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									                           Final Report
                           October 2009

Advisory Study on the Municipal Solid
Waste Management in Yerevan

        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

                                           Please contact:

                                                             Dietmar Mettler
                                           Extension:        699

                                                             Jeffrey Johnson
                                           Extension:        659

Rev No. Rev-date     Contents/amendments                           Prepared/revised   Checked/released

   0    16.10.2009                                                 JNS/DM             LIN

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-

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-
                       •   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
                  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-
                  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
                        •   Commercial organizations (restaurants, shops, hotels, offices and
                        •   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.
                    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-

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



                    Quantity (t/a)
                                                                                       Scen 1
                                     350,000                                           Scen 2
                                                                                       Scen 3



                                           2007   2012   2017    2022       2027

                  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
                  (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

                  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
                          − 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.

                        • 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.           MABs without chutes and large institutions and commercial
                  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-

                        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”

 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
                           • No          container
                             cleaning      vehicle

                  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

                  Depending on the number of service areas tendered, several systems could
                  perceivably co-exist in Yerevan, each one in a different collection area.           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.

                      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
                        • 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.           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-

                  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

                  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-

                  • 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

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

                  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

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

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-

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-

                  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
                  • 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

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
                                                                                              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
Shops, cafés, pubs restaurants,
cinemas, theaters, amusement
arcades, heavily frequented by
public, delivery traffic, trees,
seating areas, multi-story
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
Streets with some shops                  E       1x         2x       2x      1x      I               I
Shops, cafés, pubs, restaurants,
pedestrians, moving and
stationary traffic trees, multi-story
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
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-
                  • cleaning of footpaths/sidewalks along roads of municipal and district
                    importance to be carried out on behalf of the municipality by the cleaning

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-

                  • 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-
                  • 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

                  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
                  • 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
                  Immediate action is required to at least limit the heaviest environmental

                  • 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
                  • 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

                  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

                    Accepted by the Working Group as Government Consultation Body
                    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.
                    The official estimate of the Yerevan City Administration is 8 million m³.
                    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)
                  future                                                Composting
                extension                                                  area
                                                    Access road
                             Zone D:
                                             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
                  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

                  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

                  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.

                    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
                                                           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
                  Zone D                                     ~ 100,000               n.a.
                  increasing tendency, due to active

                  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

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
                                             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
                                             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
                               •   Stepwise introduction of standardized bins for family housing
                          • 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
                                                                      • 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
                                                          • 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
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

    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
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

 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

              Informal                                                           Green waste
            recycling +                                                           from parks
            Pilot project
             35,000 t/a                                                        Pilot green
                                                                             composting plant
                                                                                2,000 t/a
            35,000 t/a                                                                     Compost
                                                                                            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-

                  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

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

                       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-

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
                  • 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)
                                                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
                  • 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

                  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
                  • 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

                  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

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


                        Tariff (AMD per person per month)




                                                              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.

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-

                  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

                    The interviews and meetings conducted for this task 6 are shown in Annex A.
                    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

                  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

                  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-

                  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.

                     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%

                    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

                     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

                     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
                  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

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

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.

                       Source: US EPA
                       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.


                  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-

                  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

                  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-
                  • 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

                  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-
                  - 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-
                  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
                  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
                  scavenging                              Usually a prohibition
                  Waste fees and charges
                  Levying of charges for utilization of   General rules
                  Value added tax                         application
                  Parties liable for charges              Which party (usually the property
                  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
                  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

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
                       • 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

                       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
                      • 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-

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
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
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
                                                                                                                               For large commercial: skip
                                                                                                                                  or other large volume

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
     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
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
                        • 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
                        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
   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-

                  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
                  • 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

                     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

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.

                     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.

                       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

                  • 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
                  • 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

                       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
                  •     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-
                  • 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
                  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.

                  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

                  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 ( 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
                  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

                  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
                  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.

                  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.

                  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

                  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-

                  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

                  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.”

                    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
                                                              one payment         monthly fee
                  A: In blocks with
                                               1,000          6,100            15,000        3,470
                  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-
                  • 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
                  • The same types of systems with bags / tags can be used for (small)
                    commercial waste generators (for MSW) as was described above for

                  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          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

                     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
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.          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

                     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-
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
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 +
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-
                         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
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
Recommendation                                                           The application of
                                                                         this system is
                                                                         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-
                  • 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
                  • 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

6543P06/ Final Report                                                                        13-1
                  •     The Yerevan communities, formerly responsible for waste collection,
                        have some administrative structures or experience for collecting waste
                  •     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
                  •     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

                  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

                  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.
                  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

                  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,

                     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

                  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:
                  05/37/ )

                  Accordingly, HayPost already has experience of bill collection for waste
                  management services, even though this service is provided outside of

                  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

                  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
                  • 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

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

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.

                  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
                  Type of Notice                        PFP equivalent
                  Rectification Notice (each 10         1 PFP
                  Serious Rectification Notice (each    1 PFP
                  Default Notice (each notice)          1 PFP

                  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

                  16.9.1 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-

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
                      • 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
                      • 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

                  •     World Bank (
                  •     Interamerican Development Bank (
                  •     Asian Development Bank ( procurement guidelines)
                  •     EBRD (

                  For example see World Bank Procurement Guidelines. Guidelines: Pro-
                  curement under IBRD Loans and IDA Credits. Website:

                  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: 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

                  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:

                   Entering the name of these documents in Google leads directly to a downloadable file.
                   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
                  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

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

                  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:
                  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. (

                  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.

                       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:

                  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-
                        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

                  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-
                         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
                                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

                  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

                  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

                  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
                                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.
                  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

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

                  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

                  The website '' is a great way to post items that you may no longer
                  need, but may be just what someone next door is looking for.


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
                  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

                  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

                  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. ( 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)
                  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

                  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

                  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
                        •   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

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
                  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-
                  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
oodp-Part_III_Binding_part-2003[1].pdf         Binding parts of Czech waste management
NWMP_2003-2007EN_fin Bulgaria.pdf              National waste Management plan - Bulgaria
FINANCIAL_MANAGEMENT                           Local Government financial Management
_MANUAL_EN[1].pdf                              manual produced for Bosnia-Herzigovnia
excellence_gov[1].pdf                          Manual on principles of excellent local gov-
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-
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[1].pdf                           for school children by US EPA
EPA overview ISWM .pdf                        This is a brochure giving the fundamentals of
                                              Integrated solid waste management
environservicestandards[1].pdf                This is a brochure of a community explaining
                                              the solid waste management services pro-

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[1].pdf                        This is an EPA guidebook on introducing
                                              Pay-as-you-throw tariffs.
EPA payworkb[1].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

Tendering guidelines

Sample-DBO-Bidding-Docs-                      World Bank example of bidding documents                       and procedures for tendering a solid waste
                                              management facility as DBO
IDB standarding bidding docs786685[1].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
EBRD works[1].pdf                             This is the EBRD standard document for
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[1].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-
Wastesolutions_Terminology[1].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[1].pdf              UNEP guide for evaluating waste manage-
                                          ment in a country
ISWMPlan_Vol4[1].pdf                      This is a guide for integrated solid waste
                                          management published in 2009 by UNEP
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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