This should be possible. Some words regarding eligibility may be useful. It can be required that a joint venture of a local and a foreign company is formed in Armenia for the works and services. In this case there must be stipulations about parent company guarantees or other securities to support the financial qualification of the bidders. In the case the bidder is a joint venture of a local and a foreign company, the qualification requirements may be distributed unevenly between the part- ners. That is, for example, more weight may be placed on the experience of the international partner than on the local partner. 6.3 Determination of Responsiveness 6.3.1 Substantial Responsiveness 6.3.2 Rejection 6.4 Evaluation of Proposals 6.4.1 Procedure 6.4.2 Technical Criteria 6.4.3 Price Evaluation 6.5 Agreement Award Procedure 6.5.1 Right to Accept any Proposal and to Reject any or all Proposals 6.5.2 Selection of Preferred Bidder 6.5.3 Negotiations 6.5.4 Notification of Agreement Award 6.5.5 Signing and Effectiveness of Agreement 6.5.6 Notification to Unsuccessful Bidders 6.6 Performance Security 7. Disclaimer 8. Bid Forms For a design build operate contract (landfill), the important parts of the tender documents which need notes on the contents would be the following. Section II. Bid Data Sheet In the standard bidding format, the specific project data are consolidated in a bid data sheet. The other information remains unchanged. The bid data sheet contains then such information as: • Tendering authority • Addresses for submission • Due dates, times for the proposal submission 6543P06/ Final Report 15-14 • Financing institution • Form and amount of the bid bond or security Section III. Evaluation and Qualification Criteria This section contains usually in tabular form the complete evaluation criteria and qualification criteria, if there has been no pre-qualification of bidders. The evaluation criteria can be divided into technical and financial criteria and the weighting of the two are given. PART 2 – EMPLOYER’S REQUIREMENTS The employer in the FIDIC definition is the contracting authority. The employer’s requirements in this form of tender is the heart of the specifica- tion of the required works and services. Depending upon the details of the tender, this can be an extremely lengthy section detailing all required and contractually binding specifics of the works and services to be provided. SECTION VI. EMPLOYER’S REQUIREMENTS The employer’s requirements contain a first brief description of the works and services on a few pages. The contents might be, for example: • Definitions • Intended purpose of the works and operation services • Scope of works and operation services • Standards and regulations • Key personnel requirements • Limits of supply • General requirements for design and build • QA and HSE requirements during construction Appendix 1 Technical Specifications This is a functional description of the specifications of the works to be designed and built. Appendix 2 Drawings For a design-build contract only the basic functional drawings would be provided such as an overview of the site to be provided. Appendix 3 BOQ The Bill of Quantities schedules are based on the functional design. Appendix 4: Operation Management Requirements This annex contains a functional description of the operations services to be provided. The proposal must elaborate on these requirements. Before beginning of the operation phase, the contractor / operator must present a detailed operations manual containing all matters of importance and ena- bling the monitoring of the services provided. Appendix 5: Financial Memorandum In this format, the financial memorandum contains a brief description of the financial basis of the tendered services. This would include the source of funds for the construction, any guarantees provided, the source of regular payments for operation and the operation of escrow accounts, for example. 6543P06/ Final Report 15-15 This section is connected with the General Conditions of Contract in that changes to these funding arrangements must be notified to the contractor by the Employer. Appendix 6: Environmental and Social Management Plan If an environmental and social management plan is developed, it is included here and becomes part of the Contract. Appendix 7: Environmental Impact Assessment The environmental impact assessment also becomes part of the contract by having it inserted here in the Employer’s Requirements. Appendix 8: Schedules The schedules include the payment schedules and the formulas for deter- mining the payments and any regular adjustments for price changes over the period of the Contract. These parts define the essential particular contents of the works and / or services to be provided. 6543P06/ Final Report 15-16 Annexes 6543P06/ Final Report Annex 1 Example of a website informing citizens about waste management issues and containing some of the particulars of local council responsibilities as they are regulated in the UK. 6543P06/ Final Report www.direct.gov.uk County and district councils In most of England, there are two levels: a county council and a district council. County councils cover large areas and provide most public services, including schools, social services, and public transportation. Each county is divided into several districts. District councils cover smaller areas and provide more local services, including council housing, gyms and leisure facilities, local planning, recycling and trash collection. District councils with borough or city status may be called borough councils or city councils instead of