The only way to solve India’s waste management problems is by getting the government and local municipalities out of the waste management business and creating incentives for private companies to bring in cutting-edge technologies to collect, transport, segregate, recycle, reuse and dispose of waste. A formalized waste management industry built by private entrepreneurs, backed by private equity, and supported by user fees would clean up the country in five years and also create tens of thousands of good jobs.

In a previous blog, I described the enormous problem of waste management that India confronts. With increasing consumption and urbanization the difficulties will only exacerbate with time. It is inexcusable for the world’s 6th richest country to have streets that resemble those of a third world country.

Various excuses are served up for India’s filth–poverty, overpopulation, illiteracy, corruption, lack of funds, etc. None of these factors, however, explain reality. Thailand is a poorer country than India —yet Bangkok is cleaner than most Indian cities. Tokyo has a higher population density than Delhi yet is one of the cleanest cities in the world. China too is plagued by corruption, yet its cities have significantly higher standards of cleanliness than India’s. And it is not lack of funds either—municipalities in India spend an average of Rs.2100 per ton of waste, compared to Rs. 2050 per ton in the UK.

The solid waste management (MSW) system in India is broken, inefficient, ineffective, and in immediate need of a serious overhaul. What is required is an understanding of the causes, and the will to make changes.

Thankfully, India’s MSW problems are solvable, and the solutions are quite simple. And they can be achieved by spending less than half the money allocated currently in municipal budgets for solid waste management.

Characteristics of successful MSW systems:

I have spent a decade studying MSW systems in over two dozen countries. There is a common thread that runs across successful MSW systems.

1)Successful waste management systems are almost always privately managed. Private companies bring in technical expertise, new technologies, modern operating practices, trained manpower, efficiency and cost controls. The role of the government and the municipal bodies is to enforce anti-littering laws, create public awareness against littering and polluting and levy user/polluter charges. In India, most MSW programs are managed by municipalities. The few towns that have privatized waste management have realized cost savings from 40% to 70%.

2) Efficient MSW systems are based on the principle of ‘polluter pays.’ In other words, those responsible for producing waste should be responsible for paying for its collection and disposal.

In India, waste collection is ‘voluntary’ –households hire someone to pick up their garbage for a fee. This model, however, breaks down because of the free rider problem: invariably a few houses in the neighborhood refuse to get their garbage collected opting instead to throw it where convenient knowing that others will eventually pay to get it picked up.

All users (households, shops, restaurants, hotels, offices, companies, etc.) must, therefore, be required to pay for garbage disposal by adding a waste management fee to their utility There is no free lunch –someone has to pay. If Indians want a clean environment and a better quality of life, they have to be prepared to pay for waste management .

3) Successful MSW systems have very high (almost 100%) collection of waste at source. This is enabled by the use of highly efficient and automated equipment capable of handling large volumes of waste with minimal manual intervention. In India, much of the waste is still collected using manual powered tricycles and carts which are capable of handling small volumes of waste resulting in a lot of uncollected waste.

4) Successful MSW programs convert waste from a liability to an asset by monetizing the resources that come from waste. If there is money to be made from segregation, recycling, and reuse, there will be no shortage of private companies willing to set up material recycling facilities (MRF’s) and deploying cutting-edge technologies to process the waste.

Most of the recycling in India is carried out by an informal network of rag pickers and middlemen. Everyone recognizes the inefficient nature of this practice. Little is ever done to make a change because no one wants the rag pickers to lose out on opportunities to make a livelihood. This argument is ill-conceived and based on the false premise that rag pickers cannot (and should not) be retrained for better employment opportunities. A formalized waste management industry will provide ample job opportunities for retrained rag pickers.

5)Efficient and sustainable MSW programs extract energy from waste. Indian waste has a high organic fraction–almost 50% on average. Currently, about 100,000 tons of organic waste is being dumped in landfills or open lots. Anaerobic digestion technology can be used to convert this organic waste into an excellent source of clean cooking gas for over 12 million low-income families. This how an efficient MSW system can convert a liability into an asset.

6) All developed countries mandate modern scientifically-designed landfills to eliminate contamination of groundwater from garbage related leachate ( runoff water) and to minimize odor, and airborne diseases. So did the Government of India in its MSW Rules 2000. However, in the last 17 years, there have been only five scientific landfills built in the country. Why? Again, it goes back to the issue of incentives. In most developed countries, privately owned landfills charge a tipping fee for taking in waste. This tipping fee pays for the cost of building and running the landfill. It is the profit motive that creates the asset and not government involvement.

In an engineered landfill, the waste is compacted and deposited in cells that are designed to maximize the ‘airspace’–the amount of waste stored in one cubic yard of space. In Japan, the average landfill rate is around 0.75 tons of waste per cubic yard of airspace, whereas in India it is 0.25 tons. In other words, it takes almost three times more space to landfill the same volume of waste in India. Without modern landfill technology, India will need to landfill 840 million tons of waste over the next ten years which will require almost 50,000 acres of land per year. Since it is unlikely that this much land will be readily available for landfilling garbage, guess where it will end up–on the roads, open lots, rivers, ponds, etc.

Privatizing India’s waste management industry:

India remains a dirty country because waste management is the responsibility of state-owned municipal bodies. The only solution is to get the municipalities out of the waste management business and to create incentives for private companies to bring in cutting-edge technologies to collect, transport, segregate, recycle, reuse and dispose of waste. A formalized waste management industry built by private entrepreneurs, backed by private equity, and supported by user fees could clean up the country in five years and also create tens of thousands of good jobs.

All the technologies to segregate, recycle and reuse waste currently exist. The global waste management industry is a $ 230 billion industry employing thousands of people. China has taken a huge leap in this industry and is home to some of the leading manufacturers of waste management equipment. India, with all its engineering prowess, is nowhere on the scene. This stems primarily from dependence on the government to get things done and a lack of incentives for private players to invest in the industry.

How can India develop and incentivize a waste management industry? It starts with user fees for collection. Private garbage collection companies get paid from user fees that the municipality levies on the producers of waste. The collected waste is sold to privately owned material recycling facilities which segregate the waste and generate revenue from selling the recyclables. The remaining waste is then taken to a privately owned landfill which gets a tipping fee based on the quantity of garbage deposited.

Each private player in the system is incentivized to perform. The collection company is motivated to maximize waste collection because its revenue comes from user fees and the sale of waste to the MRF –both measured by volume. The company which runs the MRF makes its money from selling recyclables and so it is persuaded to maximize recyclables and minimize the amount to be disposed of because it has to pay a tipping fee for landfilling. The landfill company makes money from storing waste and is incented to use the best landfill engineering practices to maximize air space.

The invisible hand of the free market and the profit incentive motivates every part of the MSW system to work efficiently resulting in the overall system working effectively.

The solution, therefore, is quite simple. Get the government and local municipal bodies out of the business of waste management and let them focus on public awareness campaigns and enforcement of anti-littering laws. And create a system of incentives to encourage private companies to invest in the development and growth of a modern waste management industry in the country.

Unless the private industry is involved in waste management, Swachh Bharat will only remain a slogan.

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2018-07-27T13:23:20+00:00 May 1st, 2017|

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