district council, but their role is exactly the same. Unitary authorities In most large towns and cities, and in some small counties, there will be just one level of local government responsible for all local services. These are called a 'unitary authority'. Depending where they are in the country, these may be called metropolitan district councils, borough councils, city coun- cils, county councils, or district councils. (this arrangement is similar to the situation of Yerevan Municipality) In London, each borough is a unitary authority, but the Greater London Authority (the Mayor and Assembly) provides London-wide government with responsibility for certain services like transport and police. In April 2009, the government introduced unitary governments in seven regions in England; reducing 44 local authorities down to just nine. The idea was to simplify the system, as local residents were increasingly confused about which local authority was responsible for local services. In Scotland there is a unitary system with one level of local government. In Northern Ireland, there are local councils, but most services are carried out by other organisations. Waste Collection - UK Your local council is responsible for the collection and disposal of waste in your area. Find out when your bins and waste are collected Household waste is usually collected from your home on a weekly basis. Waste for recycling and the remainder of the waste is often collected separately and at different intervals. Contact your local council if your bin is missed from the normal collection. In the UK, Councils are required to operate household waste deposit sites, where you can deposit your household waste - free of charge. If you do take your waste to one of these sites you may need to take proof that you are 6543P06/ Final Report resident in the area before you can deposit your waste. Contact your local council to find out what its requirements are. Council bins Some councils do not supply households with domestic refuse bins. You can contact the waste collection department within your council to see if you can arrange to have a bin. If your bin is lost or stolen you should contact your council straight away. The council will advise you on how you can secure your bin to avoid theft. Recycling your waste Nearly two thirds of all household rubbish can be recycled. Many local councils now collect waste for recycling. Some councils provide separate bins for the collection of waste to be recycled. Contact your council if you want to request a recycling container. How do you dispose of bulky waste items? Larger items such as furniture, fridges and washing machines may be collected from your home by arrangement for a small charge. Contact your council for a list of items that can be collected and details of charges. If you have a lot of larger items you can take them to your local civic amenity site yourself. Contact your council’s environmental services or waste manage- ment department to find out the arrangements in your area. Who to contact If you are a householder, your waste collection authority (district, borough or unitary council) is obliged to provide a collection service for bulky items. However, they can charge for this service. Alternatively, you can take your appliance to your local civic amenity site for disposal free-of-charge, and they will ensure that it is disposed of safely. Help your local authority by ensuring that it is emptied and cleaned before you send it for disposal. If local traders offer to collect and dispose of your appliance you can help the environment by checking that they intend to dispose of it in accordance with the law. If you are unsure, contact your local office of the Environment Agency (08459 333111) or your council. In some areas, local traders or charities may accept appliances if they are in good working order - again check your local telephone directory for details or alternatively look up your local charity on the Furniture Re-use Net- work's website. Remember fly-tipping is illegal. Dumped refrigerators and freezers pose a real hazard to small children or pets who may be harmed or become trapped inside. The website 'Junkk.com' is a great way to post items that you may no longer need, but may be just what someone next door is looking for. Fly-tipping 6543P06/ Final Report If you dump waste where it is not permitted you can face very large fines and even be sent to prison. If you see fly-tipping, you can report it to your council. What is fly-tipping? Fly-tipping is the illegal dumping of rubbish or bulky items on land not licensed to receive it. Fly-tipping can be dangerous, pollutes land and waterways and costs the council tax payer significant amounts of money to clear away. Dumping household, industrial and commercial waste illegally is a serious criminal offence that carries a fine of up to £20,000 (unlimited if the case goes to the Crown Court) or an offender can even be sent to prison. It is also an offence to permit fly-tipping. Local councils treat this problem very seriously and will usually prosecute anyone caught fly-tipping waste. Fly-tipping is often associated with dumping waste from vehicles; in this case the person who owns the vehicle can also be prosecuted, which means that it is possible for a prosecution to occur when only the vehicle, not the driver, is identifiable. The police also have the powers to seize vehicles used for fly-tipping. Your local council provides waste disposal sites and recycling centres where you can safely and legally dispose of unwanted items. If you discover fly-tipped waste do not: touch the waste - it may contain syringes, broken glass, asbestos, toxic chemicals or other hazardous substances disturb the site; there may be evidence that could help identify the fly- tippers and lead to their prosecution Do: visually try to work out what the waste consists of and how much there is make a note of the day, date and time you saw the tipping, its exact location and whether it is in or near water If you see someone fly-tipping make a note of: - how many people are involved and what they look like - what has been tipped - how much and what it looks like - details of any vehicles involved including make, colour and registration number if possible Report fly-tipping to your council You should contact your local council if you see someone fly-tipping or to report fly-tipped waste; in both cases, provide as much detail as possible. The following link will allow you to enter your details and take you to your local council website where you can find out more. Street cleaning UK Your local council is responsible for sweeping streets and removing litter. Find out how your street litter is removed and how to report any problems. 6543P06/ Final Report Council street cleaning Your local council sweeps roads and footpaths helping to keep the environ- ment clean. If you feel your street needs cleaning, please contact cleansing or environ- mental services or their alternative at your local council. The council has responsibility for cleaning public land and 'A' roads. Please ensure you record the name and time of your call and find out what action they intend to take and when. Schools have a responsibility to clear litter and refuse from their own grounds, but not for litter outside the grounds. If a piece of private land is littered, the owner is responsible. The Environ- mental Protection Act 1990 gives both councils and the public the right to take legal action to enforce others to clean up areas. If you have concerns about litter or to report a problem, you should contact your local council. The following links will let you enter details of where you live and then take you to your local authority website where you can find out more. Chewing gum The ‘Clean Neighbourhoods and Environment Act’ defines gum as litter. It’s an offence to drop litter on all land in the open air, including private land, water and beaches down to the low water mark. Local authorities can set the level of fixed penalty notices issued for littering offences (between £50 and £80). However, the Act puts no requirements on local authorities to clean im- pacted gum or stains If you have concerns about litter or to report a problem, you should contact your local council. Street waste from drug use Waste from drug use can be disturbing and a health hazard to the public. If you find used drug equipment, you must report this to your local authority. They will arrange for the removal and disposal of needles, syringes and other drug related items that are discarded. The following links will let you enter details of where you live and then take you to your local authority website where you can find out more. Street furniture Your local authority will provide and maintain street furniture like seating, decorative lighting and cycle racks. These items can be found throughout your district, in streets, on pavements, in town centres and parks. 6543P06/ Final Report If you are concerned about the condition or maintenance of any street furniture in your area, contact your local authority. Remember to provide exact location details and the condition of the item. The following links will let you enter details of where you live and then take you to your local authority website where you can find out more. Dead animals Your council will be responsible for the removal of any animal found on the public highway. This includes wild animals such as badgers and foxes as well as domestic pets such as cats and dogs. The council will not usually remove a dead animal from a private property. However, they may be able to offer advice on how you should remove the carcass or charge a fee for removal. The following links will let you enter details of where you live and then take you to your local authority website where you can find out more. 6543P06/ Final Report Annex 2 As an example of international practice, advice given by the US EPA is presented in the box. (www.epa.gov). This is also a very good source of practical information about waste management, which should be taken into consideration by the Yerevan Municipality. There is practical information for local governments reflecting international experience in North America and references to further sources of information. Box 2 United States Environmental Protection Agency (EPA) Source: www.epa.gov Conservation Tools This Web site was developed as part of EPA's ongoing efforts to provide information and tools to local officials, residents, and others interested in PAYT. Pay-As-You-Throw (PAYT) In communities with pay-as-you-throw programs (also known as unit pricing or variable-rate pricing), residents are charged for the collection of municipal solid waste—ordinary household trash—based on the amount they throw away. This creates a direct economic incentive to recycle more and to generate less waste. Traditionally, residents pay for waste collection through property taxes or a fixed fee, regardless of how much—or how little—trash they generate. Pay- As-You-throw (PAYT) breaks with tradition by treating trash services just like electricity, gas, and other utilities. Households pay a variable rate depending on the amount of service they use. Most communities with PAYT charge residents a fee for each bag or can of waste they generate. In a small number of communities, residents are billed based on the weight of their trash. Either way, these programs are simple and fair. The less individuals throw away, the less they pay. EPA supports this new approach to solid waste management because it encompasses three interrelated components that are key to successful community programs: Environmental Sustainability - Communities with programs in place have reported significant increases in recycling and reductions in waste, due primarily to the waste reduction incentive created by PAYT. Less waste and more recycling mean that fewer natural resources need to be extracted. In addition, greenhouse gas emissions associated with the manufacture, distribution, use, and subsequent disposal of products are reduced as a result of the increased recycling and waste reduction PAYT encourages. In this way, PAYT helps slow the buildup of greenhouse gases in the Earth's atmosphere which leads to global climate change. For more information on 6543P06/ Final Report the link between solid waste and global climate change, go to EPA's Cli- mate Change Web site. Economic Sustainability - PAYT is an effective tool for communities struggling to cope with soaring municipal solid waste management ex- penses. Well-designed programs generate the revenues communities need to cover their solid waste costs, including the costs of such complementary programs as recycling and composting. Residents benefit, too, because they have the opportunity to take control of their trash bills. Equity - One of the most important advantages of a variable-rate program may be its inherent fairness. When the cost of managing trash is hidden in taxes or charged at a flat rate, residents who recycle and prevent waste subsidize their neighbors' wastefulness. Under PAYT, residents pay only for what they throw away. EPA believes that the most successful programs bring these components together through a process of careful consideration and planning. 6543P06/ Final Report www.epa.gov/osw/nonhaz/municipal/landfill.htm Landfill standards Modern landfills are well-engineered facilities that are located, designed, operated, and monitored to ensure compliance with federal regulations. Solid waste landfills must be designed to protect the environment from contaminants which may be present in the solid waste stream. The landfill siting plan—which prevents the siting of landfills in environmentally- sensitive areas—as well as on-site environmental monitoring systems— which monitor for any sign of groundwater contamination and for landfill gas—provide additional safeguards. In addition, many new landfills collect potentially harmful landfill gas emissions and convert the gas into energy. For more information, visit EPA's Landfill Methane Outreach Program. Municipal solid waste landfills (MFWLFs) receive household waste. MSWLFs can also receive non-hazardous sludge, industrial solid waste, and construction and demolition debris. All MSWLFs must comply with the federal regulations in 40 CFR Part 258 (Subtitle D of RCRA), or equivalent state regulations. Federal MSWLF standards include: • Location restrictions—ensure that landfills are built in suitable geo- logical areas away from faults, wetlands, flood plains, or other re- stricted areas. • Composite liners requirements—include a flexible membrane (ge- omembrane) overlaying two feet of compacted clay soil lining the bottom and sides of the landfill, protect groundwater and the under- lying soil from leachate releases. • Leachate collection and removal systems—sit on top of the compos- ite liner and removes leachate from the landfill for treatment and disposal. • Operating practices—include compacting and covering waste fre- quently with several inches of soil help reduce odor; control litter, insects, and rodents; and protect public health. • Groundwater monitoring requirements—requires testing groundwa- ter wells to determine whether waste materials have escaped from the landfill. • Closure and postclosure care requirements—include covering land- fills and providing long-term care of closed landfills. • Corrective action provisions—control and clean up landfill releases and achieves groundwater protection standards. • Financial assurance—provides funding for environmental protection during and after landfill closure (i.e., closure and postclosure care). • Some materials may be banned from disposal in municipal solid waste landfills including common household items such as paints, cleaners/chemicals, motor oil, batteries, and pesticides. Leftover por- tions of these products are called household hazardous waste. These products, if mishandled, can be dangerous to your health and the en- vironment. Many municipal landfills have a household hazardous waste drop-off station for these materials. 6543P06/ Final Report MSWLFs can also receive household appliances (also known as white goods) that are no longer needed. Many of these appliances, such as refrig- erators or window air conditioners, rely on ozone-depleting refrigerants and their substitutes. MSWLFs have to follow federal disposal procedures for household appliances that use refrigerants (PDF) (4 pp, 384K, About PDF) . EPA has general information on how refrigerants can damage the ozone layer and consumer information on the specifics of disposing of these appliances. 6543P06/ Final Report Annex 3 Ordinances, Local bylaws and Regulations Provide on file to the Client and the RA Government This is a collection of waste ordinances, local regulations, municipal bylaws pertaining to solid waste management. Waste ordinance Böblingen 2007.pdf Waste Fee Regulation Mainz (unofficial translation).pdf Wabasha County Waste Ordinance.pdf vdi 2160_2008.pdf stearns waste ordinance.pdf leelanau county waste ordinance.pdf Guelph waste_collection by-law.pdf Dunn County waste ordinance.pdf CompactorOrdinance.pdf Calgary Canada waste bylaws.pdf 715 street cleaning bylaw DA.pdf 711 Darmstadt waste bylaw.pdf 6543P06/ Final Report Annex 4 Guidelines and useful documents on “International Experi- ence” Provided on file to the Client and to the RA Government. 6543P06/ Final Report Annex 4 International Experience Directory: EU waste Laws_related WFD.pdf Waste Framework Directive EU waste policies cohesion.pdf Report on the effect of WU waste policies on cohesion goals of EU. Gives an impres- sion of the consequences of introducing EU legislation in waste sector. EU waste list.pdf Waste list containing definition of Munici- pal solid waste Policy and good government WASTE_MANAGENENT Czech Republic Waste Management Plan _PLAN_CR.pdf oodp-Part_III_Binding_part-2003.pdf Binding parts of Czech waste management parts NWMP_2003-2007EN_fin Bulgaria.pdf National waste Management plan - Bulgaria FINANCIAL_MANAGEMENT Local Government financial Management _MANUAL_EN.pdf manual produced for Bosnia-Herzigovnia excellence_gov.pdf Manual on principles of excellent local gov- ernment Bulgaria EU legal.pdf Presentation of the implementation of EU legislation on Bulgarian local government including provision of public services such as waste management PPP Guidelines WB PPP_waste_fulltoolkit.pdf World Bank Guidelines for PPP in solid waste management. Contains examples of contracts, etc. ppp_en.pdf EU report / guideline on PPP Public information This section contains examples of several documents informing the public about waste man- agement. These are not only interesting as public awareness examples but also contain infor- mation about local waste management regulations. US Wisconsin Recycling in MAB Brochu- Brochure for condominiums about introduc- re.pdf ing improved solid waste management prac- tices UK Salford guidance-on-the- This guideline gives information for building provision-of-waste-storage- designers and responsible persons on how to recycling-collection-facilities.pdf implement proper waste collection for resi- dential buildings Solid_Waste_The_Quest_ This is a prepared program for information for_Less_EPA.pdf for school children by US EPA EPA overview ISWM .pdf This is a brochure giving the fundamentals of Integrated solid waste management environservicestandards.pdf This is a brochure of a community explaining the solid waste management services pro- vided. Tariffs and collection France - Study of the funding of the public This document contains a brief description of waste disposal service in 2006 - v2009.pdf how waste collection and disposal is funded in France EPA rsdhandbook.pdf This is an EPA guidebook on introducing Pay-as-you-throw tariffs. EPA payworkb.pdf This is a workbook for the above. comparison of waste tariffs in BRD und This is a very good article explaining many Cz.pdf characteristics of solid waste management tariffs in Germany and Czech Republic (in German) Tendering guidelines Sample-DBO-Bidding-Docs- World Bank example of bidding documents SWM-Facility19Aug05.zip and procedures for tendering a solid waste management facility as DBO IDB standarding bidding docs786685.pdf Interamerican Development Bank standard bidding documents IDB guide for procurement of goods.pdf IDB guide explaining the procurement proc- ess and documents fidic_dbo_sem1_mortimer_hawkins.pdf This is a presentation explaining the FIDIC DBO contract and containing information about FIDIC contracts in general fidic dbo_london_oct07_slides.pdf This is another presentation of FIDIC DBO contract EBRD works.pdf This is the EBRD standard document for works dbo_prepress_f.pdf This is the FIDIC DBO contract as pre-press version. There is now a usable first edition, which must be purchased from FIDIC ADB Guidelines-Procurement.pdf These are the ADB guidelines Waste management manuals_good practice WB guidance land_fill_design.pdf This is an old World Bank guideline for land- fills. It still contains some interesting infor- mation Wastesolutions_Terminology.pdf Terminology for waste management USA best practice winterservices This is a US publication which reviews the nchrp_rpt_577.pdf technologies of winter snow and ice removal. UNEP SWM Binder1.pdf This is an extensive 500 page guide on solid waste management published by the UNEP k99007 EPA efficient collection.pdf US EPA guide on waste collection IWM_scoreboard-binder.pdf UNEP guide for evaluating waste manage- ment in a country ISWMPlan_Vol4.pdf This is a guide for integrated solid waste management published in 2009 by UNEP ISWMPlan_Vol3.pdf ISWMPlan_Vol2.pdf ISWMPlan_Vol1.pdf guide for landfills WB.pdf WB guide for landfills Germany VDI Richtlinie 2160.pdf German regulations for placing of containers around residential buildings EUWMC_Good_Practice_Overview.pdf This is a review of best practice in different EU countries with references to further sources of information European best practice Winterservices This is a EU cooperative program for deter- TG3final.pdf mining best practice for winter services complete EPA decision-makers guide.pdf US EPA complete guide to solid waste man- agement for decision-makers Berlin experience with waste chutes.pdf This is a notice on issues arising referring to waste chutes in Berlin.
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